Bacon's Rebellion

Democracy Thrives in Sunlight

A Regional Tax Plan for Hampton Roads?

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by

James A. Bacon
in

From this morning’s Virginian-Pilot: “A group of Republican delegates backed a proposal Friday that calls for the creation of a Hampton Roads Transportation Authority, with the power to toll new and existing roads, increase annual licensing fees, and add a half-percent “local lodging fee” for area hotels and motels.”

The tax package would raise about $235 million annually, shy of the $275 million that regional leaders say is needed to fund top-priority road- and bridge-building projects.

Among the more controversial elements might be a proposal to impose a $30 annual fee for passenger cars and pick ups, $40 for panel trucks, $20 for trailers, $15 for motorcycles and $25 per axle for larger trucks.

A one-time local fee on any first-time registration of a vehicle also is being considered. The fee would be equal to three-quarters of a percent of the vehicles’s retail value. An additional 2 percent local fee on car rentals also would be imposed.

Instant reaction

: This plan attacks transportation entirely from the supply side. There was no mention in Tom Holden’s story about any initiative to restrain the demand for new transportation capacity.

If Hampton Roads leaders decide that the region must raise revenues, it do so through congestion-pricing tolls that have the virtue not only of raising revenue but inducing motorists to switch to alternate modes of transportation or drive during off-peak periods. (I won’t even get into the subject of stimulating more compact, mixed-use redevelopment projects such as Virginia Beach’s Town Center or Oyster Point in Newport News that could offset future demand.)

I find the mule-headed inability of legislators to curtail the demand-side of the transportation equation absolutely astounding.

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14 responses to “A Regional Tax Plan for Hampton Roads?”

  1. Larry Gross Avatar
    Larry Gross

    Okay, I’m going to bite.

    What are the demand-side options?

    Wouldn’t we consider TOLLs to be a way to affect demand?

    Let’s say.. something really evil (for sure in Ray’s mind).. happens and the Tidewater leaders decide that they’re not only going to collect tolls to pay for highway/tunnel infrastructure but they’re going to boost them high enough to pay for transit.. TOD… mixed-used, etc… so that they REALLY do put a heavy financial burden on those that insist on continuing to drive by themselves every day.. over long distances….

    Would those officials get voted out of office if they did that? Let’s see.. have elected officials in other states that have implemented congestion pricing.. have they been voted out of office?

    It’ll be interesting because most POLLs show that most people SUPPORT Transit and money spent for transit (regardless of whether it has been deemed cost-effective .. because.. in part roads have never been held to that standard either).

    Further.. here you have the no-tax guys… pretty much on-board with the TOLL concept (as opposed to the tax/spend devils).

    This is sweet.

    🙂

  2. Ray Hyde Avatar
    Ray Hyde

    “(regardless of whether it has been deemed cost-effective .. because.. in part roads have never been held to that standard either).”

    Good point. But if roads were held to that standard, they would win hands down over transit. If you make a bad decision based on a bad criteria, then you have just made three bad decisions.

    And let’s be clear. I don’t have any problem whatsoever with charging drivers what they cost. I do have a problem with charging them what they cost (or more) and then spending the money to support transit riders who pay far less than they cost. If you are going to charge full price, then charge full price.

    But, if people decide to pay the full price and still drive long distances, as opposed topaying even more to ride on transit, then shut up and let the market have its way.

    Same goes for land use. If you want to put impact fees on land use, fine with me, but then be prepared to let people pay the fees and forge ahead. But, even if we had adequate impact fees, people like Schwartz would still be wringing their hands over unsustainability and they would still be deamnding control over what other people choose to do.

    Polls do show that people support transit. Have you ever looked at one of those polls? People also support more and better roads and they have voted with their pocketbook in PW and Spotsylvania. Now that is a real poll.

    I still think it is better to charge people what they cost through fuel taxes rather than tolls: it is more equitable, and the infrastructure is already in place.

  3. Larry Gross Avatar
    Larry Gross

    good discussions.

    I’m not sure I disagree with Ray about using tolls for transit… but for some reason.. I feel that it will be done and despite agnst… the folks who approve such a thing.. will not suffer at the hands of voters….

    I think if you price roads for congestion – that ultimately you’ll end up with more than it takes to maintain the road and you know what happens to “surplus funds”! 🙂

    But think about the other point… “take in more in tolls than you’ll need”. Why is that? Remember.. they’re not going to set the tolls according to maintenance costs but acccording to what it takes to keep the road from becoming too congested. That’s pretty much been proven the case for the Dulles Toll Road. Correct?

    Private investors will like that idea, they’ll get all of their money back plus a good return on their investment. Local officials will like that… extra money for other transportation projects….

    Even the drivers willing to pay the toll will like it.. they get to use a reliable road.. that virtually guarantees them the same transit time every day…

    …. I’m outta here until Sunday evening… so ya’ll have a break.. from my excessive pontificaton… 🙂

  4. James Atticus Bowden Avatar
    James Atticus Bowden

    Alas alack, I live on The Peninsula and don’t read the Pilot.

