Greater Greater Washington

Could McDonnell's transportation plan be any worse?

When Virginia governor Bob McDonnell released his transportation plan, I criticized the scheme to replace the gas tax with a sales tax. This Sunday's Washington Post includes an op-ed I wrote on the topic, which also incorporates many of the points you made in the comments. The Post is pairing it with a piece by Governor McDonnell defending his proposal.

Does Virginia's governor still represent Virginia, or is Robert F. McDonnell looking toward higher office? This month, McDonnell (R) proposed a transportation funding plan that would provide a windfall to drivers in other states who pass through Virginia while dumping more burdens on Virginians, especially residents of Northern Virginia.


Photo by americanbackroom.com on Flickr.

McDonnell's transportation funding plan, if you can call it one, would eliminate the gas tax and make it up, plus a little more, with a sales-tax hike on just about everything except driving. Instead of the common-sense idea that the more people use transportation, the more they should pay for it, McDonnell would do the opposite.

The biggest windfall would go to anyone who drives through the state without stopping. Going from Maryland to the Carolinas and beyond? Enjoy the state's roads and bridges for free. Through-drivers, who add to traffic congestion and the wear and tear of the roads, would directly contribute to state coffers only if they happen to stop for a burger along the way.

Continue reading the op-ed in the Washington Post.

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David Alpert is the founder and editor-in-chief of Greater Greater Washington. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He now lives with his wife and daughter in Dupont Circle. 

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The General Assembly should laugh this idea right out of the room.

Well said.

by movement on Jan 19, 2013 1:17 pm • linkreport

I think he and Gov. Jindal are having a contest to see who can make Grover Norquist the happiest given that they'll both want his support in 2016. Jindal just called for eliminating his state's income tax this week and replacing it with a higher sales tax. Sound familiar?

by aaa on Jan 19, 2013 2:01 pm • linkreport

Another credit card Republican move; trying to get something now and will end up trying to blame the Dems for raising taxes to pay for it later. If Gov Vaginal Probe is going to run saying he's going to bring back Bush II's recession, he's certainly going about it the right way.

by Steve K on Jan 19, 2013 2:02 pm • linkreport

How would people who drive through without stopping pay a gas tax?

by Bob on Jan 19, 2013 2:04 pm • linkreport

"How would people who drive through without stopping pay a gas tax?"
-------

Why should they have to if they don't gas?

by ceefer66 on Jan 19, 2013 2:40 pm • linkreport

@Bob

They wouldn't. They could fill up as much as they like and not contribute a single penny to support the roads they're using.

by Adam L on Jan 19, 2013 2:43 pm • linkreport

How would people who drive through without stopping pay a gas tax?

Yeah, that was a bit weird. Maybe DA meant "people who drive through without stopping for anything but gas."

by oboe on Jan 19, 2013 3:29 pm • linkreport

Let me make sure I get it:

Those who can afford to "pay a premium" to live in transit-centric communities like Arlington and buy their "grapes, ginger or Goldfish crackers" at Whole Foods shouldn't have their sales taxes help pay for roads to benefit those who can't also afford the "livable communities" lifestyle and must therefore live further out and commute on the roads because the folks in Arlington (and this is really rich) "leave space on the roads" for those poor saps who can’t afford to be their neighbors.

Meanwhile, they're free to enjoy subsidized transit - largely at the expense of those left out in the road-dependent areas. Not to mention enjoying the benefits of the higher property values made possible by the availability of subsidized transit.

Thanks for clearing it up.

by ceefer66 on Jan 19, 2013 3:49 pm • linkreport

Ceefer

There are plenty of poor folks in NoVa who rely on transit. You should some out here some time and ride the local buses. Or go to Culmore, and see the bike racks filled to overflowing with old beater bikes used by people who rely on them for transport.

If the objective is to relieve the poor, increasing the sales tax (in Va food is not exempt) is hardly the way to do it.

by AWalkerInTheCity on Jan 19, 2013 4:28 pm • linkreport

@Ceefer

Just to clarify and add. However, your original comment, though sarcastic, was spot on.

Those who choose to pay a large premium and put much less of a strain on the regions infrastructure, while the people who make the choice to live further away from jobs and shopping would be forced to pay more for the increased use of the regions strained infrastructure.

by Kyle-w on Jan 19, 2013 4:56 pm • linkreport

Ceefer,

Regardless of your feelings about effete liberals laughing it up as they ride in luxury of first class metro cars sipping on champagne.

Anyway, this is a dumb plan because its just a scheme to try and make it look like you want to lower taxes while just moving cups around.

If the governor cared to raise money for transportation then he'd do something normal.

by drumz on Jan 19, 2013 5:45 pm • linkreport

@ceefer

Loudoun is the wealthiest county in the cpuntry. The reason Loudounites don't live in Arlington has everything to do woth personal preference and nothing to do with affordability.

If the Governor's road sales tax plan is an attempt to redistribute wealth from supposedly wealthy urbanites to supposedly poor suburbanites, then he should say so and we can evaluate his plan on those terms. However, there are likely more efficient ways of transferring money from the rich to the poor than his plan. For example, I'd much more likely to support a sales tax to pay for free health care for all than a sales tax to pay for free roads for all.

by Falls Church on Jan 19, 2013 7:11 pm • linkreport

There is so much here to hate.

First, a gas tax (regardless of what it is ultimately used for) prices in the costs of car/gasoline infrastructure that drivers get for free -- this includes use of the commons to vent exhaust/pollution, create noise, damage the environment in production and distribution of fuel, etc. Without a gas tax, non-drivers subsidize drivers by giving up a cleaner environment and peace & quiet. Those (mostly on the right) so enamored with "market forces" should be all in favor of a gas tax. If we want to reduce carbon energy use in the U.S. (and we should for a variety of economic, environmental and national security reasons), then a good way to start is for users of fuel to pay its true full cost when they use it.

