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Transportation and InfrastructureA Bus Stop For the Price of a Bus Terminal
I live in Arlington, Virginia, a tiny county that happens to be right next to our nation’s capitol. One of the many reasons I live there is that the state of Virginia seems to have a much better handle on spending and the size of government, especially when compared to neighboring Maryland and Washington DC. So much so that the state had a $220 million surplus back in July. There are other great benefits to living in Arlington including amazing food trucks, access to the Metro system, and Arlington Cemetery. BUT the county seems to want people to be impressed with a piece of nondescript concrete a mere 6 blocks from where I live. It’s a bus stop. It cost $1 million and I’m not the only one who paid for it. You did too. According to Arlington Now, the county just completed the “Super Stop,” which is the first of 24 such advanced bus pickup points with a shelter for “some 15 passengers, lighting, an electronic display that shows when the next buses are coming, and a number of unbranded newspaper boxes.” It took a year and a half to construct. An Arlington County spokeswoman reported that $575,000 was spent for construction and $440,000 went towards management and inspections. First point: I am not read up on the intricacies of Arlington and Virginia building codes but if just a forth of the latter amount ($110,000) was spent on inspections then this is a serious case of overregulation.Now to what all of this has to do with you taxpayers across the country. The county paid $200,000 for the glorified street corner and got the remaining $815,000 from the Virginia Department of Transportation, who in turn will get $996.9 million federal funds for road infrastructure projects in FY 2013. Second point: According to Reed Construction Data and their 2008 numbers, it costs an average $1.294 million to construct a basic 12,000 square foot single-story bus terminal using union labor. To clarify, it is conceivable that Arlington County could have built a terminal with the costs of this single bus stop. I estimate that the bus stop is around 180 square feet but, even if it was double that (360 sq ft), they spent $2,828 per square foot. 1 Comments | Post a Comment | Sign up for NTU Action Alerts
Will Virginia Gov. McDonnell Veto His Own $6.1B Tax Plan? "I’m going to be able to find other ways to fund transportation.” –Bob McDonnell, September 2009 Now, when asked about taxpayers’ backlash to his 5-year, $6.1 billion tax hike, Governor Bob McDonnell is all smiles. “Listen, I’ve been looking all over the state for contractors who will build our roads for free,” McDonnell joked in a recent interview. “Haven’t found any of them yet!” As a Virginia taxpayer, I’m not amused. McDonnell campaigned against transportation tax hikes. Now, he’s thrilled that the Virginia General Assembly approved his colossal tax increase. Friday’s PolitiFact piece shows the full extent of the Governor’s flip-flop. In a 2009 campaign ad, he declared, "My plan: New money for transportation, while protecting education and not raising taxes.” See for yourself: McDonnell still hasn’t signed his $6.1 billion tax monster into law, but judging by his eagerness to defend this “historic accomplishment,” Virginia taxpayers should brace themselves. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
Pay-Per-Mile Tax Proposals As the push for more fuel efficient transportation intensifies, U.S. officials are warning of major future deficits for the Highway Trust Fund, established in 1956 to support the construction and maintenance of the Interstate Highway System. The Highway Trust Fund is financed through transportation-related excise taxes, the most significant of which is the federal gasoline tax. However, as fuel efficiency standards become stricter and Americans head to the pump less often, gas tax collections are expected to decrease over the next decade, and federal transportation funds could face substantial long-term deficits. A May 2012 report from the Congressional Budget Office showed that at 2012 spending and taxation levels, the Highway Trust Fund is looking at a $147 billion shortfall by 2022. After factoring in a 21-percent reduction in gas tax receipts due to increased fuel efficiency standards, that deficit increases to $204 billion. The CBO determined that the government has 3 options to address the looming problem:
