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Fiscal Policy &Virginia politics Richard Falknor on 06 Jul 2008 10:03 pm

Virginia Republican Legislators – Which Side Are You On?

UPDATE July 10! DC Examiner editorial: “There’s an easy way to fix Virginia’s transportation problems: Designate just 3 percent of the $80 billion biennial budget specifically for highways and mass transit. As Del. Bob Marshall, R-Manassas, points out, that alone would yield $1.14 billion for transportation improvements each and every year — without raising taxes. Marshall has been a lonely voice in the General Assembly when it comes to putting a high priority on transportation — a core state responsibility.” Click here for the entire editorial.

UPDATE July 9!Washington Times editorial here:

“Unfortunately, however, senior Republicans in the House will put forward an alternative pushed by Delegates Phillip Hamilton of Newport News and David Albo of Fairfax that would provide new road funding through a series of increases in taxes and fees. This is a terrible idea – a point being made by more sober-minded Republicans. State party Chairman Jeffrey Frederick, a Prince William County delegate, told editors and reporters at The Washington Times yesterday that the House tax increases were poor public policy and would hurt the Republican Party. Sen. Ken Cuccinelli, Fairfax Republican, warns that GOP lawmakers who support tax increases could run into the same problems Republicans faced in supporting Gov. Mark Warner’s $1.4 billion tax increase in 2004 (only to learn several weeks later that the deficit Mr. Warner warned about was fiction, and that Virginia had a budget surplus.) Mr. Howell would do well to heed the warnings from Mr. Frederick and Mr. Cuccinelli.”

UPDATE July 8! Washington Times today reports here:

“. . . Sen. Kenneth T. Cuccinelli II, a Fairfax Republican running for attorney general next year, said members of his party who vote for the proposal could face criticism similar to 2004, when some Republicans supported a $1.4 billion tax increase by Gov. Mark Warner, a Democrat.

‘I think it could be very significant,’ Mr. Cuccinelli said. ‘I’m very concerned that the Republican tax bill will pass, further enraging our already-dispirited base over what they will perceive as an abandonment of Republican principles – again.'”

*****

A special session of the Virginia General Assembly here is about to resume to consider new taxes here for transportation.

Thus the Forum’s question to elected Virginia Republican state legislators: which side are you on–the side of the taxpayers or the “tax-eaters?” Manhattan Institute scholar Steve Malanga’s description of the choice is, unfortunately, highly apt.

The Washington DC Examiner lists what is apparently the Republican House leadership plan here. Right-Wing Liberal here reports delegate Bob Marshall’s comments on this proposed Republican tax hike. Americans for Tax Reform weighs in here with a blunt anathema on the taxing proposals of both parties.

Rhetorically, most elected Virginia Republican state legislators tend to denounce new taxes. Yet, apart from a few articulate fiscal conservatives, one must look very hard for Republican legislators discussing with any precision right-sizing state and local government, and lifting expensive state and local regulatory burdens. (Mention of the under-performance of increasingly expensive public schools is quite rarely heard in campaign speeches.) And most of our elected Republicans are positively mute when it comes to naming the fiscal adversaries, as the Manhattan Institute’s Malanga discusses below.

In this 2005 Front Page Magazine interview here, analyst Steve Malanga spells out the national dimensions of out-of-control state-and-local-government growth:

“The 2004 presidential election, we are told, hinged on voters who voted their values. But what’s happening in American cities and states is something often far different: the rise of a political party that’s neither right nor left, strictly speaking, but rather a coalition of those who benefit from an ever-expanding government. They’ve been gathering political power for 50 years now, quietly at first, and they have shaped and influenced municipal and state policies in ways that impose steep costs on taxpayers, ways which are not easily unravelled. Blunted in Washington by the national political movement rightward, this New New Left, as I call it, has nonetheless successfully pursued an agenda of higher taxes, more spending and social and regulatory legislation at the local level.”

And Mr. Malanga names the adversaries:

“The coalition I write about is chiefly composed of public employees gathered into powerful unions, social service organizations and activists essentially living off government money, and, increasingly, large portions of our health care system which are government supported. We see this coalition at work in the power of teachers’ unions to blunt education reforms and lobby for ever greater spending on education . . . .”

Author Malanga tells us the lamentable outcome Maryland as well as Virginia taxpayers could expect in his “The Mob That Whacked Jersey” here.

In Virginia, Fairfax County Taxpayers Alliance (FCTA) chief Arthur Purves comes to much the same conclusion as Steve Malanga about the muscle of public employees.