Second, this is absolutely a regressive tax. This taxation scheme is designed to make poor people buying essentials pay higher taxes than they would otherwise (for the poor nearly all of their income goes to immediate consumption).

Third, in case the "stick-it-to-the-NoVA-lefties" policies weren't obvious enough, McD proposes to eliminate the gas tax while at the same raising registration fees on hybrid and electric vehicles... because with their great gas mileage they don't pay enough in gas tax.

by Chris on Jan 20, 2013 7:26 am • linkreport

As a conservative, I think the gas tax is the best tax we have. It's set up to be essentially a user fee so the expenses are paid by those who use the services (in this case roads). Eliminating the gas tax just means that funding for roads will come through the inequitable sausage factory of politics. I fail to understand how Republican politicians don't see this. Truly frustrating.

by Pat on Jan 20, 2013 11:19 am • linkreport

Watch Alpert pull this down. Downstate legislators from both Parties have made it clear they will not raise the gas tax because their constituents drive much, much more than people in NoVA and have lower incomes. Moreover, their transportation needs are being met today. I noticed you didn't address this issue.

Next, the high tolls on the Dulles Toll Road to pay for Dulles Rail were known since Tim Kaine, as Governor, transferred the DTR to MWAA and agreed to the present funding plan. Where was the hue and cry back then? How come you don't address that issue?

Borrowing. The McDonnell plan for borrowing money to fund road construction is the very same plan that Tim Kaine, as Governor adopted, except the McDonnell plan accelerated the selling of bonds because of the very low interest rates. So why don't you mention that?

Developer contributions. Most of the added road and transit capacity is needed to address development, both urban and suburban. Citizen advocacy in Fairfax County pushed the County to adopt a funding plan that puts 59.5% of all non-rail costs on the Tysons landowners and developers? Why shouldn't similar plans be adopted throughout the rest of the state? While other landowners and developers would get additional density that is less than Tysons, the amount needed to fund transportation needs elsewhere would be less also. Why didn't you address landowners and developers?

by TMT on Jan 20, 2013 3:38 pm • linkreport

Sadly with Cuccinelli v McAuliffe coming up, we're not gonna have a decent governor after the next elections regardless of the outcome. In stead of some moderates run in a state with many moderates, we're gonna have to party ideologues run and destroy all common sense. Very sad.

by Jasper on Jan 20, 2013 6:23 pm • linkreport

@TMT

I usually read your posts with great interest since you seem to be intimately familiar with transporation policy and politics in NOVA. But, honestly, I don't understand what any of your points have to do with the Governor's proposal.

From the tone it sounds like you're supporting the Governor's proposal and disagreeing with Alpert's rebuttal but I really can't tell why. Sounds like you wanted Alpert to address a bunch of other issues like developer contributions and borrowing money for transpo but those seem pretty tangential to the proposal.

Bottom line -- why do you favor the proposal, would it be fair and efficient, and would it be better than the status quo for NOVA?

by Falls Church on Jan 20, 2013 8:16 pm • linkreport

TMT

In the case of most transport improvements the tie in to new development is much weaker than in the case of Tysons. (and I would note that even there there have been some controversies). The Gov has also proposed doing some financing with tolls, but that has proven quite controversial.

Ultimately both the Governor and Mr Alpert seem to believe there is no alternative to taxes for transport infrastructure. Its well known that there objections to increasing the gas tax. as a lame duck the gov could have taken those on. Or he could have left the gas tax as is and looked for other sources, including the sales tax. To eliminate the gas tax, raise the sales tax, and specifically target alt fuel vehicles, really seems like a naked appeal to rural voters - not so much in Va, as to ones who will matter to the Govs political future outside Va.

@jasper -what about McAuliffe indicates he is an ideologue?

by AWalkerInTheCity on Jan 20, 2013 9:56 pm • linkreport

Terry McAuliffe was the first candidate I ever heard talk about high speed rail for Va. So he's got that going for him.

by drumz on Jan 20, 2013 10:32 pm • linkreport

"Could McDonnell's transportation plan be any worse?"

Thank you, Chandler. Joey, your rebuttal?

by Kolohe on Jan 21, 2013 9:58 am • linkreport

The only thing I agree about in the governor's plan is the need to do something to raise road funds from vehicles that don't use much or any gas/Diesel. They still use the roadways, they still cause wear and tear, and their drivers still want good roads. We need to find funding methods that don't allow hybrid vehicles/electric vehicles to become free riders on the road network. If we are going to maintain the concept that roads are primarily paid for by the users, then the gas tax, which I agree with having, must be supplanted by other funding methods that take technological variations in motive power into consideration.

by ksu499 on Jan 21, 2013 11:21 am • linkreport

I don't have a final position on the Governor's proposal. I like parts of it - it will generate more money; it recognizes that the gas tax can no longer generate sufficient funds to meet transportation needs; it recognizes that gas prices have become extremely burdensome to many Virginians, especially in rural Virginia; and new revenues would come from an extremely broad base - the sales tax; and the recognition alternative fuel vehicles are not contributing to the transportation fund.

There are things I don't like, including, the non-application of the tax to fuel purchases; the failure to impose much higher fees/taxes on heavy trucks - the source of most bridge and road damages; and the non-inclusion of requirements for developers to pay their fair share of transportation needs, which, if included, would clearly stop a lot of costly, inefficient projects.

Few in NoVA address the concerns of outstate Virginia. They drive much more than we do, while having lower incomes. Yet we expect their representatives to raise taxes on their constituents so we can have more money. Aren't we bright enough to answer them?

I also find it offensive to hear/read misstatements about the costs for Dulles Rail and the corresponding high tolls. Several years ago, there was a huge battle between the "rail at any cost" people and those who argued Dulles Rail was not cost justified. The former won, but winning did not change the cost-benefit equation. Dulles Rail was not and is not cost-justified. It was always known tolls would need to be sky-high to fund rail. Tim Kaine knew this when he transferred the DTR to MWAA. Many people raised this concern, but they were ignored. So now politicians are running for cover and the idiot media doesn't talk about the decisions made years ago. Don't like the tolls on the DTR, contact our junior Senator.

