Why a special session to fix transportation funding is a bad idea

Now that the celebration is over, those of us who opposed HB3202 for so long must come to terms with the next phase – and the painful reality that the tax-hiking ciphers in Richmond have a third-of-a-billion dollars excuse (roughly, From on High) to sock it to us again.

After all, what was an unconstitutional series of tax hikes has become a “funding gap” – and we know what the Democrats in Richmond like to do with “funding gaps.”  The good news is that the Senate and House GOP seems to have seen the light on taxes.  The bad news is that because we are now back to the status quo ante 3202, we may get the political status quo ante 3202, i.e., panicked Richmond Republicans convinced that a tax hike is better than “doing nothing” on transportation.

Meanwhile, just about everyone assumes the “fix” for transportation will come in a special session this spring and summer.  I think that is a terrible mistake, and here’s why.

In the short-term, if the funding question is not included in the budget, it will almost certainly involve a tax increase: When even Chris Beer (Mason Conservative) responds to the new reality by whining about money, it’s abundantly clear funding will be the top issue in the short-term.  I don’t mean to sound simplistic here, but funding issues should be resolved in and by the state budget, period.  In my line of work (Department of Defense cost estimating), we have what we call the “rack and stack” – namely, we set priorities and establish the budget line.  What’s above the line gets funded; what’s below the line doesn’t.

I know the legislators have already had to make some painful choices, but the time has come for more painful ones.  Delaying the decision on transportation funding is actually making the decision – the decision being to sock the taxpayers again.  What the Republicans should do is make clear this funding is more important than Governor Kaine’s big-government wish list.  If, however, this goes to a special session, than the funding will become “supplemental” – and in state government, supplemental funding only comes via new or higher taxes.  That’s the first reason why a special session is a mistake, but it’s not the most important one.

This will not be settled by a two-month session, but rather a two-year dialogue and (yes) and election: The fact is that transportation funding has been a distorted argument from the get-go.  Democrats, who always look to government, play their usual role, but Republicans, who have heard free-market economists defending public transportation funding as far back as Adam Smith himself, end up either muffled, muzzled, or a mess.

However, this isn’t 1776 – or 1932, or even 1976 – anymore.  The notion that only the taxpayer can fund roads makes a lot less sense today, when so many “roads” are actually subdivision streets with very few consumers.  Likewise, the need for a centralized road system may have been wise in 1930 (when there were a lot fewer roads and people out there) but the strain of one-size-fits-all planning in a state like Virginia is obvious.

What we desperately need is a discussion on the future of transportation – a future that involved decentralization, a role for direct property-owner funding (subdivision maintenance especially), and other more exotic things like congestion pricing.  Meanwhile, it will take about five minutes (and I’m begin generous, I think) before this debate spills over into the usual regional argument between wealthy jurisdictions who want funds to continue their dynamism (Northern Virginia and Hampton Roads) and the less developed areas who are trying to catch up (everyone else outside of Richmond, its suburbs, and the geographically androgynous Fredericksburg area).

This won’t be resolved in a special session that will likely be dominated by short-term funding issues.  It will take arguments tha belong in the off-year legislative session (i.e., next year’s) and an election campaign.  With any luck, we will see a genuine division on the role of government in transportation, with the voters deciding the state’s direction.

Could it happen?  I think it can.  Will it be far less likely if we shove all of this into a special session this year?  You better believe it.

I doubt Governor Kaine will resist the temptation to call the special session, and the Senate Democrats already want a tax increase on gas.  So it’s up to Speaker Howell to insist the current funding at issue get handled in the current budget without a tax increase.  Then, perhaps the special session can be where the desperately needed dialogue begins.  Otherwise, we’ll just be spinning our wheels, literally.