In 2007 testimony to the Fairfax County delegation of the General Assembly, premier number-cruncher Purves patiently explained:

“The General Assembly’s debates on transportation are a turf war in which the Virginia Education Association and its allies in the Senate try to keep transportation out of the General Fund. They do not want funding for state-mandated elementary school guidance counselors to have to compete with widening and repairing interstate highways. The transportation solution is to end the structural imbalance between fast-growing education taxes and stagnant transportation taxes. That means letting transportation compete with ineffective school programs for state income taxes and all of state sales taxes. Higher taxes would only reward mismanagement.”

What are the current budget numbers touching Virginia transportation? Below is an extract from the latest FCTA charts:

“$17.5 billion in new spending … but only $2.6 billion for transportation
— Pay for transportation from existing revenues and not from tax hikes

 

See the whole FCTA presentation here where Mr. Purves also notes

Higher taxes are not the solution; they are the symptom of ineffective government programs, especially education. According to the ACT college admissions test, only 23 percent of Virginia, and U.S., high school graduates are prepared for college.

And what happened to the Virginia Transportation Trust Fund? According to former Transportation Secretary Shirley Ybarra last January here:

“In 1991, Gov. Doug Wilder shifted $200 million from the transportation trust fund to balance the budget. As he was leaving office in late 2002, outgoing Gov. Jim Gilmore proposed using $317 million in transportation trust fund revenue to help balance the budget. Gov. Mark Warner actually took that $317 million and also diverted another $143 million in general funds that were supposed to be used on specific transportation projects in the Virginia Transportation Act of 2000. Now Gov. Kaine proposes diverting $180 million “temporarily” from highway construction programs to increase spending on unrelated programs such as a health care, preschool education, and mental health.”

Mobility expert Ybarra has her own recommendations for the Transportation Trust Fund:

But a tax increase is the last thing the state needs. Virginia must stop pilfering transportation money for non-transportation uses and continue to be a leader in utilizing public private partnerships, taking advantage of the willingness of private sector firms and investment houses to finance major transportation projects. While these partnerships can not be used for all projects, the money Gov. Kaine is taking could very well be the money needed to close a deal on the proposals that are now before the Virginia Department of Transportation (VDOT).

Consider the politics of how transportation money gets spent in Virginia. Best to read Ronald Utt of the Heritage Foundation on the “Dulles Rail Boondoggle” here. (In the Dulles case, we are discussing Federal money; but the missteps to be avoided doubtless apply on the state level.)

Dr. Utt explains one aspect of the Dulles “boondoggle”:

“The capital cost per new rider attracted to transit from a car (daily rider annualized) exceeds $15,000. That is enough to lease each new transit rider two BMW 328i convertibles for life and still return a few thousand dollars to the taxpayer. By this measure, the Dulles extension would be one of the most expensive new transit projects ever conceived.”

and then warns:

As voters in the area already know, a large part the metropolitan area’s congestion problem stems from the mismanagement of the region’s transportation system by a collection of duplicative bureaucracies, which now includes three state Departments of Transportation (DOT), one federal DOT, freelancing members of the U.S. Congress and their staffs, a metropolitan planning organization, a new regional transportation authority recently empowered to raise taxes, a dozen or so counties and cities, and a meddlesome business community that supports wasteful transportation schemes that promise lucrative real estate development opportunities but little congestion relief, of which the Dulles rail extension proposal is a prime example. (Underscoring Forum‘s.)

Clearly Arthur Purves is right that the Commonwealth has an overriding obligation to maintain Virginia’s infrastructure just as it has to maintain public safety- – – an infrastructure obligation that should be supported by General Fund revenues when necessary. And Shirley Ybarra’s emphasis on private-sector financing would seem essential to meeting Virginia’s requirement for needed new highways here without oppressive tax hikes.

But which side is the Republican leadership on? On April 10, 2007, Brendan Miniter wrote in the Wall Street Journal’s “Political Diary” that – – –

“Over the past three years,[Virginia]Republicans have agreed to two major tax increases. On the first occasion, a maverick clutch of Republican senators broke ranks to push through Mr. Warner’s tax. This time around it was Republican leaders who caved. State party chairman Ed Gillespie, Attorney General Robert McDonnell and House Speaker Bill Howell all took the lead in pushing this tax hike through. They argue that this was a necessary compromise to stave off an even larger tax increase. But if the GOP is now the party of the lesser of two tax hikes, it’s a party that has surrendered its key appeal in the minds of voters.”

Readers might want to have a conversation with their legislators here before Wednesday about relieving traffic congestion without more taxes.

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