Virginia builds lots of infrastructure that is likely not justified because of the power of developers and land speculators. Dulles Rail, the Outer Beltway, Route 460. By forcing developers and land speculators to put major skin in the game (say 59.5% of the costs), we would build only what makes economic sense. We would have either built BRT or kept rail in the median of the DTR for Tysons. And the Outer Beltway and Route 460 would be dead. We could have spent the money on other projects that could actually improve safety and reduce congestion.

by TMT on Jan 21, 2013 11:35 am • linkreport

Few in NoVA address the concerns of outstate Virginia. They drive much more than we do, while having lower incomes. Yet we expect their representatives to raise taxes on their constituents so we can have more money. Aren't we bright enough to answer them?

This suggests that NoVa receives more money than it contributes to the rest of the state. That is contrary to everything I've ever read about Virginia funding (thought I don't have numbers to back it up). Isn't NoVa viewed, and used, as the piggy bank for transportation (and other projects) in the rest of Virginia?

by dcd on Jan 21, 2013 1:20 pm • linkreport

TMT: the fatal flaw in your argument, as dcd noted, is that Northern Virginia is the cash cow for the rest of the state. The politics of the General Assembly ensures that this trough stays flowing, and when NoVA has "the audacity" to want to keep some of their own money for improvements in NoVA, they get scoffed at by the rest of the state. As a Virginia resident, I'm surprised you (in your own words) didn't address this issue.

by Froggie on Jan 21, 2013 1:50 pm • linkreport

By rural Virginians drive more are you simply talking about mileage. Because while they might have greater mileage the greater proportion of people stuck in traffic are northern Virginians.

Beyond that, we can spend hours debating what's fair but since most things like this are done at the state level even if the circumstances that created the states for exactly line up with today's reality.

by Drumz on Jan 21, 2013 2:35 pm • linkreport

If what you're really after is a way to make alternative-fuel vehicles pay for their usage, there is a really easy way to do that. Just charge an energy usage tax on all forms of energy--natural gas, gas, diesel, electricity--that is uniform per, say, Btu of energy. Regular gasoline-fueled cars would get charged the tax when the fill them up with new Btus of energy, and electric cars will see their bills when they charge them at home.

by Joshua Cranmer on Jan 21, 2013 3:28 pm • linkreport

I haven't looked at the HF-210 for Virginia in particular, but 35-45% of the money used for road building and maintenance comes from the general fund or bonds anyway.

The gas tax hasn't covered the cost of roads in a long time. But a user fee is a lot more equitable than a transfer of funds.

by Alan Cunningham on Jan 21, 2013 3:43 pm • linkreport

We are not communicating re rural Virginia. I wholeheartedly agree that NoVA gets screwed in its relationship with the Commonwealth. I believe much of that is our own fault as, too often, our legislators give in (e.g., the Fairfax Democrats cutting the ^&%&^ off Chap Petersen and Steve Shannon when they fought Mark Warner for more money for Fairfax County Schools in exchange for voting for his tax increases). However, this does not change the fact the rest of the state has senators and delegates who, more often than our senators and delegates, vote for their constituents' interests. Their constituents drive more than we do and have lower incomes than we do (on average). So why would we expect their representatives to agree to raise the gas tax on their constituents because we have horrible transportation problems? Some of the more moronic NoVA legislators simply are too stupid or ideological to understand this. If you want to get votes from rural Virginia to increase transportation funds for NoVA, don't you first need to understand the objections and then work with their legislators to come up with a plan that addresses the objections?

As I indicated earlier, I'm not 100% behind the Governor's proposal. But it does start to answer the objections of rural Virginia to a gas tax increase. A plan that raises the cost of driving for rural or out state Virginians isn't going to pass the General Assembly. And NoVA can be as indignant as it wants with no positive result. In fact, we look stupid to the rest of the state.

I think some level of sales tax should apply to gasoline; some level of additional charge should be made to alternative fuel vehicles; a major increase in taxes and fees should be placed on heavy trucks; the CTB should be abolished or radically reformed; new development needs to pay the full extent of the transportation costs it imposes on the Commonwealth, both in terms of proffers, special taxes and credit for additional taxes paid by the new construction. I also believe Del. LeMunyon and Sen. Marsden's bills to require VDOT and DRPT to fund projects based on return on investment for congestion reduction and safety improvements should pass. And finally, taxpayers should be protected by an adequate public facilities law with teeth that permits the public to enforce the law and, if successful, receive attorney fees.

by TMT on Jan 21, 2013 4:54 pm • linkreport

At the current price of about $3.50/gal, the price of gasoline is basically at its historic, inflation-adjusted peak. So of course it is very difficult to raise the taxes on it, and I believe it is unrealistic to attempt it, regardless of how much it is needed.

Maybe for that reason the Governor's plan is a reasonable alternative to getting the desperately needed funds for transportation in Virginia.

by goldfish on Jan 21, 2013 6:00 pm • linkreport

if the rural poor of virginia are suffering, it would make sense to CUT the sales tax, and increase the income tax. That would also benifit the poor of NoVa and the (thus far unmentioned) poor of inner city Richmond and Norfolk. And the affluent of Northern Virginia (iincluding Great Falls) would have to contribute)

Of course the poor suburbanites of SE Fairfax,of Stirling, and of South Arlington, like the inner city poor in Richmond
are not Tea Party activists.

by AWalkerInTheCity on Jan 21, 2013 6:58 pm • linkreport

goldfish - those are average annual prices, so the actual peak prices are lost in the smoothing.

by AWalkerInTheCity on Jan 21, 2013 7:00 pm • linkreport

It would be reasonable if it would raise more money that way. But part of the assumption that it will raise more money is by the federal government passing a sales tax mandate on online purchases ( which is rent seeking of the highest order)

