Son of Frankenstein: HB 3202 Part Deux (Duh)

Here is the Republican con in the special Transportation Session. HB 32o2 is back like the son of Frankenstein, or any other horror film remake unto ridiculousness, as the Republican transportation 'answer'. But like the original HB 3202 it is just a con game for the Commonwealth. It is more about political corruption of politicians and the corruption of the political process for good governance - two separate but connected issues, than transportation.

Much to my dismay, Del. Phil Hamilton, R-Newport News, who knows much about medicine and government policy, is the co-author from The Peninsula.

Here is a Hampton Roads/Tidewater perspective on the bad bill before the House.


HOUSE BILL NO. 6055 Offered June 25, 2008 ----------Patrons-- Hamilton and Albo ----------

The General Assembly declares it to be in the public interest that the economic development needs and economic growth potential of Hampton Roads and Northern Virginia be addressed by special transportation revenues to provide for the costs of providing an adequate, modern, safe, and efficient transportation network in Hampton Roads and Northern Virginia and hereby enacts the following legislation to provide for the same.

First fallacy: existing revenues - raising taxes - are needed.

The newest Regional Government for Hampton Roads isn't the HRTA, but the MPO. Google and check out to see how many of the same people are in the MPO/HRPDC/HRTA. The MPO is an appointed body - not elected.

§ 33.1-391.17. Hampton Roads Transportation Revenue Fund established.

There is hereby created in the state treasury a special nonreverting fund to be known as the Hampton Roads Transportation Revenue Fund, hereafter referred to as “the Fund.” The Fund shall be established on the books of the Comptroller. The Fund shall consist of fees and taxes imposed pursuant to §§ 46.2-755.1, 46.2-1167.1, and 58.1-2402.1 in the Counties of Isle of Wight, James City, and York and the Cities of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg, and any other funds that may be deposited into the Fund. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. Moneys in the Fund shall be used solely for new transportation construction projects in the Counties of Isle of Wight, James City, and York and the Cities of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg, as required by law; and then as determined by the Hampton Roads Metropolitan Planning Organization.

Our MPO has been cited for violating Federal Law in its functioning. It is one of the worst performing MPOs in the Nation.

Some money will come from the Port.

(Editor's note: Follow this link to the full text of Jim Bowden's post. The original post was so long that it visually disrupted the display of previous posts. Readers are invited to comment on the legislation or Jim's commentary by clicking on the "comments" link immediately below.)

Exercise in Futility

Here's a quote that summarizes the futility of the proceedings in the General Assembly yesterday, in which the major accomplishment was the state Senate's passage of a gas tax that Gov. Timothy M. Kaine never asked for and the House of Delegates will never vote for.

From the Washington Post:

"There is no consensus in the General Assembly of Virginia between any group on how to approach transportation," Senate Minority Leader Thomas K. Norment Jr. (R-James City) said on his chamber's floor. "I am not afraid of tax increases, but this is not the time and this is not the place and everyone in this room knows it is not going to happen."

All I'm Asking for Is a Little Consistency

Two of the more notable proposals that General Assembly Republicans have advanced during this year's transportation special session involve constitutional lockboxes and tolling franchises.

The Rs have backed a constitutional lockbox for regional transportation levies to ensure that state politicians can't raid regional piggybanks. At the same time, a number of prominent Rs have floated the idea of selling toll franchises to the private sector as a way of raising up-front capital to pay for other transportation priorities. (See "One Good Idea, One Bad.")

Can anyone see the inconsistency between those two positions? Both represent an unwarranted transfer of wealth from tax/toll payers to a different set of beneficiaries.

The reason a lockbox is needed for regional transportation levies is that politicians can't be trusted not to divert the funds to some other use. Why would such diversions be bad? Because they would constitute a transfer of wealth from those who pay the levies to some other beneficiary who doesn't pay the taxes. The Rs are rightfully distressed that the Ds who control the state Senate shot this idea down.

But... How's the pilfering of regional levies any different from selling a tolling franchise to a private-sector operator who slaps tolls on a road that didn't have them before? Under such an arrangement, the state would pick the pockets of those who pay the tolls and redistribute the funds to benefit someone who wasn't paying the levy. A lot of Rs seem to understand the principle at stake when it comes to swiping Dulles Toll Road revenues to support the Rail-to-Dulles rail project. But their objections seem to disappear when they think that they may be the ones redistributing the funds.

Bottom line: If levies warrant a constitutional lockbox, which they do, so do bridge and highway tolls? Anything else is legalized theft. Let's have a little consistency, please.

They Did What?

Here's the latest salvo from the General Assembly battlefield: Senate Democrats this afternoon killed a measure that would ensure that funds raised by regional levies would be spent exclusively in the regions that paid the taxes.

According to an email missive from the Virginia Senate Republican Caucus, Sen. Creigh Deeds, D-Bath, led Democrats on the Privileges and Elections Committee to defeat the measure proposed by Senator Ken Stolle, R-Virginia Beach. It failed by a single vote, despite unanimous Republican support.

Stolle's measure would have initiated the process of adopting a constitutional amendment that would establish a "lock box" for regional transportation funds. Without a constitutional guarantee, future legislatures could divert the funds for any other purpose. Said Stolle: "Without this constitutional protection, taxpayers have no assurance that the measures we pass will do what we say they will do. This vote today does a great disservice to those who want to find solutions to our transportation challenges."

