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Transportation and Infrastructure
Virginia transportation audit finds a lot of change in the couch cushions
As I travel across the country and I meet with legislators from cash-strapped states, I tell them that they should look carefully at their budgets to find savings. To use a metaphor, lawmakers need to reach into the cushions of their couch (aka the state and its bureaucracy) and feel around for the change that is lost and left there. By determining where the money is going, using funds as they should be, and finding savings here and there, legislators can help balance their budgets and meet their obligations without the need for burdensome tax hikes or draconian cuts. Sadly, few legislators have taken me up on the offer. Many of these lawmakers have told me that “budgets have been cut to the bone” and “there’s simply not enough savings” to do what they need to do.
The next time I hear a legislator say these things, I will send them a copy of this article from today’s Washington Post. Yesterday, Virginia Governor Bob McDonnell announced that a new audit by Virginia Department of Transportation (VDOT) found “hundreds of millions of dollars” sitting unspent in various accounts. In total, auditors found a little more than $1 billion in funding just sitting there; about $400 million in construction and maintenance accounts and, believe it or not, $654 million in federal money that was never allocated to any projects. That’s a lot of change.
The auditors also prepared a report explaining the problems, such as poor communication and inertia, which contributed to the loss of the money between the cushions of the couch known as VDOT. Auditors made 50 recommendations to correct these problems. McDonnell said that the state would move to implement these changes in the next 45 days. Sean Connaughton, Virginia’s Secretary of Transportation, said the state will decide what to do with the money in the next 45 days, but he indicated that at least some of the money will be spent on transportation projects in Northern Virginia such as improving the much-criticized and congested Interstates 66 and 95.
Virginia’s billion-dollar find of loose change is instructive for two reasons. First, it demonstrates the importance of good auditing and the need for transparency in government. NTU has worked with legislators, including Virginia Attorney General Ken Cuccinelli when he was a state senator, to implement meaningful budget process reforms, including the use of mechanisms to track spending. When we know where the tax dollars go, we see what should stay funded and what should go. Second, legislators should not discount eliminating waste and finding savings as a way to deal with budget problems. No legislator thinks $1 billion is small change. Granted, savings alone will not solve every problem that overspending creates, but it will go a long way. Let’s all have a go at digging between those couch cushions.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Spending is saving?
“Sometimes you have to spend money to save money.” So said Pennsylvania’s Governor Ed Rendell at a Monday morning news conference in Harrisburg to detail his proposal to fund transportation projects in his state.
Specifically, Rendell wants the General Assembly to approve his plan for $1 billion in various taxes and fees on Pennsylvania oil companies and drivers to pay for roads, bridges, and mass transit. Rendell wants to slap Pennsylvania oil companies with an 8% gross profits tax and increase the driver’s license fee by $4 (from $28 to $32, which includes the mandatory photo charge). Additionally, Rendell would raise the car registration fee $13 (from $36 to $49) and increase the fee for inspection stickers $3 (from $2 to $5).
Based on the media reports, it appears the governor said little about how raising $1 billion in taxes now will save Pennsylvania taxpayers money later. In fact, Pennsylvania’s transportation secretary has suggested that it will take at least $3.5 billion to fully fund transportation needs going forward. There is a huge gap between $1 billion and $3.5 billion, which will have to be bridged. Unfortunately, if history is any guide, that bridge looks like more tax hikes down the road.
Rendell also employed a fairness argument in defense of his oil profits tax proposal. He said, “megafirms such as Exxon and Shell often try to hide behind the image of small "mom and pop" companies while they rake in huge profits.” But this is not exactly accurate. Oil companies typically pay more in taxes than they make in profits. In a recent report, Scott Hodge of the Tax Foundation wrote, “[S]ince 1981, when the failed windfall profits tax was first enacted, federal, state, and local governments in the U.S. have collected more in taxes from the oil industry than the industry has earned in actual profits for its shareholders.”
As I pointed out in a recent blog post, more money, especially in the form of higher fees and taxes, is not the answer for better transportation in Pennsylvania. The Commonwealth Foundation reports that Pennsylvania ranks fourth in overall highway spending, yet has the worst roads in the nation. What Pennsylvania needs is reform in its transportation policies, including reform of prevailing wage laws, more privatization of services, and increased service sharing.
This is not the first time the governor has proposed increased taxes or fees to pay for transportation. Rendell proposed a tax on oil companies back in 2007, which went nowhere fast. Just a few weeks ago, Rendell targeted drivers with higher gasoline taxes and fees to pay for transportation projects. Clearly, he has not gotten the message. During his news conference, Rendell said, “The time to act is now.” Indeed. Let’s hope that the General Assembly swiftly and decisively rejects the governor’s proposal.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Expanding High-Speed Rail
Ever been frustrated with bumper-to-bumper traffic, road rage, or hour-long commutes? If you're like me, the answer is a resounding yes. But have no fear. President Obama has a solution! A few weeks ago, the Department of Transportation announced part of Obama's plan to increase funding for high-speed rail systems across the country. They informed us that $80 million in grants has been given to several states to help improve their rail systems. The majority of the funding will be allocated towards the development of a high-speed rail system in Florida. A significant portion of the funds will also be used to create new tracks or repair old ones between major cities in California, Wisconsin, New York, and New Mexico.
That's not all. "The grants released today are merely the very beginning of many more to follow," claims Transportation Secretary Ray LaHood. That's just what we wanted, especially considering that Congress already appropriated $8 billion for high-speed rail funding in 2009 and an additional $2.5 billion to this plan in 2010.
Although many Americans would like to believe high-rail transportation is the savior of US transportation problems, this simply isn't the case. Obama's high-speed rail system plan is not likely to reach more than 1% of the passenger travel market. And the environmental benefits? There isn't too much good news on that front either. A Florida high-speed rail study found that their trains would produce more nitrogen oxides and organic compounds and use 3.5 to 6 times more energy than the cars they would replace.
This isn't even the whole picture. Obama has visions for still more extensive rail system repair. His entire plan proposes to update all 12,800 miles of the track system – a proposal that is estimated to cost close to $50 billion. Is the current Administration actually proposing a $50 billion transportation plan – that is neither cost-efficient nor environmentally friendly – at a time when our nation is facing a growing debt of $13 trillion?
Yes. The only encouragement we are offered is that grants such as these are "merely the very beginning" of what's to follow. I guess the "best" is yet to come. Uh oh…1 Comments | Post a Comment | Sign up for NTU Action Alerts
Earlier this year NTU published an Issue Brief which explored taxpayer-friendly options for replacement of America’s water and sewer systems, and concluded that PVC pipe was a viable (and often preferable) material for the task. We had hoped that a lively discussion would ensue over a fiscal policy matter that often receives short shrift.
Here’s a sample from the exchange of views:
And the following:
Which opinion should carry the day? We leave that up to you, dear readers, but we would all do well to remember that every time we turn a faucet handle or look down a manhole cover, serious money is at stake as well as clean water.9 Comments | Post a Comment | Sign up for NTU Action Alerts
The Center for Public Integrity has a new report out about the massive transportation lobby seeking federal funding. Some of their findings:
There is a lot of federal money to chase:
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Hey, Buddy, Wanna Buy an FAA Tower?
The Wall Street Journal's Washington Wire reports that the Federal Government has 14,000 structures and buildings that it believes that it can sell for cash -- an estimated $15 billion. Of course, the challenge is getting Congress to sign off on the sales. If you think that's going to be easy, I have a bridge you might be interested in.
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