So no, this doesn't actually raise any real money and isn't reasonable on the part of the governor. Regardless of how anyone in anywhere Virginia feels.

by Drumz on Jan 21, 2013 7:51 pm • linkreport

In response to several comments…The “regression” argument that a gasoline tax is unfair to the poor, who must spend a higher percentage of their income for it than others, is, unfortunately, a canard. Here’s why: Before electric cars, the research illustrates that the average black or Hispanic family used 11.4 percent less gas/diesel than the average white and that male-headed households used a whopping 30 percent more auto fuel than female headed households. In 2004, the National Surface Transportation and Revenue study pointed out that America subsidized driving at a rate of $144 billion annually while subsidizing transit at $39.6 billion – and bike/ped transportation was so low it didn’t even register. In that study, the authors noted that since 2/3 of transit riders had FAMILY incomes less than $50,000 annually, auto fuel tax hikes would actually help the poor because there would be more money for better transit. Most economists note this effect too; saying that a gas tax hike is very far from “regressive” without noting that under U.S. law today, federal dollars cannot be used for transit operating costs and for every dollar that Uncle Sam provides for transit capital improvements, the local entity must provide a dollar BUT Uncle Sam will provide $3 for every $1 in road building.

It’s bizarre, but one effect of President Obama’s stimulus funding was that bus companies bought new buses with the $8 billion provided to transit (against $28 billion for roads) and then couldn’t use them. The transit union reported that 5,000 transit drivers lost their jobs in 2009-10 when the new buses were being warehoused around the country. Improving transit, as London does with it’s “congestion charge (or tax)” ensures that the poor get better service at less cost. Here? In 2011, according to Metro Magazine – the journal of transit – 56 percent of transit companies raised fares and 71 percent added fuel surcharges.

Today’s electric car subsidies in combination with the transit issues, paradoxically, are Robin Hood in reverse. We’re robbing the poor to subsidize the purchases of the rich! The president’s “cash4clunkers” program destroyed 690,000 working vehicles (which literally had to be destroyed to ensure no scams), raising used car prices an average of $1,500 for the gain of, according to the University of Michigan transportation people, LESS than a SINGLE mile per gallon in fuel efficiency. Every taxpayer ponied up $4,000 so that people could buy new cars quicker. According to Edmunds.com (the auto analyst), 535,000 of those cars would have sold within the next five months anyway.

Today, we’re only paying about a dime more per gallon that our great, great grandparents paid in the 1920s. Today, only Mexico in the Organization of Economic Cooperation and Development has lower average gasoline prices than we do – and of course Mexico is a major exporter of oil. Even Canada, a key exporter of oil to us, has higher gasoline prices due to higher gasoline taxes.

Your concern for the poor is admirable but misplaced. What the world experience shows – and shows very clearly – that especially poor people when gasoline costs what it truly costs simply use their cars intelligently. They call their friends and ask if they would stop by Lowe’s on the way home and get the plumping part. They “trip chain” whenever they travel to ensure they minimize their driving. They carpool. They demand, and get, better transit. And what they find is that they save money. In one project in another car culture community, Perth Australia, decreasing driving saved (or rather continues to save) $25 million annually for consuming other goods besides gasoline and diesel.

Removing the gas tax and increasing the sales tax is horribly regressive, as everyone must eat and everyone must have clothing for whatever season. Everyone does not have to drive for every transportation need and/or desire.

by Randy Salzman on Jan 21, 2013 8:39 pm • linkreport

The political difficulty of raising the gas tax in rural Virginia is, at most, a reason to design a policy that does not raise gas taxes in rural Virginia. It is not a reason to eliminate all taxes on gasoline.

So maybe keep gas tax as is, and a larger optional local gas tax than the 2.1% tax in northern VA today? And allow even the rural counties to enact it? Frankly if people in a given locality prefer traffic calming by pavement surface degradation to higher taxes, let them. Bridges can last a long time if speeds are lowered. Once rural localities stop
expecting the state subsidy they will tax themselves if given the option. Maryland
Localities already pay for their local roads.

And let's not blame Norquist, even he prefers user fees to general taxes.

by JimT on Jan 21, 2013 9:57 pm • linkreport

@Randy Salzman: nice arguments, but I wonder if you have exchanged cause with effect. Increase the prices of gas, and of course the poor will use less of it. That does not, however, improve their lives -- to the contrary.

And you have nicely pointed out how the urban poor can benefit from more public transit. But the disparity is with the rural poor, who will have NO chance to avail themselves of the improvement to transit provided by increasing the gas taxes.

If I lived in a rural area, and my state rep said we need to increase the gas tax so that people in Northern Virginia don't have to sit in so much traffic, I can see why that would be a non-starter, regardless of income. I would pay higher gas prices and not see any benefits.

by goldfish on Jan 22, 2013 12:21 am • linkreport

Goldfish,
Yet the very same is happening in reverse WRT to schools.

We all subsidize each other to a certain extent. There may be ways to raise transportation money w/o raising the gas tax. This plan is not a good example of that.

by Drumz on Jan 22, 2013 8:26 am • linkreport

Yes, yes, yes... But 1), in this case we're not talking about increasing the tax on gasoline but rather on eliminating it; and 2) you (and indeed most) are thinking only of the single trip.

Rural people, poor or otherwise, are the smartest and usually most efficient travelers. They do indeed communicate with each other and find out who "is going to town" today already. They do indeed carpool. They do indeed "re-use" and "re-apply" existing products for new concerns. They THINK about the cost of travel, but usually only in terms of time. But as the price of gasoline has decreased over the years, they are doing that less and less. When, as happened in 2008-9 there is a market induced massive increase in price, they suffer the most because "urban and suburban drivers" quit their weekend trips to the country FIRST. In that year, Americans for only the second time since WWII, actually drove less than previous year, 4.3 percent less, BUT "rural two-lanes," according to DOT, lost over 8 percent of their traffic. This devastated the rural economy and it did so primarily because the rural economies were becoming more and more auto dependent.

