McMurtrie Mailer Raises Complex Issues About Education vs. Transportation Budget Tradeoffs

McMurtrie Mailer Raises Complex Issues About Education vs. Transportation Budget Tradeoffs


Yesterday, I received a mass email from Paul Goldman, a formerly frequent contributor to this blog who is now working for the Alex McMurtrie for State Senate campaign (note: click here for the candidates in this race to succeed Sen. John Watkins in the 10th State Senate district – Chesterfield County, Richmond City, Powhatan County), entitled “McMurtrie campaign stands-by latest mailer despite protests from opponents.” I was heading off yesterday morning to my nephew’s graduation at Shenandoah University, so I didn’t have much time to look at the mailer, but today I’ve had a chance to ponder a bit, also ask around for the opinions of people I respect.

My conclusion is that the McMurtrie mailer in question (see at the right) does raise interesting, “meaty” questions regarding how Virginia’s budgetary “sausage” is made. For instance, should “general fund” revenues be diverted towards transportation and away from education, health care, etc? Did the 2013 transportation bill fund transportation at the expense of education? You’d think there would be a clearcut answer to all this, and perhaps there is, but I must say I don’t find it easy to wrap my brain around this complex, smoke-and-mirrors budgetary stuff.  With that said, here are a few points which I think are relevant to this discussion.

  • Goldman and the McMurtrie campaign are essentially arguing that Democrats who voted for the 2013 Virginia transportation bill (HB2313 de facto chose to shift money away from education, long-term, as well as to use the general fund in part for transportation. That’s a tough charge, and the Democrats I’ve heard from today are pushing back; for instance, one Democratic delegate told me: “I don’t know what he’s talking about. We put new money in roads and didn’t take money away from schools or any other service.”
  • To elaborate on that counteargument, another Democrat emailed me to argue that the 2013 transportation plan “earmarked more dollars specifically for education than the total value of the sales tax diversion, meaning that even if every dollar of that diversion came from state education spending, schools would still have more funding, not less funding, as a result of the bill.” In other words, this Democrat’s counterargument goes, “the only way the 2013 transportation bill can be said to divert money from education is that it earmarks new revenues for roads that under current policy would have gone into the general fund. But that’s not a reduction, because without the bill, those monies would never have been available, anyway.” I told you this stuff is complicated. 😉
  • PolitiFact in January 2012 rated as TRUE Sen. Donald McEachin’s statement that “Gov. Bob McDonnell’s budget plan takes ‘money out of our classrooms to pave roads.'”
  • Sen. Dick Saslaw in January 2013 said: “‘We cannot take money from the general fund – any money – unless we raise the revenue,’ Saslaw said.”  

    *The Washington Post reported on February 23, 2013: “To win passage, Republicans had to swallow their aversion to raising taxes, and Democrats had to accept diverting as much as $200 million a year in general fund revenue toward roads instead of schools or other services.
  • The McMurtrie mailer strongly implies that “four legendary real Democrats” – Chuck Robb, Doug Wilder, Mark Warner and Tim Kaine – would never have shifted money away from education to transportation. Except that in Tim Kaine’s case, when he was governor he stated that “the only new money for roads, bridges and trains on his watch would come from budget surpluses, if they materialize, and from a transfer of existing general fund taxes that would provide about $40 million a year for Northern Virginia.” I’d also point out that Gov. Kaine signed the estate tax repeal bill into law, costing Virginia’s schools, health care, and other priorities around $130-$140 million a year (it adds up to around $1 billion so far, and counting). Of course, the estate tax repeal didn’t move money from education to transportation, it simply moved money out of education and everything else, transferring it a few hundred of the richest-of-the-rich Virginia families. That was unconscionable and, arguably, as severely harmed education, far worse than any transfer to transportation funding that the McMurtrie campaign argues took place in the 2013 transportation bill.
  • In Goldman’s email Saturday morning, he argued: “The issue of Education vs Road building, the issue of standing up for Education and not caving into the real estate developers, PAC money donors or special interest lobbyists, is a fundamental one for Democrats indeed all Virginians. The issue of whether the Sales tax should be basically dedicated to Education as a policy matter – the historic Democrat view – or whether it should become more and more a vehicle funds to build highways and roads, goes back many years in the Democratic Party.” I’d say there’s some truth there, as state funding for transportation certainly DOES benefit real estate developers and special interests, while education benefits all of us. Which is why, I’d argue, that Democrats should always put education first, and when they DO fund transportation, it should all be paid for through taxes and fees related/dedicated specifically to transportation (e.g., the gasoline tax, the car tax), while education funding increases should be funded in a progressive mannder, such as reinstating the estate tax and/or slashing ridiculous loopholes and corporate welfare/subsidies (e.g., to the coal industry).
  • Of course, good luck getting folks like Dick Saslaw — who has received $717,688 from real estate interests and $241,950 from trasnsportation interests (overwhelmingly automobile dealers and “Private Highway Companies”) — from doing anything that upsets those who benefit from increased state funding for sprawl-oriented development. Also note that Dan Gecker, who Dick Saslaw has endorsed for this nomination, is a real estate developer himself. Hmmm.

The bottom line is that this mailer does raise interesting issues, but I’m not sure the specifics regarding the 2013 transportation bill make the best case. However, I DO believe that for Democrats, education should be a core value (along with things like health care, public safety, environmental protection, etc.), while transportation money should: a) focus on transit-oriented, smart-growth development pattersn; b) be funded by revenues that relate directly to transportation, such as raising the gasoline tax, etc.; and c) never cut into education funding, or even reduce the rate of INCREASE in education funding, to pay for it. Arguably, what the 2013 transportation bill did was not nearly enough of “a” or “b,” and too much potentially of the “reduce the rate of INCREASE in education funding” part of “c.”  

  • NotJohnSMosby

    Paul’s charge would be true if the general fund only had two expenses- roads and education – and if you spent 100% of your tax revenue every budget cycle.  In that case, if income (tax revenue) remained static from one budget to the next, if you increased spending on roads, then you would have to decrease spending on education.  

    That isn’t the case with the general fund.  Increasing spending by $200 million does mean that $200 million that has to come from elsewhere.  That elsewhere, however, is not necessarily education.  You can absolutely keep the education budget the same and increase spending on roads since there are a lot more variables.  General fund monies are very fungible.  Especially when revenues are somewhat variable from year to year.

    If Paul wants to argue that no general fund dollars should go to roads, and raising a tax specifically for roads should have been the only method, then that’s a good argument.  But, kicking in some from the general fund was part of the deal, and in my opinion was the only way to get it done.

    Keeping the per-gallon fixed tax on fuel while adding in a 2-3% sales tax on wholesale energy (gas, heating oil, propane, natural gas, etc) would have been the easiest and fairest way of paying for roads. As is now, taxes on gasoline are actually down, while the general fund takes a small hit and sales taxes on everything hit everyone.

    As far as the general fund, reestablishing the state tax at the same threshold as the Federal tax, and at whatever state rate, should be done.  The car tax relief system sucks almost a billion dollars a year from the general fund, although it is one of the few positive flows where dollars from the whole state flow into NoVA.