As part of the BillTally project, NTUF analyzed legislation introduced by Rep. Earl Blumenauer (D, OR) in the waning hours of the 112th Congress that opts for the third course of action. H.R. 6662 would authorize $154.5 million to study the impact and feasibility of a mileage-based user fee system. Such a system taxes drivers by the number of miles they travel rather than the gallons of gas they consume. A report conducted by the Government Accountability Office (GAO) in the same month examined some of the costs and benefits of three different types of mileage tax methods: GPS, "pay-at-the-pump," and prepaid systems. GPS systems use satellite technology and cellular transponders to track the number of miles a registered vehicle travels over a given time, which is then processed at a central location and billed to the driver. Obvious concerns include the cost of implementing such technology in the over 200 million registered passenger vehicles across the country, as well as the perceived invasion of privacy a tracking system of that magnitude is likely to provoke. Germany currently uses a similar system to tax commercial trucking industries. "Pay-at-the-pump" methods require a wireless transponder be installed in every vehicle, which transmits mileage information to a central database when drivers go to gas stations across the country. Based on that data, fees are automatically adjusted for each driver before billing at the pump. Again, cost and logistical challenges are a major impediment to making this system viable, and some high-efficiency electric vehicles do not require trips to the gas station, making it difficult to enforce the fee collection for some drivers. Prepaid systems require drivers to purchase "mileage licenses," which allow travel over a certain number of miles before the license must be renewed. Such a system is already in place in New Zealand, where it applies to diesel-fueled vehicles (mostly commercial trucks, but some passenger cars as well). The GAO noted that this system is prone to equity issues, as drivers can tamper with odometers to avoid paying fees. Any of the three proposed systems would generate additional revenue over the long run, but they pose major logistical and financial challenges (both in implementation and administration), create privacy concerns for many Americans, and would significantly increase transportation costs. The GAO report modeled the effect of a 0.9 to 2.2 cent per mile tax on a typical American driver, and found that even at those levels, taxpayers could expect to pay $108 to $248 per year in fees. Currently, the average driver pays about $96 in gas taxes each year. That would mean an increase of at least 12.5% in annual transportation expenses for the typical driver if Congress decides to follow through on these proposals. NTUF does not endorse any candidate or position. For more information on BillTally, please visit http://www.ntu.org/ntuf/. 2 Comments | Post a Comment | Sign up for NTU Action Alerts
Why Virginia Gov. McDonnell’s Tax Hike Plan is a Bad Idea This week, Virginia Governor Bob McDonnell unveiled his transportation funding plan that would eliminate the State’s 17.5 cents-per-gallon gas tax and impose significant hikes on the sales tax and vehicle registration fees. Under the Governor’s proposal, the Virginia sales tax would jump from 5 to 5.8 percent, car registration fees would spike $15, and Virginians with cars that run on alternative fuels would be hit with a brand new $100 fee. In truth, these new “fees” are actually taxes because they wouldn’t be dedicated to road construction, but instead would fund mass transit projects, such as building passenger rail between Lynchburg and Roanoke and lengthening the Norfolk light rail service into Virginia Beach. An additional $300 million would be set aside for the Metro’s Silver Line, a costly project that began nearly four years ago. If all goes according to McDonnell’s plan, weary taxpayers (who are already getting pummeled by a lousy fiscal cliff deal and rising health care costs) will be on the hook to help the Governor reach his goal of raising an additional $3.1 billion by 2018. Though, as the Tax Foundation pointed out, the Governor’s math is fuzzy to say the least. True, Virginia’s transportation financing is in desperate need of restructuring, but McDonnell’s plan is a burden-shifting tax hike at its core. Not to mention, it relies on Congressional passage of dangerous online sales tax legislation to reach even deeper into Virginia taxpayers’ wallets to the tune of $1.1 billion. Banking on the so-called Marketplace Equity Act would make Virginia part of a predatory tax collection scheme that will ultimately hurt small Internet-based businesses and, undermine the principles of tax competition that have benefitted the Commonwealth. Also, can we really expect the Virginia Department of Transportation to be good stewards of billions in new revenue? In 2010, an audit of VDOT uncovered hundreds of millions in unspent funds. Governor McDonnell’s plan thankfully avoided an income tax boost, but there are other positive approaches that could be taken instead of his burden-shifting sales tax hike. The way in which Virginia’s transportation funding is allocated should be given more attention, and lawmakers should look to strengthen public-private partnerships made possible through the Public Private Transportation Act (PPTA) of 