IN addition, the rural folks are the most likely to send their children into the military whose primary purpose, if you look back over deployments since the Clinton administration, is to protect (some might argue expand) the oil supply or transportation of oil routes. These rural folks are the people most likely to be "in harm's way" at a cost that we/they rarely understand. For example, today to ensure the Strait of Hormuz stays open, Uncle Sam is keeping three carrier task forces in/near the Persian Gulf at a phenomenal cost of $19.6 million a DAY. No empire in history has ever NOT had a very good moral reason for intervening somewhere, but all have also had a very good economic reason. Why did we get involved in Libya and not in Syria today? If "brutal dictatorships and weapons of mass destruction" were the prime issues in Iraq in 2002, why didn't we invade North Korea?

I'm not comdemning either presidential administration here. Both are trying to sit an amazing fence. We "need" the oil to ensure our "drive first" economy (over 2/3 of which is consumer spending and, of course, most of that at the malls-- how do we get to the malls) but each administration realizes that we can drill, drill, drill and we still will be totally energy independent. Each realizes we must be involved in the Middle East, in Islamic countries, we must be drilling above the Arctic Circle and helping Canada strip it's forest for "dirtiest oil on the planet" in tar sands, we must keep our badly conceived economy alive.

Each administration also realized that greenhouse emissions are a huge long-term problem but each put that problem on the back burner, knowing they might be condemning the planet in doing so. Because why, almost one-third of greenhouse emissions come from American transportation, about 1,958 million metric tons annually, 82 percent from cars (if I remember the EIA numbers from a couple years ago correctly). Since about 80 percent of America's 411 million annual trips are in single occupancy vehicles, this is the root of the problem.

Get people to think about all the "externalities" of their driving and, very quickly, the Titanic begins to turn. How, though to get people to think, when everything else (Gov saying eliminate gas taxes while, by the way, selling bonds for transport "improvements" based on future gasoline tax returns); film after film after film where the "hero" never worries about gasoline price and/or finding a parking space: kids growing up thinking transportation is only one 4 wheels)...

The externalities, or costs of driving dumped on society and not paid for by the driver, are staggering. The lowest evaluation that I've found put the cost at 29 cents a mile and the latest, most comprehensive, by the Victoria Transportation Policy Institute, put the per mile cost at 54 cents.

A very conservative, very pro-defense thinker named Milton Copulus in 2006 calculated the externalities (without including either green house emissions or the cost of the Iraq war) and determined that for each driver to pay the cost he/she were dumping on others in our society due to their driving, we should be paying $10.06 cents additional gasoline tax!

One massive questioin that our media failed to answer during the what, six months, of the Deepwater Horizon oil spill is WHY BP would ever spend $500,000 a day to rent that rig? Yes, a day. And chance that it would be a dry hole (which of course don't they wish!). If we didn't "need" the oil, and a full 69 percent of every barrel of oil becomes auto fuel, the vast majority burned in our 2.9 trillion miles driven annually, they would never have been there in the first place.

Please, please, please don't trust me, sir. Do this research yourself. Every day we neglect to connect some of these dots in our self-involved "drive-first" natures, is another day actually dealing with the issues becomes harder. The gov's approach is totally political and from that concept understandable. But he is clearly illustrating that only "WE, THE PEOPLE" can stop this absurdity by learning, by connecting. No one else will do it for us.

Off my soapbox now. My best friend and boss was crushed in the oil patch of my youth; I had other oil-field friends die when a North Sea rig overturned; my son served in Iraq and Afghanistan. I don't want my grandsons going somewhere else...and I want them to have a livable planet.

Sorry for any typos, etc. Off the top of my head.

by Randy Salzman on Jan 22, 2013 8:46 am • linkreport

As someone who lives in MD, this has been fun to follow for the past couple of weeks, because of course we're also in a funding dilemma, and will make our own headlines soon, with the two primary options on the table being an increase to the general sales tax, or subjecting gas to the sales tax. I personally favor tracking vehicle miles traveled, and the rate you pay per mile is based on the weight of your vehicle, but know that most people don't like the idea of having a GPS attached to their car, and there is room for too much fraud to simply have everyone drive into a "mileage checking station" once a year while the emissions are being tested.

Not building the unpopular mega projects would be a first step to transportation funding in VA, although these projects are mostly bond financed, it would not 'generate' more money for use elsewhere to not build a 460 bypass, but possibly free up borrowing capacity for another project. TMT also tried to bring up a couple times the idea of having developers pay for more roads as the build. This is already prevalent in many MD counties, with each developer having to submit a traffic study as part of the review process, and then having to construct or pay for the 'mitigation' of additional trips. Great funding source for traffic signals, turn lanes, maybe a new through lane along the property frontage, but not so great at corridor wide improvements, and useless in areas that are not redeveloping. Plus, now the State and counties have to pay to maintain all these additional facilities.

In MD, the revenue source conversation could start with cutting other parts of government, to the point where 1% of the existing 6% could be then 'dedicated' to transportation, but that wont happen. There is also discussion about allowing each county to set it's own gas tax rate, in theory the state would then start to build projects within each county as funds began to accumulate, but so many state level projects cross county lines that is not efficient. Plus, similar to VA, suburban MD (specifically Montgomery, but also including Howard, Anne Arundel and Baltimore Counties)subsidize the rest of the state in all levels of governmental funding. Those are also the counties most likely to further locally agree to raise revenue. The more I write, the more I'm thinking there is no easy or equitable way of dealing with this issue...

by Gull on Jan 22, 2013 10:00 am • linkreport

Eliminating the gas tax is a terrible idea, as has been mentioned. Trying to do mental gymnastics to figure out how it works and which technicality or shortcoming of our current situation it alleviates is not really worth the time. The current system isn't perfect, but our ineffective gas tax is something that a lot of conservatives and liberals alike see the value and commonsense in. If you're so concerned with developers dictating our policies or the affect of increased gasoline taxes on poor, rural people, than let the localities decide, right? But, we can't do that, of course. Bending over backwards to try and compromise with people in areas that are already subsidized is not what we should be doing. Localities should have the option to supplement what funding they get from the state if the state is not willing to do a better job working together with localities.

by Vik on Jan 22, 2013 11:10 am • linkreport

As I indicated earlier, I'm not 100% behind the Governor's proposal. But it does start to answer the objections of rural Virginia to a gas tax increase.