I have to agree. I'm sure the Dems offered some fig leaf of a reason for blocking the measure, desperately needed to retain trust, and I'll report it when I come across it. Until then, I find this action unfathomable.

Update: OK, here's the story (as I understand it). Deeds blocked the Republican version of the lockbox measure in order to submit a substitute bill. That bill added some clarifying language regarding regional authorities but otherwise preserved the intent of the original. States Peter Jackson, with the Deeds campaign: "I think it's worth noting that the same day Stolle expressed such outrage at Senator Deeds in that missive from the Senate GOP, he voted to advance the McEachin/Norment bill to the floor."

If that's the case, I have to ask, what was the purpose of the email salvo?

Speaking of Deeds, he's offered a couple of interesting bills: one an income tax credit to employers whose employees enter into flextime scheduling agreements that allow them to avoid rush hour commutes, and a tax credit for employers to conduct a telecommuting assessment. Encouraging flextime and telecommuting are good things. But there must be another way to spread those practices. The state tax code is riddled with too many tax credits already.

A Waste of Time

Today's newspaper accounts of the transportation special session are pretty pessimistic. After the first day, some have concluded, the whole exercise is shaping up a waste of time.

Assuming the session collapses in a frazzled heap, it will be followed by the inevitable assignation of blame. Regarding the doling out of responsibility, Sen. Jill Holtzman Vogel, R-Fauquier, made a good point yesterday following Gov. Timothy M. Kaine's address to the legislature.

Unlike the special sessions called by Governor Baliles to address transportation, or by Governor Allen to abolish parole, or by Governor Gilmore to reduce the car tax, Governor Kaine has failed to build consensus or support for his plan before calling legislators back to Richmond.

During the six weeks since Governor Kaine unveiled the tax increase plan he detailed for you moments ago, he has held town meetings across Virginia to gain support for his approach. That strategy has not met with success, and there is no indication that the people of Virginia support his proposal.

Good point. Kaine called the special session. He called it knowing that he didn't even have buy-in either from the Republicans or from key players in his own party. Then he traveled around the state and tried to sell it to the public in the hope, presumably, of pressuring legislators to adopt his plan. But the public, it appears, is as fractured as the readers who leave comments on the Bacon's Rebellion blog. Kaine's gambit failed. Now everyone who has convened in Richmond is simply going through the motions of getting something done.

Not that I blame Kaine for failing to forge a consensus. Given the level of public sentiment right now, a consensus is unforgeable. The Republicans came close with HB 3202 last year, but it turns out that key measures were... oops... unconstitutional.

Ultimately, the problem boils down to this: Everybody wants more roads and rail, but everyone wants someone else to pay for it. Trouble is, if people want someone else to pay for their transportation improvements, they sure as hell won't go along with paying for someone else's! The only way this political gridlock can be solved is to convince people they're getting something tangible for what they pay (either in taxes or tolls). Politically, nothing else will sell.

No Surprise, More Gridlock

Cut through the rhetorical miasma of the General Assembly, and here's what's going on: Del. Ward Armstrong, D-Henry, has introduced Gov. Timothy M. Kaine's transportation package in the House of Delegates. So far, the governor hasn't found anyone to introduce the same plan in the state Senate, where Majority Leader Richard L. Saslaw, R-Fairfax, has his own ideas.

House Speaker William J. Howell, R-Stafford, says the House won't vote on Kaine's bill until it passes the Democratic-controlled Senate. "It is obvious to everyone that, since a Democrat governor called this special session, the body controlled by his party should act first on his legislation," he said. "When the governor's allies in the Senate send us a bill that they have passed and that he will sign, then we will give it full and fair consideration."

Kaine spokesman Gordon Hickey called that a "delaying tactic."

Bacon's bottom line: Nobody can agree on anything. And everybody's trying to set up somebody else to take the fall for failing to come up with a transportation "solution."

The Transportation Debate and the Unreported Land Use Revolution

If you need a reminder of how the debate over transportation funding is totally detached from the real world, read the op-ed piece by Del. Clay Athey, R-Front Royal, in the Times-Dispatch today to re-establish a connection with things happening beyond the cognition of most state politicians and the reporters who cover them. Athey, as you may recall, was the main author of the oft-forgotten land use provisions of the infamous HB 3202 known primarily for Abuser Fees and unconstitutional regional transportation authorities.

The land use provisions of the bill seem to be holding up better than the road-funding pieces, even if their impact has yet to be fully felt. The legislation called for the creation of Urban Development Areas that would steer growth in fast-growth counties into districts where jurisdictions were prepared to concentrate their investments in roads and infrastructure -- and allowed localities to assess impact fees to help pay for it.

Local governments are still in the process of putting the law into effect. Yet this process is largely invisible to the public because the Mainstream Media refuses to cover it.

This massive blind spot in media coverage amounts to journalistic malpractice. Not only is the most important local-governance reform of the past 50 years going unreported, the media is skewing coverage of the transportation funding debate, unwittingly providing cover for Gov. Timothy M. Kaine who has called a special legislative session in the hopes of raising $1.1 billion a year in new taxes. Political reporters are uncritically regurgitating claims that Virginia is running out of state money to build secondary roads and depicting Republicans as anti-tax Neanderthals without providing the critical perspective that, oh, by the way, the financing and administration of transportation at the level of local government just happens to be going through the most dramatic, friggin' changes in the past half century!