    You have to name names for ‘Republican’ leaders. If it is Sen Marty Williams and Del Glenn Oder, then this isn’t ‘no tax’ guys but ‘mo tax’ guys pushing for more taxes.

    If there are tolls for the rail and truck crossing to Southside from the Port of Virginia and additions for autos and buses across the current Hampton Roads crossing, then fine. No prob from this real ‘no tax’ guy.

    But a surcharge on vehicles when 28% (if I remember from 02) of the traffic is from out of the region is patently absurd.

    This tax too will die in the House. Rightly so.

    I thought the bottom line for Hampton Roads more concrete, more concrete, more concrete plan was $350m @ year.

    So, let’s see a drill roll of these pro-tax Republicans.

    Also, never NEVER forget that the creation of a Hampton Roads Transportation Authority is an unelected regional government – the voters killed 3 times (if you include Jerry Kilgore’s support) – because it is the biggest political patronage scam and invitation to corruption in the Commonwealth.

  5. Jim Bacon Avatar
    Jim Bacon

    Larry, You asked what are the demand-side transportation options. This is a partial list — the options that I’ve explored in Bacon’s Rebellion — in order of potential significance.

    (1)Land use designs that make possible fewer and shorter automobile trips.
    (2)Telecommuting/telework
    (3)Ride sharing such as car-pooling, vans and buses
    (4)Work hour shifting

    The beauty of congestion pricing is that it encourages people to seek these options.

  6. Ray Hyde Avatar
    Ray Hyde

    No unelected governments, never.

  7. Anonskeptic Avatar
    Anonskeptic

    You will never get the transportation and land use connection and coordination without a regional government. Period. Take the study that showed Loudoun’s land use decisions would cripple roads in adjacent PW and Fairfax.

    There is a provision in Art. VII, Sec. 2 of the Va. Constitution that includes this: Every law providing for the organization of a regional government shall, in addition to any other requirements imposed by the General Assembly, require the approval of the organization of the regional government by a majority vote of the qualified voters voting thereon in each county and city which is to participate in the regional government and of the voters voting thereon in a part of a county or city where only the part is to participate.

    So, come up with a design for a regional government that has leaders that are elected by voters of the region as a whole or by the voters of the locality they represent. Then put that plan to a vote. So you would have an elected regional government.

    But beware, unless the regional government has the power to tell Loudoun, or Virginia Beach, or whoever, “NO, you cannot put that development there,” then all you are doing is creating a regional road-building agency and nothing else.

  8. Anonymous Avatar
    Anonymous

    Regional funding plans are fine, and the projects at the heart of Hampton Roads’ congestion problems lend themselves to tolls (hot lanes on 64, bridges and tunnels). But the real fiscal problem at the heart of this debate is maintenance costs. Any plan — statewide or regional — that fails to provide some funding source that keeps up with the inflation in maintenance costs statewide — statewide — is like giving a painkiller to a cancer patient. The good feeling won’t last long (next election, maybe, but not longer.)

  9. Anonymous Avatar
    Anonymous

    “(1)Land use designs that make possible fewer and shorter automobile trips.
    (2)Telecommuting/telework
    (3)Ride sharing such as car-pooling, vans and buses
    (4)Work hour shifting”

    Jim, you are just looney.

    One of my favorite moments in this debate came about a year ago when the Speaker of the House told the President of Newport News Shipbuilding that he needed to use more telecommuting. Yeah, they can build aircraft carriers by telecommuting….operate those welders and cranes by remote control from your home computer. (And they moved the production shifts to 7 a.m. to help traffic already.)

    How about a cyber vacation at Sandbridge or on the Outer Banks? Tourism traffic is another major contributor to Hampton Road’s challenges. Can VA collect sales tax on cyber vacations — not.

    Then there are the ports. Either the containers come in or out of Virginia or they go to Charleston or Baltimore. We want them and the jobs they bring here. Again, what can be done on this (double stacking, better rail access) is underway.

    All the economic incentives are in place now telecommuting now, and if the market wanted it or could manage it, it would do it (it is doing it alot). I know it galls your luddite little soul to see this, but we love to drive, love our mobility, and would rather build roads than impose the kinds of straight jackets you prescribe. So we need to find a way to pay for it, and those ways can include pricing mechanisms that encourage efficiency. THAT I’m all for.

  10. Jim Bacon Avatar
    Jim Bacon

    Anonymous 8:26, You are the luddite. You are the one who wants to preserve the old way of doing things — building our way out of traffic congestion — while dismissing alternative solutions not with facts and logic but sarcasm.

    I’ve never said that demand-side solutions would solve everything. I’ve consistently said that they are part of the solution.

    I totally agree that Americans love their mobility. And for good reason. But I support the quaint notion that mobility is not an intrinsic right but an economic good. We need a user-pays system for financing mobility rather than a system that that would raise $1 billion a year from whatever source it can be scrounted.

  11. Larry Gross Avatar
    Larry Gross

    re: “unelected government” … I’m having a little trouble here understanding…

    how about Boards of Zoning Appeals for one? HOw about the CTB? There are dozens, no hundreds, of appointed boards in Virginia. Fredericksburg was only recently “allowed” to build a new hospital .. the decision rested in the hands of a tenured government employee.