I think JimT answers this objection quite well. We don't need to raise the gas tax on rural Virginians to fund NoVA infrastructure. Leave the gas tax where it is and allow NoVA to impose an extra gas tax or sales tax for its region that goes toward infrastructure for its region. The idea of a local sales tax in NoVA to fund local infrastructure has been proposed before but shot down by downstate representatives. I'd rather see a local gas tax supplement than a local sales tax supplement but I'd be willing to go along with either.

TMT, to your other point -- I'd agree with increasing the Tysons special tax district for commercial property to fund decreasing tolls on the DTR. However, no one has proposed this yet, so it's not even on the table.

by Falls Church on Jan 22, 2013 11:21 am • linkreport

Wait a minute, why wouldn't the down-stater's gas tax be wasted on the Charlottesville bypass or some other down-state project? I would assume that the proportion of gas tax collected in NoVA would continue to exceed the proportion state money spent building roads in NoVA.

by Mike on Jan 22, 2013 12:21 pm • linkreport

@Mike: assuming everything stays the same, yes it would. But the example you cite is instructive: a single road built around a small city that does little to improve the transportation in the other 99.9999999999% of the state.

Fundamentally that is problem. One can always point to how this or that project will be enabled by increasing the gas tax; but for nearly all of the rest of the state, nothing. In order for a gas tax increase to be passed, most reps need to see some benefit they can point out to their constituents. Otherwise they are likely to be defeated in the next election.

by goldfish on Jan 22, 2013 12:40 pm • linkreport

@ Falls Church

The problems with a metro-only or NoVA only tax increase include, a fear the State will reduce appropriations for the taxed area(s) and a general distrust that the money will be spent on projects that provide actual and measurable benefits to the public. (Ask Mark Warner about that one.) There is also a significant split in the public between those who would like to see substantially more money spent on transit and those who want to see the funds spent on road capacity. Many on both sides don't trust the process. I'm not playing games, but simply trying to explain what I see as a very complicated situation and why I feel that way. It's simply not a matter of raising taxes. As I like to say, "It's not a Washington Post world. We live in a real world."

We need more transportation money, but we also need some major reforms to ensure the added money is spent in ways that benefit the public through as objective a process as possible.

I also like to see a parking tax, starting in the immediate TOD areas of Tysons that have easy access to Metrorail.

@ Vik

Local areas are already free to, and do, spend their own money on transportation. Fairfax County is engaged in a process to determine how it should finance projects and what projects. One of the big things that came from the process so far is a strong desire among residents who participated in seeing a significant sum of money raised through service or tax districts. If it's good enough for Tysons, why isn't it good enough for the rest of the county?

by TMT on Jan 22, 2013 2:40 pm • linkreport

David Alpert doesn't offer any solution, he just criticizes the governor's very bold plan...the only plan with any hope of becoming reality in Richmond. This is not a perfect solution, but you have to give the governor credit for putting out a specific plan that raises real dollars for transportation.

I reject the "user should pay" argument. That's like saying people without children shouldn't have to pay as much in property taxes because the bulk of that tax goes to fund schools. Everyone benefits from transportation infrastructure, just like everyone benefits from schools, whether or not they own a car.

David also gets his facts wrong--the tax on groceries in Virginia (2.5%) is separate from the general sales tax (5%). The governor's proposal does not raise the tax on groceries; that will remain at its current level of 2.5%.

Also, people from out-of-state WILL help fund Virginia's transportation network; they will do so by paying higher sales taxes every time they buy something in Virginia. While perfect figures are not available, the percentage of in-state purchases by out-of-state residents subject to the sales tax is roughly equal to the percentage of fuel purchases in the state made by out-of-state motorists. The bottom line is that non-residents will contribute about the same amount to Virginia's transit funding as they do now.

The sales tax is no more "regressive" than the gas tax. As a flat, per-gallon tax, the gas tax is about as regressive as taxes come. Wealthy people pay more in sales taxes than they do in gas taxes; lower-income people pay relatively more in gas taxes than they do in sales taxes.

Those who think the solution is just to hike the gas tax, or the income tax, or some other tax are kidding themselves. Pure tax-increase proposals have no chance of passing the General Assembly, and, with the candidates for governor looking like Cuccinelli and McAuliffe, this will likely be the last chance in a long time to address Virginia's transportation funding problem.

David's polemic is an unfair portrayal of what is the first realistic proposal to fix (or, at least, improve) Virginia's transportation funding problems in a very long time. Governor McDonald deserves credit for showing real leadership on this issue.

by Chris on Jan 22, 2013 2:59 pm • linkreport

"Those who think the solution is just to hike the gas tax, or the income tax, or some other tax are kidding themselves"

but that is JUST what this is. An increase in the sales tax.

I think a user tax is a valid principle. I think a general fund paid by progressive income taxes is a valid principle. I see no principle behind a higher sales tax except political expediency. And no, it will not pass.

"The bottom line is that non-residents will contribute about the same amount to Virginia's transit funding as they do now."

Except their incentive will be to spend less on items other than gasoline in Va, but more on gasoline.

" As a flat, per-gallon tax, the gas tax is about as regressive as taxes come."

Why? Without statistical evidence, thats not obvious to me.

"Wealthy people pay more in sales taxes than they do in gas taxes; lower-income people pay relatively more in gas taxes than they do in sales taxes."