In case you've forgotten the coverage that Bacon's Rebellion provided a year ago, here is a refresher from Athey of what is going on:

[Sixty-seven fast-growth] localities now have the authority to set road impact fees on by-right development outside of designated Urban Development Areas. This change helps pay for transportation improvements resulting from new by-right development, encouraging localities to focus growth and address mobility needs as development occurs. ...

[A] second land-use provision in HB 3202 gives large urban counties flexibility to assume responsibility for maintenance of their local roads within an "Urban Transportation Service District." By ending the separation of land-use decision-making from the responsibility for road maintenance, this change is a crucial first step toward devolution of state responsibility for secondary roads that serve only a local function to the governments whose land-use decisions result in congestion.

To encourage localities to provide this service, those counties -- in addition to receiving state payments -- would be authorized to assess full impact fees to help pay for additional public facilities like roads, public safety, and schools.

Got that? An alternative financing mechanism to pay for building secondary roads already exists. One of the reasons that General Assembly Republicans are adverse to new taxes is that HB 3202 significantly has already increased the ability of local governments to raise funds through impact fees. The refusal to pile on new taxes before the impact of last year's legislation is understood does not make the Republicans anti-tax Neanderthals.

Athey and Del. Robert G. Marshal, R-Loudoun, authored legislation that will conduct a two-year study to monitor the transition to Urban Development Areas, determine if additional legislation is needed to help localities as they make that transition, and evaluate all existing land use planning tools and infrastructure financing options. Of course, these facts are unknown to the public because the Mainstream Media has not deemed it worthy of coverage -- if, indeed, these facts have even entered the consciousness of Virginia's editors and reporters.

If Virginia's newsroom executives had any conscience, they would quit their jobs in shame, retire to monasteries, flagellate themselves with whips, and beg a merciful God for forgiveness.

I confess: I, too, was guilty of overlooking this side of this story, at least momentarily. Bacon's Rebellion reported the Urban Development Area (UDA) story extensively a year ago, but we've let it drop since we lost our sponsorship funding. Since then, unable to report the news ourselves, we have have fallen into the habit of relying upon the reporting of others. Thus, I criticized Republicans last week for offering no alternative to Gov. Kaine's tax plan. (See "Beyond 'Just Say No to Taxes.'")

But I now recant. While I do not think that the messy business of land use reform is anywhere near complete, UDAs and their associated impact fees will have a huge impact on land use and transportation. We should wait and what kind of job they do before adding another load of taxes to the mix.

Even the Dems are Divided on Transportation

The Democrats in the General Assembly appear to be divided into two main camps over how to finance transportation improvements -- and that doesn't even include Gov. Timothy M. Kaine, who appears to be in a camp of his own. On one side is Sen. Richard Saslaw, D-Fairfax, who wants to increase the state's 17.5-cent gas tax, and on the other is Del. Ward Armstrong, D-Henry, who says raising gas taxes is a bad idea when the public is already struggling to fill up their tanks.

Saslaw makes an undeniably valid point: A gas tax would capture significant revenue from out-of-state motorists driving through the state. Most of the alternative financing proposals would derive little or no revenue from out-of-staters. The polls may say Virginians don't want an increase in the gas tax, but Saslaw's attitude is, more or less, polls be damned. "I don't run the state on polls," the Washington Post quotes him as saying, "and if [Del.] Brian [Moran, D-Alexandria] and Ward want to run the state on the polls, that is their problem."

As Tim Craig with the Post observes, the rift among Democrats gives Republicans political cover in coming out against any effort to raise taxes this year. House Majority Leader Morgan Griffith, R-Salem, questioned why Kaine called a special session for next month before locking up support from Democrats for his plan.

Bacon's bottom line: If you've got to raise gas taxes to continue financing a Business As Usual transportation system, gas taxes are the economically rational way to go. They are easy to administer and they raise a lot of money. Most important of all (even though this is never a justification that Saslaw is quoted as using), it is transparent. It confronts automobile drivers with the economic reality of their transportation choices. Raising the gas tax may encourage some motorists on the economic margin to drive less, thus reducing the strain on the transportation system. Collecting revenue from out-of-state motorists is a bonus.

Ward, Moran and various Republicans who want to insulate drivers from economic reality aren't doing them any real favors. Energy prices may plateau or even dip slightly after their incredible run-up the past years, but the long-term prognosis is grim. Perpetuating the habits and lifestyles of the cheap-energy era simply is unsustainable in the long run -- we'll bankrupt ourselves by trying to do it. All citizens need to start adjusting to the new energy era now. There is no way to avoid the pain. The only question is how long we can prolong the inevitable reckoning, and how much it hurts when the economic judgment day finally arrives.

Of course, as gasoline prices rise, Virginians will drive more hybrids, electric cars and, as new technologies become available, shift to other fuels. The gasoline tax is living on borrowed time. If Saslaw is serious about relying upon the gasoline tax, and not just posturing, he needs to start laying the groundwork for a Vehicle Miles Driven tax to supplant it one day.

And the GOP Alternative Is.... ?

House Republicans have declared Gov. Timothy M. Kaine's transportation-funding plan to be Dead on Arrival. As Jeff Schapiro and Jim Nolan report the story for the Times-Dispatch:

They said they have only to decide how to kill it -- "whether we send it into a conference or if we just go home," said House Majority Leader H. Morgan Griffith, R-Salem.