    The Wash Metro Area Transportation world is already governed by a regional board that consists of elected and appointed officials. They decide which projects are going to be built and how funding for projects is allocated.

    These MPOs exist all across Virginia and the United States.

    How do folks think the 2% gas tax is imposed across an entire region?

    Would you prefer that unelected VDOT officials make road decisions as they do now.. ???

    Would you prefer that VDOT collect money from you – then a group of faceless beaurcrats sit down in their Richmond Conference room to decide how your money will be spent for transportation projects in your jurisdiction?

  12. Larry Gross Avatar
    Larry Gross

    re: demand-side strategies … and luddite solutions.

    If people and businesses actually paid for the full costs of their mobility, we’d not need demand-side strategies in my opinion. The problem we have is that we essentially subsidize wasteful behavior with regard to mobility, in essence, because the penalty for wasteful behavoir is not a financial consequence for the person wasting resources.

    If we sold electricity the way that we “sell” mobility then the electric companies would go broke and we’d have brownouts and blackouts… on a daily basis.

    America, the paragon of Capatilism, runs it’s highway system finances like 3rd world countries run their electric grids.

    In Virginia (and other states), what we do is “sell” .. say for instance… daily commutes… for folks who want to drive by themselves everyday.. 50 miles to work and back for bargain prices.

    100 miles a day currently “costs” someone about $1.75 ( that’s 5 gals of gas at .35 cents per gallon gas tax).

    By doing this – we have INCENTIVIZED poor and inefficient land-use practices because transportation costs are not part of the financial equation that people use when making their housing choices.

    Folks say.. raise the gas tax. I say fine if that is a realistic political possibility.

    If not, then we move on to plan B – TOLLS.

    Here’s a concept for TOLLS. Let’s collect them statewide.. and send them to Richmond/VDOT to re-allocate back out to Virginia jurisdictions but let VDOT run the show the same way they have been.

    How many “YES” votes do we have for this? 🙂 (I’m in an evil mood this morning)….

  13. Toomanytaxes Avatar
    Toomanytaxes

    Larry – If we raised gas taxes, we’d merely pump more money into the existing system in which VDOT has no internal cost controls and where the CTB funds projects based on which developer has the best lobbyist. If you gave VDOT more money, we’d have more projects begetting land development whether in exurban or suburban areas. We’d probably see more congestion, not less.

    The bottom line is the system is broke. Feeding it more money before reforms are made simply makes no sense.

  14. Ray Hyde Avatar
    Ray Hyde

    Tolls are more popular right now than gas taxes for the same reason Metro is popular and development isn’t. Everyone hopes that someone else will have to pay the tolls, endure the development, or ride the Metro.

    Larry’s argument is self defeating. He says on the one hand that we encourage wasteful behavior by subsidizing roads because the gas tax is “too low” but then he claims that people are willing to make roads self sufficient through tolls. In other words, roads can pay for themselves but don’t. Whose fault is that? What would happen to public transit if we applied his idea of capitalism there?

    Larry’s argument that $1.75 a day for driving 100 miles doesn’t begin to pay the costs, not only doesn’t adress the fact that other money is in play, it also doesn’t adress former raids on the transportation funds, or the actual amortized cost per vehicle over the lifetime of a road. We can’t tell from his argument if the payments are too low. (I’ll agree they probably are too low, but you can’t tell from Larry’s argument.)

    This argument ignores that the gas tax is not the only source of money for roads: it is the same logical fallacy as claiming that housing does not pay its own infrastructure costs. We don’t have a system that is designed on being supported only by gas taxes, nor should we: even telecommuters benefit from roads, and they ought to pay also.

    Even if you collect tolls statewide, they are not as efficient at properly distributing the costs as fuel taxes which actually charge for wasteful behavior such as excess HP, heavy vehicles, and poor mileage.

    I’ll agree that the gas tax is politically unpopular, but just wait till you hear the uproar over tolls. One reason people won’t support a higher gas tax is that they have no confidence they will get something for their money: the system is broken. At least with tolls, the agency doesn’t get their money until you have actually traveled the route, therefore they have an incentive to keep traffic moving.

    I reject the idea that spending more money before reforms are made does NO good. I agree it is suboptimal. Like I said, I need a new tractor too, but until that happens I have no choice but to work with what I’ve got. Every day we don’t forge ahead we get higher up on the TTI graph and the more it costs to recover.

    As for the comments of 8:26, he makes the point that alternatives won’t solve all our problems, Jim makes the point that some is better than none. Doesn’t that apply to the current broken system, too?

    My view is that the alternatives will help, maybe as much as 10% eventually, but those alternatives are going to cost money, too, and that is in addition to whatever else we do, not instead of it. Say you can actually come up with a $100,000 investment that saves you 10% of what otherwise would be a $1,000,000 investment, all you did was break even, or worse. You are still going to have to spend $900,000 plus $100,000, and there is no guarantee you can actually make the savings on the larger project: it will probably still cost the same, maybe more if it has to contend with changes caused by the smaller one.

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