McDONNELL’S LEGISLATIVE LEGACY: To Virginia Gov. Bob McDonnell, Saturday was a big deal. After nearly three decades of population growth, increasing gridlock and waning transportation revenues, the potential 2016 contender got done a comprehensive transportation revenue that evokes many of politics’ great compromises: No one loves it, but a majority didn’t vote against it, either. “It’s a broad, bipartisan compromise to [address] an intractable problem, that will serve Virginians well for a generation,” McDonnell said in an interview Sunday, just a few hours after his landmark bill passed. It wasn’t easy, even for him, to come around to the package that passed. But it had to be done, he explained, describing Virginia as having a “math problem” rather than a political one. “I really struggled with this early on, about the fact that as part of the final agreement, there were going to have to be some new revenues,” McDonnell said. “Reagan said, ‘Look, we have not raised the gas tax in 20 years and our infrastructure is crumbling.’ … He said the same thing I said: ‘I don’t like it, this is not my first choice, but we don’t have another solution.’ So he signed the bill.” Alex Burns and Burgess take it away: http://politi.co/VH4M47

What D.C. can learn: If McDonnell’s successful push to rejigger his state’s tax system to deliver more transportation money is any guide, the federal government needs to get out of the per-gallon gas tax game to get conservatives onboard. His state will spread new transportation revenue across the board: a reduced at-the-pump tax, new wholesale fuel fees, a larger share of sales tax revenue for transportation and a $100 annual fee on hybrids and alternative fuel vehicles. And though it doesn’t kill the state gas tax like he originally envisioned, he got a lot of what he wanted — and avoided receiving a bill he would feel compelled to veto. “I said at the beginning, we’ve got to reduce our reliance on the gas tax. Gas tax is on a long-term death spiral,” he told MT. So does this bill send a message that Virginia doesn’t expect any more revenue help from the feds? “At least in the short term, yes. They’ve got the same problem,” he said. “As long as the state or federal gas tax … is a flat cents [fee], you are going to have the same problem.” Burgess has more: http://politico.pro/15Jfknz

Want more? It’s a fairly complicated scheme, and WTOP has the conference report in legislative form: http://bit.ly/136lVc4. And Coalition for Smarter Growth has a good, simple summary: http://bit.ly/15b1nxs

LaHOOD: SEQUESTER SPOKESMAN: Transportation Secretary Ray LaHood has been the administration’s loudest voice against the sequester, going on a media blitz in recent days to warn of long lines and fewer flights if the automatic spending cuts go through. On Sunday, LaHood went on CNN’s “State of the Union” (http://politi.co/UXXYjC), where he talked about furloughs and his job as an ambassador to his former House GOP colleagues. Right after that, the secretary hopped over to NBC’s “Meet the Press” (http://politi.co/YoNbwP), where he said that, even with less than a week to go, “there is still time to reach a compromise.”

For shame, good sir: A few big-name Republicans weren’t too happy with LaHood’s remarks on the Sunday talk shows. “Shame on Ray LaHood,” Arizona Sen. John McCain said on CNN after the secretary spoke (http://politi.co/WcvcgB). And Louisiana Gov. Bobby Jindal, after LaHood spoke on “Meet the Press”, told the president to “stop sending out your Cabinet secretaries to scare the American people.”

Fact-check one two, one two: The White House released a series of White House fact sheets Sunday evening on the sequester’s impact on all 50 states, each offering the latest version of its warnings that cuts to the FAA and TSA would have a national effect on aviation. They caution that the FAA “would be forced to undergo a funding cut of more than $600 million,” prompting the agency “to undergo an immediate retrenchment of core functions by reducing operating costs and eliminating or reducing services to various segments of the flying community.” Team Transportation takes it away: http://politico.pro/137QrCx

Prognosis negative: The Senate Democrats will try to pass a package of cuts and tax increases to avert the automatic cuts, but the outlook isn’t too positive right now. Rogers report: http://politi.co/X5gruK