"I don't think you're going to see the governor's plan succeed or anything close to it," Griffith said.

Griffith and Del. M. Kirkland Cox of Colonial Heights, the chief House Republican whip, declared the economy in recession, adding that Kaine's proposed new taxes -- on among other things, motor vehicles and real estate sales -- would only slow recovery.

"It's tax, tax and more tax," Griffith said.

I'm glad to hear it. I didn't have anything good to say about the plan either. (See "There Is No Health In Us.") But here's my question for Republicans: If you don't like the plan, what do you propose in its place?

Kaine appeared to adopt key elements of the plan -- a motor vehicle sales tax, a vehicle registration fee and a grantor's tax -- because House Republicans embraced them last year when they crafted HB 3202, although not in precisely the same configuration. In his naivite, the governor no doubt assumed that if GOP legislators liked those levies last year, they would be OK with them this year. So, how did those charges become so unpalatable all of a sudden? It's hard to avoid the suspicion that they are just opposed to anything that Kaine might propose.

Here's what we need from Virginia Republicans: a set of clearly enunciated principles to guide transportation funding. Such principles need to do a number of things. They must:

(1) Create a mechanism for actually raising money. We can't build a transportation system for the 21st century with fiscal tricks and legerdemain.

(2) Be sustainable over time, and they need to be structured so that legislators can't lay their hands on the tax money for other purposes.

(3) Display a direct and transparent nexus between who pays and who benefits from transportation projects.

(4) Address the "demand" side of the transportation equation, in other words, incentivize people to seek alternative means of mobility and access.

(5) Incentivize citizens and developers to adopt more transportation-efficient human settlement patterns.

I've shown how it is possible to raise billions of dollars to pay for new transportation projects while adhering to these principles. (See "User Pays.") From what I can tell, those musings have evoked zero interest among Republicans, who, judging by their rhetoric, should be inclined to spending restraints and free market principles. But, unless Republicans can devise a message more positive than "Just say no to taxes," they are signing their electoral death warrant. Virginians may not trust the politicians to spend their tax money fairly and wisely, but they are looking for solutions.

Is Bill Howell the Last Lawmaker Left Who Cares About Sprawl?

While political maneuvers swirling around transportation taxes garner the newspaper headlines, some members of the General Assembly are quietly working to address critical issues that shape the transportation debate: the financing of roads, schools and other public improvements through proffers and impact fees.

In a letter addressed to key industry and conservation groups, House Speaker William J. Howell, R-Stafford, has outlined some of the key issues. Writes Howell:

It is fair to say that members of [the House of Delegates] understand and are sympathetic with industry concerns about housing affordability and the affects of the current cash proffer system. Members also recognize, however, that local governments may have few alternatives to replace the cash proffer payments they are now receiving, and that any change in the existing proffer system must therefore provide an effective avenue to meet infrastructure requirements. Further, the ongoing strain on existing infrastructure and land conservation efforts caused by increased sprawl bring additional challenges to the table which, in my opinion, must be a part of any solution.

Howell notes that the House Rules Committee voted to widen the scope of a two-year study on proffer reform to encompass the larger set of issues. He continues:

To be truly successful, I believe the outcome of the discussions should recognize what the General Assembly was trying to accomplish when it passed the forward-looking land-use portions of the Comprehensive Transportation Funding and Reform Act of 2007 (House Bill 3202), which I patroned last year. Specifically, we charted a new way forward toward more efficient and compact growth management, which preserves open space outside of designated urban development areas. Virginia state law and public policy now embraces the fact that neither the state nor local governments can afford to continue development practices of the past that sometimes resulted in unbridled sprawl.

Howell is clearly on the right track, although he hasn't quiiiiite stretched his thinking as far as it needs to go. Not only should proffers and impact fees be considered in the large context of land use and governance structure, so should transportation funding. But he appears to be light-miles ahead of Virginia's other political heavy weights.

Sadly, Gov. Kaine, who once campaigned on making the transportation-land use connection, appears to have abandoned the cause. Sen. Majority Leader Richard Saslaw, D-Fairfax, has no discernible interest in the issue. Howell may be Virginia's only hope.

$120-Per-Barrel Oil and the Abject Failure of Virginia's Political Class

Only seven months ago, I posted on the topic, "Quality of Life, Human Settlement Patterns and $100 Oil." Oil was then selling for $83 a barrel, but analysts feared that the price could hit $100. That was then. This is now, and oil is flirting with $120 per barrel. That price, which includes a lot of speculative froth, will settle back down. But it will settle at a new, higher plateau that is far higher than even I dreamed of some two ago when I was blogging about the impact of $50-per-barrel oil.

Higher oil prices affects transportation policy in two ways. Most directly, it boosts the cost of gasoline, which now runs above $3.50 a gallon in Virginia. When retail gasoline prices increase $1.00 a gallon, the giant sucking sound you hear is the whoosh of some $5 billion annually being vacuumed from the pockets of Virginia consumers. But there's an indirect impact, too: Higher oil prices translate into higher asphalt prices, a critical material for road maintenance, which, along with China-driven inflation in the broader construction sector, explains why maintenance costs are gobbling up an ever-larger share of Virginia's Transportation Trust Fund.