Evidence?

by AWalkerInTheCity on Jan 22, 2013 3:06 pm • linkreport

"We live in a real world"

One where AFAICT most of the legislature does not think the plan is serious.

by AWalkerInTheCity on Jan 22, 2013 3:08 pm • linkreport

@TMT

The problems with a metro-only or NoVA only tax increase include, a fear the State will reduce appropriations for the taxed area(s) and a general distrust that the money will be spent on projects that provide actual and measurable benefits to the public.

The solution is to reduce big government and move toward a more local system of transportation funding. Define a few different regions within VA and let those regions independently raise and spend transportation money, except for projects that are intra-regional. That would seem to be a solution that small government conservatives could get behind and NOVA's liberals would like.

Sure, that would make it harder to make transportation connections between NOVA and downstate but no more difficult than making connections between NOVA and DC or NOVA and MD.

We need more transportation money, but we also need some major reforms to ensure the added money is spent in ways that benefit the public through as objective a process as possible.

The way to make the process more objective and efficient is to make all new roads pay for themselves through tolls and all new transit projects pay for themselves through special tax districts and farebox recovery.

by Falls Church on Jan 22, 2013 3:30 pm • linkreport

@AWalkerInTheCity

"but that is JUST what this is. An increase in the sales tax."

No, this is an increase in the sales tax COMBINED with the elimination of the gas tax. That is what this has a chance of actually passing an assembly dominated by Republicans. I don't know whether the governor's proposal will pass but it has a better shot than anything that has been proposed in a long while.

"Except their [out-of-state residents] incentive will be to spend less on items other than gasoline in Va, but more on gasoline."

You really think folks from out of state are sitting there thinking...hmmm...I was going to buy product X while I'm here in Virginia, but since the sales tax has increased by 0.8 percentage points, I'm going to delay that purchase until I'm back in my home state. Not likely, especially given that, even at 5.8%, Virginia's sales tax will STILL be lower than that of every neighboring jurisdiction. I do agree that there will be a significant incentive to buy gas in Virginia, but that's a GOOD thing. When motorists stop to buy gas, they'll buy other things as well.

As far as the regressivity of the gas tax is concerned, a regressive tax is simply one that is applied uniformly, regardless of income, such as gas, sales, and cigarette taxes. I refer you to the Institute on Taxation and Economic Policy's report "Building a Better Gas Tax" from December 2011 (http://www.itepnet.org/bettergastax/bettergastax.pdf), in which the authors of the report note, at page 9, "Gas taxes are inherently regressive — that is, low- and middle-income families pay a much larger share of their income in gasoline taxes than do the wealthy."

by Chris on Jan 22, 2013 4:53 pm • linkreport

@Chris
But your point was that the gas tax is MORE regressive than the sales tax, which that quote doesn't support. Nobody denied that both were regressive.

You said:
Wealthy people pay more in sales taxes than they do in gas taxes; lower-income people pay relatively more in gas taxes than they do in sales taxes.

Along with your comment about the gas tax being "as regressive as they come" you were making the argument that the gas tax was more regressive than the sales tax so sales tax was better.

by MLD on Jan 22, 2013 5:03 pm • linkreport

"but that is JUST what this is. An increase in the sales tax."

No, this is an increase in the sales tax COMBINED with the elimination of the gas tax.

So lets increase the income tax, keep the gas tax the same, and cut the sales tax, so that those who insist SOME tax must be cut, can be happy. That seems like an extraordinarly silly position, but so be it. Eliminating the gas tax for an increase of an equally regressive, and less user focused tax, seems pointless to me.

"That is what this has a chance of actually passing an assembly dominated by Republicans."

I doubt it will pass the Senate. And its not clear to me that all the GOP in the legislature like it, but they may along for party loyalty.

"I don't know whether the governor's proposal will pass but it has a better shot than anything that has been proposed in a long while."

It wont pass, and its bad policy.

"You really think folks from out of state are sitting there thinking...hmmm...I was going to buy product X while I'm here in Virginia, but since the sales tax has increased by 0.8 percentage points, I'm going to delay that purchase until I'm back in my home state. Not likely, especially given that, even at 5.8%, Virginia's sales tax will STILL be lower than that of every neighboring jurisdiction."

yes, there is always someone at the margin. And given how many people commute back and forth, there are lots of people who have that choice to make. Plus there are folks from DC who come to Pentagon City to shop.

"I do agree that there will be a significant incentive to buy gas in Virginia, but that's a GOOD thing. When motorists stop to buy gas, they'll buy other things as well."

Not necessarily.

"As far as the regressivity of the gas tax is concerned, a regressive tax is simply one that is applied uniformly, regardless of income, such as gas, sales, and cigarette taxes."

Not at all. A luxury tax would be effectively progressive. Certain excise taxes are regressive because they are incident on items more heavily consumed by the poor. The extent to which that applies to gasoline, as opposed to all consumables, is at issue.

"I refer you to the Institute on Taxation and Economic Policy's report "Building a Better Gas Tax" from December 2011 (http://www.itepnet.org/bettergastax/bettergastax.pdf), in which the authors of the report note, at page 9, "Gas taxes are inherently regressive — that is, low- and middle-income families pay a much larger share of their income in gasoline taxes than do the wealthy.""

But that does not compare them to sales taxes.

Again, as I said, if the governors concern is that the tax system in Va is too regressive overall, the best approach would be to leave or even increase the gas tax, cut the sales tax, and increase the income tax on higher incomes.

But that is clearly NOT what this is about.

by AWalkerInTheCity on Jan 22, 2013 5:06 pm • linkreport

note, that report suggests tax credits for the poor as an offset - NOT eliminating the gas tax and increasing the sales tax.

by AWalkerInTheCity on Jan 22, 2013 5:20 pm • linkreport

@AWalkerInTheCity and @MLD

You're right that the report I cited doesn't directly compare the gas tax to the sales tax. I was making an inferential step, but one I think is quite reasonable. It stands to reason that the difference in spending on taxable goods and services between lower- and higher-income folks is larger than the difference in miles driven between lower- and higher-income folks. Thus, sales tax will be a bigger bite (relatively speaking) on upper-income people versus lower-income people. I could be wrong about that, but I doubt it. Besides, my point wasn't so much that the sales tax was necessarily more regressive than the gas tax, but rather that both taxes are regressive, and so I don't see the harm in swapping one for the other.