Friday surprise: Before hitting the talk show circuit, LaHood swung by Friday’s White House press briefing. The secretary said the cuts could mean “calamity” for travelers and will have “a very serious impact on the transportation services that are critical to the traveling public.” At the same time, FAA put out comprehensive lists of air traffic control towers where overnight shifts could be ended (http://1.usa.gov/12Ymq80) and a separate list of control facilities that could be closed (http://1.usa.gov/X07npr). But top aviation Republicans weren’t sold. “Before jumping to the conclusion that furloughs must be implemented, the administration and the agency need to sharpen their pencils and consider all the options,” Commerce ranking member John Thune, House T&I Chairman Bill Shuster and T&I’s Aviation Chairman Frank LoBiondo said in a joint statement. Burgess and Kathryn break it down: http://politi.co/X2ygKR

Want more? Those wanting the full exchange between LaHood and White House reporters can check out everything in the transcript: http://bit.ly/ZxKLjY

MONDAY FUNDAY. Thanks for reading POLITICO’s Morning Transportation, your daily tipsheet on trains, planes, automobiles and early-morning TV hits. If it moves, it’s news. Do stay in touch: beverett@politico.com and asnider@politico.com. Twitter: @AdamKSnider and @BurgessEv. More news: @POLITICOPro and @Morning_Transpo.

“So don’t jump in front of my train …” http://bit.ly/UAN4yM

SEQUESTER, STATE-BY-STATE: Three states — Rhode Island, South Dakota and Vermont — avoid any of the sequester’s aviation closures or cutbacks. California, on the other hand, has 23 facilities slated for outright closure. And Texas would be hardest hit during midnight shifts, with six facilities in cities from Austin to El Paso and Fort Worth identified for overnight shutdowns. Burgess take a state-based look for Pros: http://politico.pro/XPxG1q

Get the facts from a Republican: According to some background info distributed by a GOP source, FAA could weather the storm better than the administration is suggesting. The info notes that flights are down 27 percent since 2000 and that FAA’s operations account is up nearly $3 billion from 2002 and stands at $9.7 billion right now. “Before implementing furloughs, the FAA should review their $2.7 billion in non-personnel costs, such as $500 million for consultants, and $200 million for supplies and travel,” the two-pager concludes.

Metro morsel: The subway system expects to see fewer riders and would lose some of its federal funding as part of the cuts, according to Post Metro maven Dana Hedgpeth. http://wapo.st/WfDpv8

Scrumquester: We’d like to direct you to the POLITICO podcast “The Scrum,” on everything sequester with Maggie Haberman, Alex Burns, Jonathan Allen and Kate Nocera, hosted by Alexander Trowbridge. http://politi.co/13feRcW

WANT MORE SEQUESTER WATCH? — The specter of sequestration looms, and Jonathan Allen’s Sequester Watch delivers Pro readers a daily roundup of all of the twists and turns. To continue getting emails on all things sequester, sign up here: http://politico.pro/lvfnLQ, go to “Customize Your Topics” and select “Sequester Watch.”

WHAT THE FAA IS SAYING: LaHood and FAA Administrator Michael Huerta, in a letter to the major aviation groups, rounded up some of what we already knew about sequester but added a few more details that the secretary talked about at the White House. “We are aware that these service reductions will adversely affect commercial, corporate and general aviation operations,” they wrote. Read the letter: http://1.usa.gov/YMiCQb

LOTS OF REACTIONS: Senate Commerce Chairman Jay Rockefeller called the sequester cuts “reckless” and said that “everyone who travels for business or pleasure will be adversely affected.” NATCA President Paul Rinaldi cautioned that the cuts “may not be reversed,” adding that “closing air traffic control towers means the system will be even more compromised than anticipated.” Regional Airline Association President Roger Cohen said the “government is playing an irresponsible game of chicken — with no winners — and the traveling and shipping public will be the losers.” ACI-NA President Greg Principato thinks “decisions on cutting air traffic control services should be made based on most efficiently serving the needs and safety of the traveling public and in consultation with airports, airlines as well as affected communities.” A4A’s Jean Medina said that “no one wants to see the sequester happen,” and AOPA President and CEO Craig Fuller said he’s “deeply concerned” that the cuts “will compromise aviation safety and severely damage the efficiency of general aviation flight operations nationally.”