One would think that a tripling of oil prices over the past few years would prompt Virginia's decision makers to re-think transportation policy in a fundamental way. But the only re-thinking that has taken place is a growing conviction that we must raise taxes, pay whatever it takes, so we can continue to do things exactly the same way we have for the past 50 years.

Gov. Timothy M. Kaine, whom I once thought knew better, now declares that he will call the General Assembly back into session this year to deal with transportation. He doesn't expect anyone to reach a solution, he told the Associated Press. Rather, "We're either going to solve this problem or Virginians are going to know who stood in the way of a solution."

And what solution would that be? Reports the AP:

The governor wants a statewide levy to cover the overruns that the Virginia Department of Transportation estimates will approach $400 million next year and $600 million by 2014.

Among the ideas offered to cover the gap are boosts in the sales tax, the state's 17 1/2-cents-per-gallon gasoline tax or the "titling tax" on car sales. Kaine prefers raising the titling tax from 3.5 percent to the rate applied to all other retail purchases, 5.5 percent, but won't say what he will propose in the bill he sends to lawmakers within the next two weeks.

The final calculation, I can assure you, will be driven by politics, not economic reason. Any rational system for funding roads and highways in Virginia would be based on a user pays principle that would (a) make people feel the consequences of their transportation choices, (b) induce some people, on the economic margin, to shift to more energy-efficient transportation modes, and (c) encourage the marketplace to provide more transportation-efficient settlement patterns such as walkable, mixed-use neighborhoods in closer proximity to jobs.

If Gov. Kaine is entertaining the option of a statewide sales tax -- which would load the burden of road funding indiscriminately not only upon those who moved 50 miles from their job so they could afford to buy a bigger house with a bigger yard, damn the consequences, but those who walk, bike or bus to work, ride the train to work, telecommute to work, or don't work at all -- he clearly does not embrace the principle of "user pays." He's also given up on land use reform, much to the dismay of the environmentalists who voted for him. The only change he still embraces is more funding for mass transit, even though the economics of that option are abysmal in the absence of land use reform -- and his plan for funding the Rail-to-Dulles heavy rail project is teetering on the brink of collapse.

Kaine talks about decreasing CO2 emissions in Virginia's part to combat Global Warming, but instead of encouraging Virginians to drive less, he's strategizing about putting Republicans on the spot for their unwillingness to subsidize more driving. If GOP lawmakers had any brains, they would be hurling Kaine's Global Warming rhetoric back at him, but they are too dull-witted to do so. While the GOP does deserve credit for cooking up unappreciated but meaningful land-use reform in the infamous HB 3202 passed last year, legislators remain clueless on how to handle the funding piece of the equation. One might think that Republicans, who putatively believe in free market principles, might embrace "user pays" as a way of breaking the legislative logjam -- more mobility for those who are willing to pay for it. But, for the most part, they can't evolve past their "no tax increase" rhetoric which, in its own way, is as devoid of principle as Kaine's grab-money-wherever-you-can-find-it approach.

Virginians have been grappling with the transportation funding issue for several years now and appear as deadlocked as ever. The failure of leadership across the board is utterly dispiriting. The truckling to narrow business interests (the real estate and construction lobby) and demographic constituencies (middle class households living in scattered, disconnected, low density settlement patterns) is shameful. Among Virginia's elected officials, no one is willing to tell voters the truth, the whole truth and nothing but the truth. But, then, voters are no better. We all want more roads -- just as long as someone else pays for them. In the final analysis, we collectively get what we deserve.

Kaine's Environmental Credentials Wearing Very Thin, Very Fast

In a recent column, "The Kaine Mutiny," Peter Galuszka argued that Gov. Timothy M. Kaine is losing friends in the environmental movement. And that was before the latest news regarding amendments Kaine tried to tack on to important energy legislation. As The Winchester Star tells the story, the governor comes across as a wholly owned subsidiary of Dominion Virginia Power:

The state Senate has quashed Gov. Timothy M. Kaine’s legislative amendments that would have virtually assured the approval of a proposed 500-kilovolt power line through Frederick County and into Loudoun County.

The 39-0 vote in Richmond on Wednesday stymies an effort essentially to force Virginia’s State Corporation Commission to approve the power line, a joint project from Allegheny Energy’s Trans-Allegheny Interstate Line Co. and Dominion Virginia Power. [Kaine later requested to pull the amendments when it became clear they would not pass.]

The proposed amendments would have changed a bill submitted by Sen. Thomas K. Norment Jr., R-Williamsburg. Among the proposed changes was the removal of a line noting that Virginia would have a state goal of reducing retail customers’ consumption of electrical energy through the implementation of cost-efficiency programs by an amount equal to 10 percent of the amount of electricity used by retail customers in 2006.

Update: There's more to this story, and it puts Gov. Kaine in a better light as a defender of the environment. This comes from the Virginia League of Conservation Voters:

While the Governor's effort to incorporate goals for reducing the growth rate of energy demand by 40% consistent with the State Energy Plan may have been his primary objective, other language in the amendment to SB 596 could have interfered with the Northern Virginia Transmission Line case currently pending before the State Corporation Commission (SCC). The SCC would have been limited to reviewing only conservation or energy efficiency evidence provided by the utility company, regardless of the other efficiency programs implemented in the Commonwealth. This change could have prejudiced pending and future applications in favor of the utilities. After sharing our concerns with legislators and the Administration, the Governor removed support for the amendment and it was defeated in the Senate.

