Tim Kaine’s transportation plan gets leaked – and it stinks

The Governor will present his proposal for transportation funding later today (it is just past midnight as I write this) at noon.  The AP’s Bob Lewis managed to get the details ahead of time, and as one would expect, it’s not good (Daily Press).

For starters, let’s not forget that this is a Governor who promised not to raise taxes, but is now calling for three separate tax hikes.  The tax increases themselves are:

• An increase in the car titling tax from 3% to 4% (registration fees will also rise)
• A regional sales tax increase of 1% for Northern Virginia and Hampton Road
• An increase in the “grantor’s tax,” i.e., the de facto sales tax for homes

Allow me to dissect these in turn.

I know Jim Bacon sees gas tax increases as de facto user fees for roads.  I’m not sure it’s as good a user fee as Jim does, and furthermore, I disagree with the user fee approach in general (I don’t think it takes into account how some users value some roads far more than others regardless of car use).  Either way, however, titling and registration taxes are even more indirect, and thus more prone to error on the user fee side, than gas taxes.  Furthermore, at a time when the economy stands on the knife’s edge, to throw a monkey wrench at one of the most important industries we have (automobiles) borders on insane.

Next up is the regional sales tax.  Lest anyone forget (and Kaine shouldn’t – he was Lieutenant Governor at the time), the people of these regions had the option of raising this tax on themselves in a 2002 referendum.  As one can see here, the voters in Northern Virginia rejected it by nearly 10 points, and in Hampton Roads, the margin of defeat for the tax hike was more than 20 points.  Six years later, the Governor is basically telling these voters to drop dead.

Finally, there is the grantor’s tax.  The illogic behind this is breathtaking.  Has anyone else been stupid enough to propose a tax increase that will make it harder to sell real estate and make it less valuable in the process?  Given the aforementioned state of the economy, and the woeful state of the real estate market, this is a spectacularly bad idea.

Those who read this space know that I have been particularly hard on Bill Howell and the rest of the House Republican leadership, and I still think their attempts to resurrect HB3202 are terrible.  However, that doesn’t make Kaine’s plan any less disastrous.  Neither transportation plan should be accepted.  The only transportation plan that is worthy is the one that does not call for any tax increases.

Is Kaine’s plan worse than Howell’s?  Brian Kirwin at Bearing Drift is almost certain to say yes.  I would, too, though I consider it a only matter of degree.  Either way, the rightosphere should (and in fact, must) be united against Kaine’s plan.  It stinks, period.