Busy week for controllers: NATCA also has a busy week talking about our other favorite “s” word (the first one isn’t fit to print). On Wednesday morning, the group puts out a report detailing the sequester’s effects on the aviation network, including a “detailed analysis” of more than a dozen airports. Later that day, Rinaldi speaks at the AeroClub luncheon and will chat with reporters afterwards. NATCA is also making some of its representatives available for media talks at major airport towers.

COLLISION COURSE: Truckers and safety advocates have run headlong into each other in a public spat over who to blame in crashes between cars and trucks. Both trucking groups and safety advocates are trying to bring science to bear in their arguments, with each side citing studies full of obscure terms and charts that would easily be at home in a scientific journal. Beyond the science, the problem has real-life implications: Thousands of people die every year from crashes involving big rigs, and truck-car crashes are twice as likely to cause fatalities as two cars colliding. The heated debate bubbled up again with a recent ATA study finding that car drivers are usually at fault for crashes with trucks. The Truck Safety Coalition was “appalled” at that report and shot out a strongly-worded letter. ATA replied by pointing to a FMCSA-commissioned study to back up their claims. Like every good drama, there’s a twist — the deputy FMCSA administrator who stood by the study in 2010 used to be a Truck Safety Coalition spokesman. Adam runs it down for Pros: http://politico.pro/X4Ofbh

DREAM DREAM DREAMLINER: The tête-à-tête between Boeing and the FAA on Friday afternoon on a potential fix for the company’s 787 Dreamliner fleet was “productive,” according to a statement from Boeing spokesman Marc Birtel, who said the airplane manufacturer is “encouraged by progress made toward resolving the issue.” But even in the best-case scenario, the 787 fleet may still be in chocks for weeks or longer while the FAA analyzes Boeing’s proposals. If the FAA signs off on the plan, it will still have to conduct some sort of recertification process, which is usually a monthslong process, if not longer. Birtel gave no details on the meeting except that Ray Conner, the president and CEO of Boeing’s commercial wing, and Huerta attended.

MT POLL RESULTS — Most-missed senator: It was a close one, but with 51 percent of the vote, MT readers dubbed Commerce Chairman Jay Rockefeller the most-missed transportation senator of the five who have so far announced their retirements. Frank Lautenberg was a close second, with 46 percent. With those two transportation titans, Sens. Tom Harkin, Saxby Chambliss and Mike Johanns didn’t stand a chance. Of note: Two readers think another big transportation name will call it quits before the year is up.

NEW MT POLL — Sequestration vacation: You’ve read all the stories about sequestration, air traffic controllers and long TSA lines. But if the cuts kick in, will you rethink your travel plans? Will you just get to the airport much earlier or look for alternate methods? Maybe you’ll just keep doing the same thing and hope you don’t regret it. Let us know what you’re doing to deal with air travel, just do it before Sunday at noon: http://bit.ly/1247xS5

REPORT-BAG — Insert tolling pun here: HNTB has a new white paper on “maximizing toll collection on multistate facilities.” The summary has a good description of the issue: “Aging bridges and four-lane interstates can’t keep up with the ballooning populations of multistate regions. Neither can departments of transportation, when budgets rely on funding sources as antiquated as the infrastructure.” The paper explores the background, the climate shaping policy and much more. Read a summary and download the report here: http://bit.ly/ZxAioX

THE AUTOBAHN (SPEED READ)

– Is it taking too long for NHTSA to do its work? NYT: http://nyti.ms/VGiTXz

– France clams it will be offering the cheapest HSR tickets in the world. Transport Politic: http://bit.ly/136XpI2

– California High-Speed Rail Authority settles a second CEQA lawsuit. http://bit.ly/YuLdZG

– California Senate puts forward CEQA reform effort. CAHSR Blog: http://bit.ly/ZCbEU1

– Majority of Californians support licenses for undocumented immigrants. The Field Poll: http://bit.ly/WcyAZ1

– A fascinating look at contrails and climate change, featuring some great satellite images. Atlantic Cities: http://bit.ly/XQllaG

– The Century Foundation has added Michael Likosky as senior fellow; he will focus on infrastructure issues. http://bit.ly/YIjIxN

TRIVIA NIGHT: POLITICO Pro Trivia is back tomorrow at 6 p.m., featuring POLITICO Pro’s Tony Romm and Juana Summers teeing up questions on all things policy, politics and D.C. RSVP with teams of four to eholman@POLITICO.com.