No Special Session Any Time Soon

Gov. Timothy M. Kaine has said that the General Assembly could hold a special session to deal with transportation issues as early as May or June this year. But Chelyen Davis with the Fredericksburg Free Lance-Star notes that lawmakers are so far from a consensus about what to do that "it may be months" before such a session could be organized.

The major fault line is between legislators who favor a "statewide" tax increase to finance transportation improvements and those who prefer regional solutions. Republicans, including House Speaker William J. Howell, R-Stafford, tend to fall into the regional-solution camp. Said Howell: "There's not a crisis statewide that has to be fixed before you can fix what needs to be done for Northern Virginia and Hampton Roads."

Considering that the Republicans still run the House of Delegates, Howell and his compatriots exercise effective veto power over any proposed solution.

The Democrats, including Kaine, want a statewide solution that brings in a sustainable, long-term revenue flow. Trouble is, they can't agree on which tax they prefer. Senate Majority Leader Richard Saslaw, D-Springfield, has touted the gas tax, while others have argued for a sales tax. Kaine has not yet expressed a preference.

As far as I can tell, all proposals are based on political expediency -- how to extract the most revenue from taxpayers with a minimum of fuss. Very few lawmakers, to my knowledge, have openly endorsed the most economically efficient and environmentally benign scheme of all: "user pays."

Annexation Count-Down: Two Years and Counting. What Comes Next?

Gov. Timothy M. Kaine is one of the few people, it appears, who is looking ahead to the year 2010 when a state moratorium on annexation expires. Unless the issues that inspired the moratorium years ago are addressed, Virginia could face a wave of bitter conflict between cities and counties. According to Ray Reed with the Media General News Service, Kaine wants to start a discussion with state legislators and city leaders.

A quick primer: When the drafters of the state constitution envisioned a system of independent cities and counties, they gave the municipalities different powers and authorities. The thought was that cities, as urban centers, would require greater fiscal resources to provide urban services to their citizens. Counties, by contrast, were overwhelmingly agricultural, and their citizens did not expect, or want to pay for, the same level of services. However, as growth spilled out of cities into neighboring counties, annexation gave cities a tool to incorporate surrounding urban settlement patterns and provide the citizens the services they desired.

The system worked as planned for decades. Then two things happened. First came the Civil Rights and the rise of the black vote. White-dominated city governments used annexation (or, it was feared they would use it) to annex white-dominated precincts of neighboring counties in order to preserve their white majorities. Clearly, this was a use of annexation not intended by the framers of the state Constitution.

Then came the rise of auto-centric development that hop, skipped and jumped beyond city boundaries. Cities had a nasty habit of annexing those districts with heavier concentrations of tax-paying businesses, leaving the citizens (with their craving for urban services) to the counties. Needless to say, the counties felt victimized by this cherry picking.

Those two trends led to the annexation moratorium. But that created a new set of problems as poverty became concentrated in cities, saddling them with high costs of crime fighting and social services, and new economic growth occurred in the counties. Despite the perceived inequities, counties and cities have lived relatively tranquilly ever since. Well, at least they haven't been suing each other.

But that could all change. Kaine is not the only one looking down the road. Steve Newman, R-Lynchburg, says he's concerned that cities may soon start filing annexation lawsuits.

Also, according to Chris Graham in the New Dominion, Del. Matt Lohr, R-Rockinham, authored a bill this session that would extend the original 15-year moratorium another 10 years to 2020. But Kaine vetoed the bill. Lohr worries that cities and counties may stop collaborating on mutually beneficial projects like water and sewer. Said Lohr: "Waiting until the last minute, as the governor suggests, only brings more harm to the problem. I learned on the farm many years ago that you don’t wait until the last minute to fix a fence."

Kaine says that annexation is never coming back. Now is the time to think long-term about city-county relations, and that includes the ticklish issue of how to allocate state aid to localities and the idea of revenue sharing between localities. As Ray Reed quotes him, Kaine said:

"If I'm in Wise County and I know that I'm going to get some percentage of the state's income tax collections, I'm pleading for the Fairfax County Economic Development Authority to be successful," Kaine said.

"And similarly, if I'm in Norfolk I want Wise County to be successful.

"So, we have to build some mechanisms in place that give everybody a motive to help everybody else be successful," Kaine said.

These issues won't be easy to solve. But it's nice to know that people are actually thinking ahead for a change.

Insults and Budgeting

While Jim flees to the friendlier confines of the Free Republic of Wyoming (rated a B- in the Pew survey), here in A- land, the grandees are immersed in the spitball portion of the budget competition, trading barbs and preaching doom over differences that are generally much smaller than they appear.

But out of this gob-soaked mess arises a proposal from the head Saslaw-crat regarding a way out of the transportation road funding mess:

Saslaw floated the idea of a statewide transportation plan that would allow increases in the gasoline tax, the sales tax on automobiles, and an increase in the tax on real estate sales to raise money to replenish the state's highway maintenance fund, which is $400 million short of meeting the state's maintenance needs.

Notice that none of this proposed new money is aimed at easing congestion, setting priorities, reforming VDOT or any of the dozen other items that need to be addressed. Instead, it's all about the Benjamins...as many of them as he can shovel into the existing system, no questions asked.

Not that the GOP has many bright ideas either. Pressing tax authority for new roads down onto unwilling localities is just another way of passing (someone else's) buck.