1995. Thanks to the PPTA, the $1 billion I-95 Express Lanes project, which began in July 2012, required only $70 million in state funding. Policymakers should increase the number of these partnerships in the Commonwealth, which have saved the State billions of dollars and years of construction time. Virginia should also look to states like Missouri for better ways to deliver transportation improvements under budget and on schedule. In 2006, the Missouri Department of Transportation saved taxpayers $91 million through “radical cost controls” such as keeping bids for construction jobs low, asking contractors to propose innovative solutions, and slashing administrative costs. For even more inspiration, VDOT should examine this Texas Department of Transportation report for 49 highway construction and maintenance cost control ideas. It is likely that Virginia officials have considered some of these proposals, but until they have provided demonstrable evidence that these ideas have been considered and implemented to the maximum amount possible, overburdened taxpayers will continue to oppose schemes such as the one proposed by Governor McDonnell this week. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
Speaking of Taxpayers, July 20, 2012: NTU’s New State Affairs Manager, Post Office, & More Subscribe to NTU's podcast "Speaking of Taxpayers" via iTunes!
NTU's new State Affairs Manager Lee Schalk joins Doug & Manzanita (in Pete's absence) to discuss state taxpayer issues that are still popping up despite the summer heat. Also the 'Fiscal Five' & 'Outrage of the Week!'
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Big Brother Hitches a Ride For months, Congress has been engaged in a prolonged debate over the “Highway Bill.” Now in conference, it’s common knowledge that this massive bill is regarding federal funding for highway safety and construction projects. The noise coming out of Washington surrounding the bill has trended toward topics like jobs, spending, big price tags, and even the Keystone pipeline. While more government spending is bad enough, what is worse in some ways are the things in the bill people aren’t talking about. What aren’t your legislators talking about? They aren’t talking about a provision in S. 1813, section 31406 that requires all new cars sold in the U.S. starting in 2015 to contain event data recorders (EDRs) or “black boxes.” This new black box mandate poses serious privacy threats and is an unnecessary power grab on the part of government. Ahead of the first conference meeting on the highway bill, Sen. Boxer, the chairwoman of the Senate Environment and Public Works Committee and lead sponsor of the Senate bill, stated: “Now is the time to set aside our personal wish lists and focus on the issue at hand – the reauthorization of a bill that is absolutely essential to our economy. Controversy should not be part of the conference and we should come together for the good of the country.” If that is the case, by Boxer’s own reasoning, the black box mandate should be the first to go from her own bill, both due to its controversy and to any ATM-like job-killing potential this electronic device might have. Joking aside, TheTruthAboutCars.com has an insightful write-up on the issue. The article describes how parts of the mandate give the federal government new powers previously held by the states and opens a potential floodgate when it comes to government surveillance. Theoretically the car owner or lessee would still own the data, but the bill carves out exceptions that could give the government broad access to your personal travel data. In addition to creating a slippery slope for new government incursion into your everyday life, even the National Motorists Association points out that they are wholly unnecessary. Unlike airplanes that experience problems thousands of feet in the air where the conventional “black box” is essential to discerning what went wrong and how to prevent future tragedies, the NMA explains that: … from a research perspective, there is no rational or scientific need nor justification to equip tens of millions of vehicles on a perpetual basis with black boxes. … While denials abound there is good reason to believe that the promotion of universal black box installation in new vehicles has more to do with regulatory, enforcement, judicial, and corporate economic interests; all at the expense of vehicle owners who are forced to pay for and retain this form of self-surveillance. Go here to sign the pledge urging members of Congress and President Obama to oppose any federal action to mandate the use of black box data recorders in personal vehicles. The pledge sums up the problem:
Unfortunately, tracking its citizens seems to be a theme with government lately, at all levels. While the Supreme Court ruled earlier this year that warrants are required for law enforcement to affix GPS trackers to personal vehicles (over the disagreements of the Obama Administration), warrantless searches of cell phones (basically a personal GPS) are still permissible. And just this week, Reason.com posted a story about how the DEA is trying to convince legislators in Utah to let them scan and store license plates for future reference. Libertyvoice.net is also following the story and offers a few scenarios about where all this surveillance could lead. Here’s one hypothetical, but not unrealistic scene: A DEA risk-analysis system alerts the police in Utah that the same car is traveling between Salt Lake City and Nogales, Arizona on a monthly basis. The next night, a divorced father visiting his child in Arizona receives a knock on the door from federal agents to interrogate him about his travel. Perhaps, with the help of other, circumstantial evidence, they even get a warrant, execute a paramilitary raid, and shoot his dog dead, traumatizing his child. We need to kick Big Brother to curb. Go here to sign the pledge. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
Tax Hikes Go Back to the Future Today, the Senate Finance Committee is marking up their transportation bill with an eye toward adding billions in tax increases to cover the overspending in the bill. More spending, more tax hikes to pay for it. Stop me if you've heard this before. But there are two proposals in particular that gave me a little bit of policy deja vu. First, the so-called "Chairman's mark" includes a $3 billion retroactive tax increase targeting the "carrying forward" of credits claimed back in 2009. You might remember 2009 as the year before the year before this year. The halcyon days when we passed a "stimulus" bill that was going to help our economy boom by 2012. The optimistic times when we could totally afford a trillion-dollar government-run health care program and our debt was "only" $10-11 trillion (as opposed to $15 trillion and counting today). Some on the Senate Finance Committee apparently would like to relitigate tax policy from that wonderful era in American history and enact a retroactive tax hike. Now, it should be noted that the two credits they're targeting (the alternative fuel mixture credit and the cellulosic biofuel producer credit) are not ideal tax policies by any stretch of the imagination. Particularly the alternative fuel credit, given that it's "refundable" and thus acts like government spending rather than simple tax reduction. A smart tax code wouldn't include either of these policies but would levy low, consistent taxes across the board for all types of fuels and producers. But enacting retroactive tax increases is a much more egregious violation of principles of sound tax policy than either of those dumb credits. The second effort, a proposed amendment to the Chairman's mark from Senator Robert Menendez (D-NJ), would target the oil and gas industry for punitive tax treatment by eliminating provisions like the Section 199 manufacturer's deduction or the "dual capacity" credit for them alone. If we've written it once, we've written it a hundred times: singling out oil and gas companies for higher taxes is bad tax policy and it's bad energy policy. Thankfully, the Congress has thus far largely agreed with us as the dozens of attempts in recent years to impose Menendez-like tax increases have all failed at one point in the process or another. The Senate Finance Committee will be taking up these issues this afternoon and we hope they focus their efforts on reducing wasteful spending and not on retroactive tax hikes or tired attempts to punish an unloved industry. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
FAA Conference Report: Positive Steps, Missed Opportunities Later today the Senate will vote on the Conference Report on the Federal Aviation Administration (FAA) Reauthorization Act. Although the bill takes many positive steps forward, it ultimately missed several opportunities for savings and reforms that fiscal conservatives had sought. Since 2007 the FAA has been lurching from short-term extension to short-term extension (23 in all), which has become a serious logistical impediment for the aviation sector’s attempt to modernize and grow. The Conference Report would reauthorize FAA operations and programs for four years, thus creating a more stable funding path for the agency and predictability for the aviation sector. Moreover, it does so without worsening the already onerous tax burden on air travel. Given that consumers can often face a higher effective tax rate on their airline tickets than they do on their 1040 tax returns, it’s too bad Congress couldn’t go one step further and actually provide relief from this heavy tax load. The bill makes incremental (and in some cases solid) progress on a number of other issues. Although funding for the wasteful Essential Air Service has not been eliminated, the modest eligibility restrictions in the legislation could provide a starting point for deeper reforms. Language was