VIRGINIA – “Look beyond the deal specifics and look at the real implications of the announced deal on HB2313, and you’ll see a bill that represents bad fiscal policy and bad transportation policy,” said Stewart Schwartz, Executive Director of the Coalition for Smarter Growth. “It’s a bad deal for Virginia. Without reforming VDOT spending the statewide component of the funding will be wasted, and all Virginians will have to pay for this waste.”
“On the same day that the conference committee announced a deal proposing about $850 million per year in additional transportation funding, we learned that VDOT is wasting yet more of the $3 billion in funds approved by the General Assembly in 2011,” said Chris Miller, President of the Piedmont Environmental Council. “Yesterday, in a presentation to the Commonwealth Transportation Board, VDOT said it would allocate $869 million in borrowed federal funds to Route 460 and the Coalfields Expressway, two of the most wasteful projects to ever be proposed in Virginia. Then there is the $1.25 billion or so they propose to waste on the Charlottesville Bypass and the NoVA Outer Beltway. ”
Ignore the complexity of the sources of funding and step back. There are simple reasons why this is a bad deal:
1) Eliminating the per gallon gas tax and cutting taxes on gas by up to one-third represents bad economics and bad transportation policy, because it reduces the tie between transportation use and funding.Transportation, unlike our schools, is like an electric utility, yet the primary fee—the gas tax—hasn’t been increased in 27 years. Transit users have been paying increased fares, year after year, yet road users would see a reduction in daily travel costs under the bill, leading to a potential shift from transit to driving, more driving and more congestion.
2) By diverting statewide sales taxes, the proposal reduces current and future revenues needed for education, health care, public safety, and other core services. According to the Joint Legislative Audit and Review Committee, Virginia ranks 38th for investment in public K-12 education, 35th for investment in our universities and 46th in state spending on Medicaid. General fund revenues will be needed to invest in our human capital, not in asphalt, in order to maximize Virginia’s competitiveness.
About $500 million per year will be taken from the General Fund (.175 cent increment of existing sales tax + share of .3 cent increase in the sales tax; and not counting the Marketplace Equity Act). The entire .175 cent increment taken from the existing sales tax (or $192 million) would be directed to highway maintenance — meaning we will be buying asphalt instead of hiring more teachers.
3) The proposal includes no measures to ensure wiser spending by VDOT. The agency is squandering most of the $3 billion in borrowed funds authorized by the General Assembly in 2011 and we can expect more of the same if VDOT controls how the new statewide funding is to be spent. The nearly $500 million in funding that would go to the Highway Maintenance and Operating Fund in the proposed bill in actuality frees up an equal amount of highway construction money, and VDOT would likely continue to waste this money. Because the funding goes directly into the HMOF and is not passed through the TTF, it avoids the TTF formula that would require 14.7 percent to go to transit and could potentially provide funding for primary, secondary and urban roads. So transit and local roads get nothing out of the largest share of new funding.
Just yesterday VDOT took $869 million in Garvee bonds to spend on two wasteful projects, Route 460 and the Coalfields Expressway. This is over two-thirds of the $1.2 billion in Garvee bonds authorized in 2011, reducing funds available for much higher priority projects. Four wasteful, unnecessary projects total a potential $5.5 billion in spending: Route 460 ($1.4 billion), Coalfields Expressway ($2.8 billion), Charlottesville Bypass ($243 million, with estimates up to $400 million), and the Outer Beltway (estimated $1 billion). The traffic numbers do not justify these highways and the money is being diverted from much higher priority needs.
4) The proposal offers no statewide funding for local road needs. VDOT has zeroed out funding for local roads over the past few years. Instead, the bill will make Northern Virginia and Hampton Roads increase sales taxes and wholesale gas taxes to pay for local roads. This is a major step toward devolution and passing on the cost of local roads to Northern Virginia and Hampton Roads. Meanwhile, with as much as $500 million in new road construction funding, VDOT will spend that on highway projects and not the local road construction needed across Virginia. Finally, instead of providing adequate state funding for the Midtown/Downtown Tunnels, the bill proposes that Hampton Roads use an additional local sales tax and wholesale gas tax to reduce the costs of tolls. So the bill lets the state off the hook in terms of funding the tunnels, while VDOT is free to divert over a billion dollars to Route 460.
5) Instead of funding transit through taxes on fuel and through the Transportation Trust Fund as a core transportation service in Virginia, the bill pushes all new transit funding into the General Fund (.3 cent addition to the statewide sales tax), forcing it to compete with schools, health care and other public services. Dulles Rail should long ago have been funded through the Transportation Trust Fund. It should not be a bargaining chip to get Northern Virginians to agree to taking General Fund revenues.
6) It makes no sense to allocate most of the (potential and speculative) future revenues from the Marketplace Equity Act to transportation when the state has growing needs in education and other human capital investments in order to maintain our competitiveness.