Considering these inputs, it makes me wonder what sort of weird curve Pew used to issue its grades.

Taking a Week Off from the Rebellion

Adios, amigos, it's spring vacation here in Richmond and that means travel. First to Wilksboro, N.C., to visit my wife's grandmother and celebrate her 100th anniversary, and then to Jackson, Wy, to see my daughter and take in a little skiing. Truth be told, my wife and son will be doing the skiing. I don't ski. At my age, I figure I'm too old to learn without inevitably taking a tumble and shredding the ligaments in my knees. I might try padding around in show shoes for a while, but that's the extent of my adventurousness. Some rebel, huh?

The General Assembly still has unresolved issues that I won't be able to comment upon, but I'm not terribly worried. For all the posturing of both sides, the budgetary issues that differentiate the Donkey Clan and Elephant clan seem pretty small. The real action will come later this year -- whenever Gov. Timothy M. Kaine decides to call a special section of the General Assembly to address the melt-down of last year's transportation funding package.

Sadly, I see little evidence that anyone has learned much of anything from this debacle. But devising a rational, user/beneficiary pays system for transportation funding is absolutely critical. The funding piece is only a partial solution to Virginia's transportation challenges -- there is no escaping the transportation-land use nexus -- but it is vital nontheless. We need to inject more money into the system, but we have to find a way to do it that doesn't perpetuate the dysfunctional human settlement patterns that are such a big part of the problem.

If structured properly, a user/beneficiary-pays system can provide financial inducements not only for people to modify their one-driver-one-car lifestyles but for developers and local government practitioners to embrace more transportation-efficient land use policies. I expect to devote close attention to this issue when I return.

Until then, I will check in sporadically as I can. Otherwise, I will leave the blog in the competent (and, hopefully, inflammatory) hands of Ed, Peter and our other contributors.

Saslaw: The New Chichester?

House Majority Leader Richard Saslaw, D-Springfield, could do for the Democrats what former Sen. John Chichester did for the Republicans: Keep them divided and fighting amongst themselves.

In a Sunday column, Jeff Schapiro described a breakfast hosted last week by Gov. Timothy M. Kaine for a dozen prominent Democratic legislators. "Over scrambled eggs, bacon and sausage," he wrote, "Kaine's primary concern was dissent among Democrats." Participants at the breakfast traced the divisiveness to Saslaw, who was present. Del. Lionell Spruill, D-Chesapeake, was angry at the Senate potentate for blocking a crackdown on payday lenders, who, as it happens, had contributed thousands of dollars to one of his campaign funds. Accusing Saslaw of behaving like a king, Spruill got so agitated that the governor had to call time out.

Del. Jim Shuler, D-Blacksburg, also was upset about a deal brewing between Senate Dems and House Republicans that would install Catherine Hammond, appointed by Gov. Jim Gilmore to a Henrico County judgeship, to the State Corporation Commission. The move would ensure an all-GOP SCC.

Saslaw has his work cut out for him if he's going to schism the Democrats like Chichester did the Republicans. But he shows potential. Humility does not appear to be one of his virtues. He has shown little inclination so far to kowtow to Tim "Mr. Nice Guy" Kaine merely because he's governor. After all, Kaine will be gone in two years while, assuming the Dems hang on to their Senate majority, the 67-year-old Saslaw could well run the show for a decade or more.

Personalities aside, Virginia's Democratic Party displays fissures that it managed to paper over while it was in the minority. But now that the party is back in power, it's clear to see that the Dems include both members of the business class -- Saslaw is an Amoco and Mobil gasoline station dealer -- as well as populist rabble rousers. While the Dems tend to unite over culture war issues, they represent a broad range of business and demographic constituencies that don't always see eye to eye when it comes to government regulation.

Republican Lawmakers on Education: Mo' Money!

Del. Christopher Peace, R-Mechanicsville, is a bright, young up-and-comer in the House of Delegates. I've been impressed by the way he has worked with the Virginia Open Education Foundation in pursuit of open-source textbooks for Virginia schools that can be easily updated and printed on demand as circumstances warrant. (See "A 'Textbook' Study of Knowledge-Wave Education Policy.")

But I was terribly disappointed by Peace's defense of GOP budgeting for education in an op-ed piece published in today's Times-Dispatch. The House of Delegates' budget "does more for public schools" than any of the Democratic alternatives, he argues. By "doing more," he means, "spends more money."

Our budget increases funding for K-12 public education by more than $1 billion compared to the existing budget. In total, the House budget directs $13 billion to public education -- exceeding the Senate's proposal by $68 million and the governor's by $193 million. By adopting our budget, we not only rejected the governor's proposal to cut school construction grants by $220 million, but actually added $70 million. We also made a first-year pay raise for teachers a priority by providing the state's share of a 2 percent raise in 2008.

This is why people pejoratively refer to Virginia's two parties as the Repucrats and Demoplicans. The only answer either party offers for the challenge of reinventing education for the 21st century is "Mo' Money!" Other than the so-called "65% solution," which would require school districts to spend a larger share of their funds in the classroom and less on administrative overhead, Republicans have devised few alternatives to the if-schools-are-failing-they-must-need-even-more-money approach to education.

