by James A. Bacon

I have come to a reluctant conclusion: Virginia’s business leaders are intellectually bankrupt when it comes to solving the most pressing public policy issues facing Virginia. They have nothing to contribute beyond the same tired nostrums that have proven unworkable for a decade or more.

Nowhere is this lassitude of mind more evident than in the realm of transportation policy. This morning I attended a two-hour conference hosted by the Hampton Roads, Richmond and Fairfax County chambers of commerce  which framed Virginia’s transportation crisis as a problem of insufficient funding. I endeavored to report the proceedings of that meeting dispassionately in the previous post, “The Tax of Inaction.” With this post, I put my personal spin on the issues.

Upon one thing I can agree. Virginia does face a transportation funding crisis. I concur with the broad proposition that we must invest in our transportation infrastructure in order to maintain our economic competitiveness and our quality of life. I also accept the McDonnell administration’s analysis that, absent new revenues, Virginia will run out of state revenues to pay for new construction by 2017. Indeed, the situation is so dire that we will soon thereafter run out of state funds to match federal dollars for new construction.

Here’s my problem: Business leaders apparently are willing to increase taxes — exactly which taxes was not clear from the morning’s deliberations — without pre-conditions. Their advocacy of taxes is not contingent, for instance, upon setting up a system for ranking projects on a Return on Investment basis to ensure that funds aren’t squandered upon political projects with a low economic return. Taxes are not contingent upon governance reforms that would align transportation with land use planning. Taxes are not contingent upon exploring alternatives to laying rail and asphalt, such as investing in smart roads — using sensors and algorithms to dynamically optimize traffic lights — or encouraging private-sector competition in shared-ridership services.

Moreover, no principles were discernible this morning for determining how to fund transportation projects. The prevailing ethos is to find tax dollars from whatever source can be sold politically. Whether the money comes from tolls, gas taxes, income taxes, sales taxes or some grab-bag of miscellaneous levies and fees does not appear to matter. Such political pragmatism would obliterate any semblance of a user-pays system in which those who use or benefit from a transportation project are those who pay for it. There seems to be no awareness that when someone else pays, the demand for transportation improvements always will be limitless.

Conference participants lamented the difficulty in “educating” Virginians as to their true best interest in boosting taxes. There was no sense that citizens resist raising taxes because they fear the money will be spent to benefit others, be they special interests or other regions of the state.

Mark Peake, Lynchburg district representative to the Commonwealth Transportation Board, told me that CTB members were discussing this very point the evening before Wednesday’s board meeting in Winchester. Northern Virginians are certain Richmond gets more than its fair share. Hampton Roads is convinced that rural Virginians make out like bandits. Rural Virginians swear that the big urban areas get the lion’s share. They can’t all be right. But nobody knows for sure, so everyone is opposed to raising taxes that think will benefit “the other guy.”

It would seem relatively easy to combat that perception. Just total the state and federal gas receipts, sales tax revenues and other revenue sources generated by each region, add up all the maintenance and construction expenditures for each region, and graph the net contribution over a relevant period of time. Then let’s compare. If the money is distributed reasonably fairly, then the issue dissipates. If some regions are favored over others, then adjustments can be made.

The other issues will be harder. Virginia needs to develop a methodology for calculating a project’s ROI based on congestion mitigated, safety improved, economy stimulated and pollution reduced. Lawmakers also need to devolve responsibility for secondary roads to county governments — and provide adequate funding for localities to do the job. Finally, the General Assembly needs to formulate a tax system based upon the principle of user-pays. Otherwise Virginians will remain convinced that they’re paying taxes to sweeten the pot for developers, big contractors and politicians.

It’s one thing for the politicians to perpetuate business as usual. It takes no imagination or insight to throw more money at a problem. But it’s a sad day when Virginia’s business leaders endorse the stale conventional wisdom of the past 25 years. If they conducted their corporate affairs that way, they wouldn’t stay in business very long. Virginians count on business lobbies to act as a counterweight to the worst instinct of the political class. If this is the best they can do, I fear for the future of the commonwealth.