also included to increase airports’ ability to hire private security screeners in place of Transportation Security Administration (TSA) workers. Furthermore, the package would make improvements to a National Mediation Board rule so as to better balance labor organizations’ attempts to unionize a workplace with the rights of workers to not participate in union activity. Despite this progress, the Conference Report’s elevated authorization levels remain a major concern. NTU has previously expressed its support for the House-passed FAA Reauthorization Bill, which would have funded the FAA at 2008 levels. By contrast the Conference Report would extend FAA funding at inflated 2011 levels – a $3.8 billion increase. At a time when taxpayers are expecting government agencies to do more with less, the Conference Report could have been more aggressive at restraining expenditures and reinforcing a private sector-driven model that allows our aviation industry to more effectively innovate and evolve. Bottom line: even as lawmakers line up to vote for this compromise legislation, Congress could have done – and in the near future will need to do – more to ensure aviation policy is on a fiscally and economically desirable flight path. 1 Comments | Post a Comment | Sign up for NTU Action Alerts
The Thing About Expediency and an Infrastructure Bank
In yesterday’s speech before a joint session of Congress, President Obama called for new spending to help get the economy going again and to get Americans back to work. Putting aside the debate on how to truly fix the economy and how much of the fixing ought to be legislated by government, let’s take a look at one of the items the President offered as part of his overall solution: a national infrastructure bank. As he said: "And we’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it would do for the economy." Such a bank is no new concept. Besides inclusion in the President’s proposed FY 2011 budget, four pieces of legislation have been introduced in the 111th and 112th Congresses to establish government borrowing entities for transportation, water, and energy projects. While a bill introduced by Congresswoman Rosa DeLauro (CT-3) would create a wholly-owned government bank is worth noting, the President specifically mentioned a “Massachusetts Democrat”-supported bill, likely the BUILD Act, sponsored by Senator John Kerry (MA). BUILD would authorize $10 billion in new borrowing authority for infrastructure ventures, with a $2 billion real cost to taxpayers in start up expenses and loan guarantees. BUILD was highlighted in the July 26th edition of the Taxpayer’s Tab. According to information provided by the White House, the bank under the President’s proposal would cost $10 billion over an undefined period of time. One would hope everyone will have a better idea of the timetable once the bill is released to the public. However, it appears, the President’s new infrastructure bank proposed would require a greater infusion of federal dollars than the plans supported by any member of Congress, be it Democrat or Republican-controlled. More to the President’s point, he touted the immediate need for the provisions he outlined in his American Jobs Act, saying “right now” seven times in the address. Yet the establishment of a new bureaucracy to exclusively funnel public and private dollars into projects creating and improving roads and dams is no easy task. There are several steps to follow. Once the government is authorized to create the bank (no small feat in the current political environment), personnel would have to be hired and offices set up, rules would be drafted, and money would have to be allocated and transferred to dedicated accounts. THEN planning and loan applications would have to be submitted and approved or denied with appropriate time tables of conducting further administrative actions, contracting of construction and design companies, and buying of building and support materials and machinery. Rather than “right now,” “near future” would be more accurate timetable under the best of circumstances. It would be foolhardy for Americans -- employed or otherwise -- to assume infrastructure jobs would be immediately available. Massive construction projects take years to plan, let alone implement, start, and finish. The jobs that would come would be turned out just as slowly. As Obama joked about the first “stimulus,” “shovel-ready was not as shovel-ready as we expected.” 1 Comments | Post a Comment | Sign up for NTU Action Alerts
Eliminate the Gas Tax? TaxGirl asks the following question at Forbes: "Should the federal gas tax be reduced or eliminated in order to jump start the economy?" Would it help? Would it make a difference at all? Would our infrastructure implode without the funding? Share your thoughts with us and with TaxGirl. 1 Comments | Post a Comment | Sign up for NTU Action Alerts
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