In Peace's defense, his column does address the runaway-spending aspects of the Standards of Quality formula that determines the allocation of state aid for K-12 school programs. But that's not a cause that will catalyze people into thinking creatively about education. The formula is so arcane -- almost kabbalistic in its impenetrability -- that peoples' eyes glaze over when anyone tries to describe it. By contrast, open-source textbooks was a clever idea that anyone can grasp. Why can't we see more fresh thinking like that?

If the Republicans want to differentiate themselves from the Democrats, bragging how they spend more money on education won't do the trick. The public will always associate Democrats with greater spending on education. If the GOP wants to present an alternative to voters, they need to argue, it's not how much you spend but how you spend it.

The Watkins Bill Is Dead for Now, But It Raised Issues that Cannot be Ignored

A House of Delegates committee has spiked a bill that would overhaul Virginia's patchwork system of proffers and impact fees, but not because lawmakers are enamored with the current system. They hope to come back next year with legislation that reflects more input from local governments, reports Sandhya Somashekhar with the Washington Post.

Remarkably, the Republican-dominated House was in agreement with Gov. Timothy M. Kaine, a Democrat, on the issue. Stated Kaine yesterday: "I can see some significant problems with the proffer system." The governor said he would be open to a more "uniform, rational" system that helps lower housing costs.

The problem with the legislation, sponsored by Sen. John Watkins, R-Powhatan, and backed by the home building lobby, is that it set the impact fees at a ludicrously low level: $12,500 in Northern Virginia and $7,500 in the Rest of Virginia. Local governments estimate the fiscal impact associated with the construction of a new home -- providing schools, roads, public safety buildings -- at $40,000 or more in fast-growth jurisdictions like Loudoun and Prince William.

However, the bill offered one very powerful insight that makes it worth revisiting next year: It would have imposed impact fees on "by right" development, as opposed to collecting proffers only from developers who rezone their land. Currently, local governments get no recompense for by-right development. The downfall of the bill is that the fees it specified are so low, it is feared, that even expanding the tax base would not make up the difference.

The problem of by-right development is much bigger than most people realize. Because it gets a free ride fiscally speaking, by-right development enjoys a tremendous competitive advantage in the marketplace. That's unfortunate because by-right development consists largely of small-scale, pod-style development -- not the larger, planned communities with mixed uses and walkability that many home buyers prefer. Thus, the current proffer/fee system subsidizes the scattered, low-density human settlement patterns that consume so much energy, generate so much pollution and make public services so more expensive to provide.

In an ideal world, local governments would dispense with negotiated proffers and apply impact fees on all development, thus broadening the tax base and creating a level playing field between rezoned and by-right projects. But the impact fees would be set high enough to recompense local governments for the expense of widening roads, extending water and sewer, building new schools, erecting public safety buildings, buying new fire trucks, etc.

The challenge is to devise an agreed-upon methodology for calculating thoses costs and setting a reasonable fee to cover them. Different municipalities make their own calculations. Which costs do they include? Which costs should they include?

That raises another critical issue: Should impact fees be uniform? I would argue that not all human settlement patterns are created equal. Some projects are configured in such a way as to pose less financial burden on the community -- fewer Vehicle Miles Driven per resident, few lane-miles of road to maintain, fewer miles of water and sewer pipeline to run, shorter distances for school buses to drive, shorter response times for police, fire and rescue crews. Would it not make sense to create a fee schedule that varied depending upon the impact of the development project in question?

Embedded in the empirical question of what expenses the fees cover is the philosophical question of what they should cover. Should new development bear the full fiscal cost of providing public infrastructure, or should existing residents bear a share of the burden as well? Does loading up the full fiscal burden onto new development make housing unaffordable, creating a whole new set of issues and problems?

However one answers these questions, it is clear that the Watkins bill does not address them. The task of devising a fair and reasonable methodology for calculating and setting impact fees, I would submit, should be the top issue on the agenda for whomever studies the issue later this year.

The Right Vote for the Wrong Reasons

Republicans in the state Senate have spiked the so-called homestead exemption, a proposed constitutional amendment that would have enabled local governments to shift the property tax burden from homeowners to commercial property owners.

There are good reasons to oppose the legislation, as I've blogged in the past: It would hurt renters, who are disproportionately poor and working class, and it would provide the middle class only a temporary reprieve from steadily upward marching tax rates. If lawmakers really want to help taxpayers, quit with the gimmicks and address the rising cost of government.

Unfortunately, according to the Washington Post, the Republicans didn't cite those legitimate reasons for killing the bill. Aside from worrying about the higher tax on business, they told the Post, "It was a flawed bill that needed more scrutiny. In particular, they said, the language could be construed to let only certain neighborhoods receive the exemption."

They're objecting to the legislation on the basis of a technicality? If the language of the bill were corrected so that exemption applied to an entire locality and not just "certain neighborhoods," they might consider supporting the homestead exemption? C'mon.

The problem with the legislation is that it is structured as a win-lose proposition: For every person who benefits from tax relief, the tax burden gets shifted to someone else. It's inherently divisive. The only long-term solutions to the problem of overtaxation are productivity and efficiency. That means streamlining government administration. Encouraging the development of human settlement patterns that are less expensive to serve with roads, utilities and services. Squeezing the bureaucratic bloat out of K-12 education. Reforming a dysfunctional health care system that drives up Medicaid costs. Develop programs that rehabilitate prisoners and ease their re-entry into society. Anything else is rearranging deck chairs on the Titanic.