On the "transportation deal": no matter how you spin it, it’s still a tax hike

It’s been over six hours since the Virginia Republicans revealed their “transportation agreement.” A whole slew of blogs have mentioned or weighed in on the deal (BVBL, Bacon’s Rebellion, Bearing Drift, Elephant Ears, Mason Conservative, Virginia Virtucon). Surprisingly, no one seems to have given the deal the smackdown it deserves (although J.A. Bowden certainly seems ready to pounce, and NOVA Townhall will probably not be too happy). Well, if I have to be the first, so be it.

Make no mistake, this deal has some good points, in particular the proposal to get the state out of the subdivision road maintenance business). However, this plan still includes new taxes, over a third of a billion dollars worth. The fact that the tax-addicted VA GOPers are forcing Northern Virginia and Hampton Roads Supervisors and City Councilman into co-dependency doesn’t make the plan any better, just more cynical and cowardly.

The Associated Press has the specific details. I focus on these:

Boosts the per-gallon tax on diesel fuel 16 cents per gallon to 17.5 cents, generating $20 million annually . . .
Five counties and four cities together (in NoVa) could raise $383 million annually by:
increasing the commercial real estate assessment to 28 cents per $100, generating $275 million . . .
Sixteen localities in Hampton Roads together could raise $209 million annually by:
increasing the commercial real estate assessment to 30 cents per $100 in value, generating $60.9 million . . .
increasing the “grantors tax” paid on real estate transactions to 40 cents, generating $33.2 million . . . (emphasis added)

Now, how this tax money will be limited to the geographic locations is another matter entirely (I trust Mr. Bowden to give regional governments the takedown they so richly deserve). The point I wish to make is that our peerless leaders in the General Assembly were so afraid to impose the tax hikes in which they believe by themselves that they created a mechanism to hide behind Northern Virginia and Hampton Roads elected officials. It’s bad economics wrapped up in bad politics.

Why do I say bad politics? Simple: at some point, one of these jurisdictions is going to balk at the tax hike. They will immediately look like heroes for standing up for their taxpayers and telling Richmond to take this deal and stuff it. Meanwhile, MSM will make absolutely certain local officials that do approve the hike can use Richmond as cover (”there was no other way to get the money” - get ready to hear this over and over again). So rather than being able to use the local politicians as cover, the Richmond Republicans will find themselves catching flak from local officials and the MSM.

Just in case anyone is breathing a sigh of relief over the lack of statewide tax hikes, or more economically damaging ones, consider this line from State Senator Tommy Norment: “There will be some adjustments. Nothing’s cast in stone.”

Be afraid, be very afraid.

Meanwhile, here are some questions no one is bothering to ask yet.

What happened to the $9.4 billion in spending increases included in this budget, and the other $272 million from the $545 million surplus?

How is it that Governor Jim Gilmore found over $400 million in budgetary rescissions to balance a $46 billion biennial budget, but these elected officials can’t find that much in a budget over 50% higher than that one?

How many counties outside the regional tax zones will take the opportunity to jack up their own property taxes to either demand the equivalent in transportation money from Richmond or just to take advantage of their neighbors’ higher taxes and score higher revenues for their own spending binges?

The Virginia Republican legislators are trying very hard to make this look responsible, well thought out, and frugal, but it’s all lipstick on a pig. This deal allows the General Assembly to keep spending like drunken sailors, while the taxpayer is stuck with the check, again. The fact that everyone outside NoVa and Hampton Roads who doesn’t use diesel fuel is spared (for now, see above) makes it no less damaging.

As the blog title implies, I am in no position to say what a “conservative” would do when faced with a vote on this, but a politician from the right would vote it down. This tax hike is a bad deal; Virginia would be better off without it - and Virginia would be further better off replacing Republicans who support it with Republicans who oppose it in the upcoming primaries.