by Paul Goldman
What follows is 200-proof politics. Like it or not, this is a stone-cold fact: The governor’s proposal to eliminate the gas tax paid by SWING VOTERS at the pump in exchange for raising the sales tax charged on some sales BUT NOT at the pump is far and away shrewder politically than either Mr. Cuccinelli or General Assembly Democrats are currently willing to admit. A good article by Steve Contorno in the Washington Examiner got the AG on the record supporting a politically flawed plan to be offered on the floor today by allies in the State Senate. With all due respect, it is a big political miscalculation as will be shown shortly.
However, Senate Democrats don’t seem ready, even willing, to try to take advantage of it. They insist on voting to support a transportation plan that is likewise fatally flawed politically and will only hurt Northam or Herring should they support it and get nominated for LG and AG respectively. Dems want to vote for a plan raising more money than the governor, meaning higher taxes on a net basis. This is not going to fly this year.
But first, Mr. Cuccinelli deserves credit for being the first statewide hopeful running for a party nomination to “step up,” or at least “out,” on transportation. Last month, Lt. Governor Bill Bolling, a likely independent candidate for the state’s top job, backed Governor McDonnell’s transportation plan.
So far, Terry McAuliffe has smartly held his powder. No hurry right now. But at some point he may have to weigh in. Senator Northam and Senator Herring step into the fray today with recorded votes in the Senate. The same is true for Senators Martin and Obenshain, seeking to be their respective general election opponents for LG and AG.
Over in the House, those running for these same statewide GOP nominations will also get their chance to vote yeah or nay on a motion to have a bill pass the House.
So there are any number of competing plans, floor amendments and the like. BUT the 200-proof politics is simple: The governor’s plan proposals to give you bragging rights for ELIMINATING THE GAS TAX and all such user fees in exchange for raising the sales tax across the board now paid on certain non-gas purchases.
Yes, as a policy matter, it has serious flaws. BUT AS A 200-proof political matter, it is very shrewd. His other major play, trying to make the distribution formula for Internet/catalog sales revenue more transportation friendly, is not nearly as good politically. But it is not bad for government work as the saying goes, McD is focused like Captain Ahab on catching his transportation legacy.
But back to the nut in the coconut: Eliminating the gas tax is a surefire political winner this election year. Give McD credit, or Delegate Hugo since it may have been his brain child. It is the best political play on transportation since Harry Byrd in the 1920’s.
Yes, I know all the policy reasons against it. But didn’t I make them 9 years ago in explaining why raising the sales tax on poor people was regressive to balance the budget? That didn’t stop Democrats from voting for it now did it? In 1986, LG Wilder made the same points in opposing Baliles sales tax for transportation. Democrats voted for it anyway.
So call me unimpressed by the political pleas today, some of us actually have a record of achieving things for poor people and others, not just rhetoric, of fighting way up the line on stuff. Yes, raising the sales tax concerns me. But unlike 2004, there are big differences.
First, we are eliminating the gas tax, which is regressive also. Secondly, in my equation, the Governor should agree to allow localities to add a local option gas tax if the revenues can be guaranteed to be used for road maintenance, a growing problem.
Democrats need to admit the obvious: Any user fee like a gas tax hits the poor who have cars more. BUT a good number of the poorest citizens use mass transit. This is why I advised Mayor Wilder in Richmond to reject a fare increase on the city buses, having shown the economics. He did the right think and rejected it. At least in the transportation plan, there is more money available for mass transit at the local level.
Secondly, the state needs to begin capturing those Internet/catalog dollars or the very funds needed to provide initiatives for the poor is going to be harder and harder to get through any state legislature. The Governor’s distribution formula should be changed to better reflect needed priorities; it is way too transportation focused. But if we don’t start enforcing the law over the Internet, in the end school dollars will be cut. Education is keep to helping the poor. Plus we need to stop a discrimination hurting local retailers and helping the big Internet companies. Getting Republicans to do this will not be easy: but McDonnell is willing to do the right thing here. Give the boy his due.
Thirdly, the McD approach keeps the gas tax on truckers: which is fair because truckers can pass on the cost to the end retail consumer. Right now, the average person can’t pass on the gas tax, nor take a deduction as one was the case under federal tax law. So keeping this user fee on truckers is consistent with the “user fee” policy Democrats support.
FINALLY: Senate Democrats and Senator John Watkins – who is a terrific guy despite his silly GOP power play bill – can pass whatever high taxes they want. THEY ARE NOT GOING TO BE PASSED BY THE HOUSE. The Governor has set the ceiling on his transportation play in that regard.
Summarizing: We have a Republican governor, a Republican Speaker of the House, a Republican Lt. Governor and now even a Republican Attorney General admitting, in their own way, that we need additional funding to at least fix the growing road maintenance problems. This is an historic opportunity in terms of Virginia political normalcy.
Cuccinelli has tried to finesse it on the low side. But in so doing, he has made a big political mistake in my view. It is fair for Democrats to take advantage of it. But they don’t seem willing for reasons which are not registering with me.
THE SMART POLITICAL MOVE RIGHT NOW: Democrats should get behind McDonnell’s far shrewder political play and back his proposed elimination of the gas tax in exchange for a higher sales tax. IF THIS HAPPENS, then Democrats would be able to get some needed improvements, unless the governor suddenly goes politically dumb on us.
A few weeks ago I laid out this basic construct with some suggested changes. We can make the governor’s approach more education friendly: what will help working families and the poor more? Like it or not, at some point you have to get a bill passed. So there comes a time when you have to take the “least worst option.”
With some important but doable tweaks, I believe the governor and enough House Republicans can back a transportation plan which Senate Democrats and several GOP Senators will find satisfactory if not even engender some enthusiasm. If Mr. Cuccinelli resists at the point, then the election is set: He will lead an anti-tax team, the members having rejected Warner and McDonnell on fixing the budget, now fixing transportation. That isn’t going to fly in 2013 in my judgment.
But you say: “Okay Paul, even if you scenario is correct, what does it hurt if Senate Democrats try to get their own plan if in the end they agree to basically back the Governor’s approach?” A fair question. But logic suggests that isn’t much room for error either procedurally or substantively in the General Assembly right now.
Moreover, the sooner the key parameters are put in place on both sides, the better chance to get some needed tweaks, and more cooperation with the Governor and his allies on other stuff.
Bottom line: Cuccinelli and GA Democrats will eventually see the political attractiveness of the governor’s idea of eliminating the gas tax. Whoever gets there first will be better off politically.
The Democrats should bite that bullet today. It is a hard call but inevitable in my view if you want to get a transportation plan through the House, because eliminating the gas tax is the real political beauty of the governor’s plan.