THE COUNTDOWN: The new sequestration deadline is in four days. It’s been 27 days since Transportation Secretary Ray LaHood announced his departure, and DOT funding runs out in 31 days. Passenger rail policy runs out in 218 days, surface transportation policy in 586 days and FAA policy in 948 days. The mid-term elections are in 617 days.

CABOOSE — Awesome bus stop: Qualcomm got creative with its advertising at a bus stop, putting up posters asking, “In a hurry?” or “Seen it all?” with a web page. Brave bus-waiters who visited the site were then surprised with rides from an attractive woman driving a Lamborghini, an on-the-road dog sled — and even a bus full of circus performers. The two-minute video, via Gawker, is definitely worth a watch: http://gaw.kr/XQlQBD

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Virginia’s complex transportation funding bill, HB2313, is headed to Governor McDonnell for his signature and potential amendments. The bill is a prime example of political sausage, seeking to satisfy Republican and Democrat, urban and rural, transit and road constituencies.

Photo by jimmywayne on Flickr.It also represents poor public policy by undermining the “user pays” principle, failing to reform VDOT spending, allocating far too little to transit in an urbanizing state, and off-loading responsibility for local roads to Northern Virginia and Hampton Roads.

Some political observers argue that the only way Northern Virginia and Hampton Roads could win rural legislators’ support for new revenues would be to place the burden on themselves. And they have, by increasing local sales taxes, recordation fees and transient occupancy (hotel) tax, and with a higher state sales tax, which derives heavily from the two regions.

Virginia’s smart growth and conservation community expressed concerns with the bill on Saturday.

While Northern Virginia and Hampton Roads will able to raise (tax themselves), keep, and allocate new transportation revenue, VDOT escapes responsibility for meeting the needs of the two most economically important parts of the Commonwealth. The bill frees VDOT to take more of the statewide sales tax revenues for highway construction outside the two regions.

Now that the bill has passed, and presuming the Governor signs it, it will be incumbent upon legislators, local elected officials and the public to watch-dog how the money is spent, starting with the next update of the state’s 6-year transportation plan, due in June. Setting the right priorities with the local money from and for Northern Virginia and Hampton Roads will be equally important.

Who voted for and against?

The 25 to 15 vote in the Senate included 17 Democrats and 8 Republicans voting yes, and 3 Democrats and 12 Republicans voting no. Northern Virginia yes votes were Senators George Barker, Charles Colgan Sr., Barbara Favola, Mark Herring, Janett Howell, Dave Marsden, Toddy Puller and Richard Saslaw, all Democrats. No votes were Democratic Senators Adam Ebbin and Chap Peterson, and Republican Senators Richard Black and Jill Holtzman Vogel.

The 60 to 40 vote in the House included 25 Democrats and 35 Republicans voting yes, and 4 Democrats and 36 Republicans voting no. Northern Virginia yes votes were Democratic Delegates Robert Brink, David Bulova, Eileen Filler-Corn, Charniele Herring, Patrick Hope, Mark Keam, Kaye Kory, Robert Krupicka, Alfonso Lopez, Kenneth Plum, James Scott, Mark Sickles, Luke Torian and Vivian Watts; and Republican Delegates David Albo, Mark Dudenhefer, Thomas Greason, James LeMunyon, Joseph May, Randall Minchew, and Thomas Rust.

Northern Virginia no votes came from Democratic Delegate Scott Surovell and Republicans Richard Anderson, Barbara Comstock, Timothy Hugo, Scott Lingamfelter, Robert Marshall, Jackson Miller, and David Ramadan.

The complete bill history can be found here.

Follow the money

The best source for tracking the new taxes and the funding allocations is the HB2313 Transportation Conference Report, but even this requires interpretation.

While the bill no longer eliminates all taxes on gasoline, it still reduces what road users will pay in daily operating costs. It eliminates the 17.5¢ retail gas tax and shifts to a wholesale sales tax on gas. This reduces user fees in 2014 by nearly one-third, and by 20% in 2018 assuming the receipts increase because of a rise in gas prices.

The bill makes up for reducing gas taxes primarily by increasing the sales tax on new car purchases, charging a $100 fee on alternative fuel vehicles like hybrids, and tapping statewide sales taxes on goods and services (but not food).