@AWalkerInTheCity

You seem quite confident in your prediction on the outcome of the proposed legislation. You must have a better read on Richmond than I do. One thing I am fairly certain about is that an increase in the income tax--even if accompanied by some decrease in another tax--is very unlikely to pass the GOP-dominated House. And it would be bad policy to boot--Virginia's low 5.75% top marginal rate gives the state a significant competitive advantage relative to other jurisdictions. If you believe folks would rather shop in DC (sales tax rate 6%) than continue to come to Pentagon City to shop because of a 0.8 percentage point increase in the sales tax, than surely you must believe some higher-income folks chose to live in Virginia rather than DC or Maryland thanks to the state's low top marginal income tax rate. Regardless, increasing income taxes is a non-starter for almost all of the Republican caucus.

Again, I don't like everything about this proposal. But this is the first serious attempt to actually do something about Virginia's transportation funding problem that takes the political realities of the state into account, and the governor deserves credit for that.

by Chris on Jan 22, 2013 6:26 pm • linkreport

@Chris Again, I don't like everything about this proposal. But this is the first serious attempt to actually do something about Virginia's transportation funding problem that takes the political realities of the state into account, and the governor deserves credit for that.

Actually, the Governor almost proposed a much more sensible plan to index the gas tax to inflation but he was shot down by his own party.

Over the years, many other serious proposals to raise revenue for transportation have been put forth but all of them have been shot down because they were revenue increases. In fact, just this year, this was proposed by a Republican:

Sen. John Watkins, R-Powhatan, has put forth a proposal that calls for raising the state's gas tax, lowering the income tax and eliminating tax credits and exemptions to raise about $734 million to pay for road construction.

The Governor's proposal will also likely fail partly for the same reason (it's a revenue increase) and partly because it goes against philosophies of both conservatives (who like user fees as an efficient way to fund government) and liberals (who like disincentives for driving vs. other options).

The only thing this proposal has going for it, and why it may be taken seriously for at least a moment is that a) it increases transportation funding, and b) it sticks it to both NoVA and people who use less gas than average (liberals). The proposal has a heavy emphasis on B since there are many other ways of accomplishing A.

In reality, nothing will likely get done about transportation funding in VA until the "political realities" change. That is, until the far-right tea party types get elected out of office. McDonnell is not one of those types but he's beholden to them anyway.

by Falls Church on Jan 22, 2013 7:48 pm • linkreport

A sales tax hike and an income tax hike would both impact Va competitiveness (and the same argument, that Va would still be lower, would apply to both) But an income tax hike could make our tax system more progressive, and make it easier for our neighbors to move in that direction.

I am not convinced that a gas tax is more regressive than a general sales tax. I do know that abolishing the gas tax is perverse from the POV of incentives.

And my sense is that this will not get one Dem vote. Which leaves it up to Lt Gov Bolling in the Senate.

by AWalkerInTheCity on Jan 22, 2013 8:35 pm • linkreport

In reality, nothing will likely get done about transportation funding in VA until the "political realities" change.

...or when the price of gas falls, providing the "breathing room" to increase the tax. I think this will happen in a couple of years, after the supplies from fracking are available. Let's hope anyway.

by goldfish on Jan 22, 2013 9:43 pm • linkreport

"The biggest windfall would go to anyone who drives through the state without stopping."

That's not entirely true. He's planning to toll every road he possibly can, new or existing.

"Through-drivers, who add to traffic congestion and the wear and tear of the roads, would directly contribute to state coffers only if they happen to stop for a burger along the way."
That one is still plausible, the toll money would go into private hands via so called private-public "partnerships" read taxpayer screwing.

by Mike on Jan 23, 2013 12:09 am • linkreport

If it were possible for me to pay into a NoVA tax district for my infrastructure maintenance and not have to pay a dime to the (disproportionately expensive) roads in rural VA I'd jump on it in a minute. Let the people who don't believe in government figure out how to make their roads work all by themselves.

by Mike on Jan 23, 2013 8:06 am • linkreport

@Chris

Your argument that people from out of state would pay as much in sales tax as they would have in gas tax is completely untrue.

Outside of commutters, a great amount of out of state drivers in VA are just passing through. They can drive for 170 miles on 95 (3 hours), or 330 miles on 81 (5.5 hours). The average driver taking those two trips would currently pay $1.49 and $2.89 in gas tax, assuming 20 miles to the gallon. To make that up in sales tax, you would have to spend $25.69 or $49.78 in purchases. Does the average person who is just passing through spend that? I doubt it. Do you spend $9 for every hour of driving you do? I know I certainly dont.

To find someone who will buy less in VA as a result of this policy, you are looking at him. I live in DC, do my shopping in DC, but drive to visit my parents in Tappahannock. Currently do some shopping at the Walmart there (beer and wine mostly) but can easily do that at Costco in DC, which I much prefer anyways. I will know be able to drive on 95 to Tappahannock, go visit the parents, fill up in Fredericksburg, fill up on the way back, and fill a couple of gas cans for good measure, all while contributing $0 to Virginia.

If you are going to make these claims, at least back them up with fact.

by Kyle-W on Jan 23, 2013 12:45 pm • linkreport

@Chris

Regarding the Pentagon City example, it has certainly happened. I have heard it from people in line at the DC Costco, mention how much money they save by not having to pay 2.5% on groceries, that they used to pay at Pentagon City Costco. If VA gets to 5.8% on everything else, then that advantage is gone, and shopping in DC is markedly cheaper than Arlington.

by Kyle-W on Jan 23, 2013 12:50 pm • linkreport

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