An Update on Transportation in Virginia

Why does everyone hate the US Congress?  It is because they never get anything done.  Everyone demands things to go 100% their way.  They argue, they never compromise, and they have their heads buried in the sand on issues like $12 Trillion US debt and the massive costs of entitlements.

I do not operate that way.  I look at the real world.  When I see a problem, I work to solve it.  I work with other people, I never lie to people, and I never require every bill to look 100% the way.

So let’s look at the real world.  Northern Virginia is THE #1 most congested area in the entire United States.  Add to that, due to inflation, fuel efficient vehicles, and alternate energy vehicles, Virginia has no money for any secondary road improvements.  It is so bad, that by 2017, there will not be one penny of state money to build a single state road beyond our federal match.

So how did we get there?  The three major sources of this revenue (gas tax, auto registration fee, and titling tax) are steadily declining.  Of these three, the gas tax is the main revenue source and in greatest decline.

The problem with the gas tax is twofold: (1) It is not indexed to inflation, and (2) As car mileage improves, we raise less and less for the roads.  This is all due to the fact that the gas tax is on a per gallon basis.  Thus, it does not increase with inflation and loses money when cars don’t burn as much fuel.  (e.g. an electric car uses no gas, yet it uses the same amount of road).  Basically, a 17.5 cent tax on a gallon of gas 20 years ago raises the same then as it does now – 17.5 cents.  But 17.5 cents today only buys a fraction of what it did in 1986.  Consider these facts to illustrate the above points:

  • Inflation kills transportation funds.  Transportation construction inflation over the past 25 years has been at least 80%.  In 1986 it cost $25,000 to re-pave one mile of road.  Now, predominantly due to the fact that asphalt is made with oil, it costs $80,000 to re-pave one mile of road.   Or in other words, the 17.5 cents per gallon gas tax set in 1986 is only producing the equivalent of 9 cents of buying power today.
  • Increased fuel efficiency kills transportation funds.   In 1985, the average car got 17.5 miles to the gallon.  In 2007, it got an average of 22.5 miles to the gallon.  So it takes 28% more gallons of gas sold to repave the same road.  And it’s going to get worse! Hybrids now account for 2.5% of all motor vehicles in Virginia.  Ford Motor Company projects that by 2020 (less than 10 years away) hybrid or plug-in hybrid vehicles will account for 10% to 25% of motor vehicle sales.  So the miles to gallon average of 22.5 today in just 10 years could be 47 miles per gallon!
  • Because of inflation and fuel efficiency, the average driver is paying $73.07 less per year in gas taxes to drive the same distance.  When you add the fact that people today don’t need as much gas to go the same distance, and the fact that the gas tax is a per gallon tax and does not increase with inflation, the average Virginia driver who drives 12,000 miles per year is paying $26.67 less in gas tax.  Then, if you account for inflation, the average driver who drives 12,000 miles per year, is paying in $73.07 less in gas tax than he/she did in 1986.

There is no way to solve the problem without bringing in new revenue.  So we have two choices (1) Do Nothing or (2) Do Something.

I never choose “Do Nothing.”  I always choose to solve problems.  So, let’s look at “Do Something” options.

Normally, there are two ways to “Do Something.”  Virginia can transfer money from other areas, or it can raise new revenue.  Of course, the preferable method is to find a way to transfer revenue from one area of government to another.  I read the entire budget and analyzed state spending analysis reports from the Joint Legislative Audit and Review Commission for months.  My conclusion is that transferring the needed money is impossible.  During this Recession, we have cut spending by so much, we are currently spending in our discretionary budget at 2006 levels.  Furthermore, it is interesting to note that 50% of the budget is education, 25% is Medicaid, and 15% is public safety/prisons.   That leaves only 15% of the budget (about $2.5 Billion) for everything else that government does.  If we were to cut education payments to schools, the local governments would be forced to raise real estate taxes.  So cutting education is not an option.  Since Medicaid is a joint state/federal government program, and the federal government does not allow us to cut anything, we cannot cut Medicaid.  I will not support reductions in public safety.  That would require the early release of violent prisoners (Note: contrary to what you may have heard, there are virtually no non-violent prisoners in Virginia prisons.)  Thus, the only way to transfer funds is to transfer them from the remaining 15% which encompasses everything else that government does.  Simply stated, to find the $1 Billion needed to fix transportation out of this small 15% slice of government would require a 40% cut.  That is impossible.