Day-to-day vehicle user costs will decline, and all taxpayers will pay more even if they drive little or not at all. Meanwhile, transit fares are likely to continue to climb in the absence of adequate state support for transit maintenance and operating costs.

VDOT is free to continue wasting money on unnecessary highway projects

The statewide portion of the bill is truly a highway bill: it directs $538 million (annually by 2018) to the highway maintenance accounts, but this will effectively free up an equal amount in highway construction funds, allowing the current administration to continue a pattern of funding rural highways with little traffic demand.

Just last week, VDOT announced it would allocate another $869 million in federal Garvee bonds to Route 460 and the Coalfields Expressway, two of the most wasteful, unnecessary projects in the history of Virginia. Four questionable projects—Route 460 ($1.4 billion), Coalfields Expressway ($2.8 billion), Charlottesville Bypass ($240 million), and the Outer Beltway in Northern Virginia (estimated $1 billion)—total a potential $5.5 billion in misallocated spending.

Many expect that Secretary Connnaughton intends to divert a substantial portion of the new statewide money to the controversial and sprawl-inducing Outer Beltway, rather than to the critical commuter corridor needs of the metro regions.

Just 21% of the statewide funds go to transit and passenger rail in 2018, although passenger rail advocates are rightly pleased that $44 million in 2014 and $56 million per year by 2018 will go to current Amtrak services for which Virginia is now responsible, and for capital investment in the passenger rail network. An existing funding source supports upgrades for freight rail.

The $84 million for public transit isn’t a lot of money when it must be shared among transit agencies across the state. The bill allocates a separate $300 million to Dulles Rail, but like some of the road money it’s coming from the existing state sales tax at the expense of General Fund needs like education and health care.

The bill fails to address the empty secondary and urban road capital accounts, unless the administration commits to use some of the freed-up road money in the Transportation Trust Fund for this purpose. Instead, the bill implicitly off-loads the cost of local roads to Northern Virginia and Hampton Roads through the local sales tax increases in those two regions. Shifting this responsibility allows VDOT to spend more money on rural highways.

Part of the future depends on a bill in Congress

Part of the bill also depends on the federal Marketplace Equity Act, a bill in Congress which would let states charge sales tax on Internet purchases. If that does not pass by January 2015, the sales tax on gas will rise another 1.7 percentage points to make up for the expected revenue from the MEA. This would bring gas taxes back to a level comparable to where they are today, if not a little higher at current per-gallon prices.

The Washington Post also reports that Senator Janet Howell (D-Fairfax) secured another provision that would kick in if the MEA does not pass. In that case, the amount of general fund revenue directed to transportation would drop from $200 million a year to $60 million a year.

More taxes rise in NoVa and Hampton Roads

The bill would raise between $300 and $350 million per year in and for Northern Virginia by 2018. It does so by increasing the sales tax in northern Virginia by 0.7 percentage points on top of the statewide 0.3 point increase, for a new total of 6%.

There’s also a 0.25% recordation tax on recorded deeds and a 3% transient occupancy (hotel) tax. The bill retains the existing local 2.1% tax on fuel. 70% of the funds will go to “regional” projects and 30% to local projects in the locality where the money is raised. The funds can go to roads or transit, and the Northern Virginia Transportation Authority will decide how to allocate the money.

For Hampton Roads, the bill would raise $219 million in 2018, using a local sales tax increase of 0.7 percentage points and a 2.1% local tax on fuel. However, the legislation directs these funds only for roads, despite the great need for transit and widespread support for light rail in the region.

Following the success of “The Tide” light rail in Norfolk, 62% of voters in Virginia Beach’s referendum last November supported extending light rail to the beach. The Navy has also expressed its strong support for extending light rail to Norfolk Naval Station.

In a final example of VDOT off-loading costs onto the two metro regions, the bill failed to allocate state funds to Hampton Roads’ Midtown/Downtown Tunnel project which local officials want. Instead, the authors of the bill say that localities should use the new regional funding sources if they want to buy down the costs of the tolls, even as VDOT diverts $1.12 billion of state and federal funds to the unnecessary Route 460 over the objections of many in the region.

Photo courtesy of jimmywayne on Flickr

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