So, there is only one way to solve the problem – we need to raise more revenue.

So the choice is, live with what we have and do nothing.  Or do something, and raise new revenue.

Either are valid policy choices.  And each has their down side.

The “Do Nothing” approach means that people will continue to pay $73 less in gas tax than they did in 1986.  But it also means that there will be no money for transportation maintenance nor transportation improvements.  In fact, right now, there is not one penny in the entire state for any secondary road improvements (all roads that are not highways or begin with a 1 or a 2).  So no stop lights anywhere, no turn lanes, no new lanes, no repaving of even residential streets.

The second approach, “Do Something”, would provide needed funding for transportation.  That will give us the money for repaving, construction, lights etc.  In addition, it will keep Virginia on top of the best place for business and create jobs.  (We dropped from #1 to #3 based solely on our lack of transportation).  On the down side, it will mean that people will be paying more.  But let’s remember, they are presently paying $73 less than they did in 1986.

I am never for doing nothing.  Also, I don’t think that replacing lost revenue is a tax increase.  For example, I have never gone to McDonalds and asked to pay the 1986 price for a Quarter Pounder with Cheese.

So I choose “Do Something”, and that unfortunately means raising new revenue.

The plan I have been developing does two things, (1) It fixes the statewide maintenance short fall so that we will have money to repave roads, add turn lanes and put in stop lights, and (2) It creates a Northern Virginia plan that allows us to solve our problem.

With the state plan, we raise revenue to repair (e.g. replace bridges and repave all types of streets from residential streets like your street, to secondary connector streets like Keene Mill and Silverbrook, to our highways.).  I ensured this bill was as revenue neutral as possible and not a NOVA rip-off.   In the bill, if you drive a gasoline powered motor vehicle and do not buy a new car, you will not pay any additional money.  How do we generate money?  We do it by cutting the gas tax by 1/3, then eliminating the remaining 10 cent per gallon gas tax and replace it with a percentage based gas tax, charge, and raise sales tax by 0.003 cents (goes from 5% to 5.3%), 1% on the purchase of a motor vehicle (sales tax on goods will be 5.3%, but sales tax on motor vehicles will be 4.3%).  Northern Virginia has 30% of the state’s population and this plan returns 30% of the money to Northern Virginia.

With the Northern Virginia plan, we raise new revenue to construct large projects that will visibly reduce congestion.  The money can only be used for constructing new transportation projects that reduce congestion.  I will NOT send money to Richmond in hopes of it coming back.  So my plan raises new revenue here in Northern Virginia (“NOVA”) and keeps it here in NOVA.  This NOVA Regional Plan is iron-clad – 100% of the money raised in NOVA stays in NOVA and if a dime is ever spent on any non-transportation project, or on any project outside NOVA, the new revenue sources are killed.  The funding sources are a .007 cent sales tax increase, a 3% hotel tax and a 25 cent/$100 charge on home sales (On the sale of a $500,000 home, you would pay $1,250). On top of this, we repeal the existing authority of Northern Virginia Counties/Cities to impose a local income tax by referendum!

In closing, I often think about why people like New Jersey Governor Chris Christie so much.  It’s because he does not lie – he tells it like it is.  Some people may give you false information that there is money to build roads.  This is patently false.  As I discussed above, it is impossible to raise $1 Billion from just 15% of the budget.  So the choice is Do Nothing or Do Something.

I ran for office to solve problems.  I choose to Do Something. 

P.S. Here is a well written article that helps explain the need a plan. Bearing Drift.

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