Tag: gas tax

Transit projects in Gaithersburg to benefit from fuel tax revenue

The increase in Maryland’s fuel tax, signed into law by Gov. Martin O’Malley (D) last week, is projected to raise hundreds of millions of dollars for Montgomery County road and transit projects, including two major projects in Gaithersburg.

The proposed Corridor Cities Transitway bus rapid transit system and an interchange on Interstate 270 at Watkins Mill Road are among 10 new projects — totalling $1.2 billion in spending — that will benefit from the increase in revenue.

The Corridor Cities Transitway is a 15-mile system of dedicated bus right-of-way that will run from the Shady Grove Metro Station in Rockville to the COMSAT site in Clarksburg. The first part of the route, between Shady Grove and the Metropolitan Grove MARC station, will receive $100 million for final design work and for rights of way.

“That project will still require a significant amount more to get the project fully funded,” said Tom Lonergan, Gaithersburg’s director of economic development.

The source of those remaining funds — expected to be upward of $400 million — has not yet been determined. Construction on the system is expected to begin in fall 2018.

Lonergan said the $125 million allocated for the Watkins Mill interchange will be used for final design and construction costs of the $165 million project.

The interchange will link two unfinished portions of Watkins Mill Road over I-270 in Gaithersburg. Drivers will be able to enter and exit I-270 from Watkins Mill Road, providing relief to the intersection of Md. 355 and Montgomery Village Avenue.

Dan Gross/The Gazette<br /> Watkins Mill Road west of Rt 355 is a dead end that is currently used for parking by construction crews working nearby. The fuel tax revenue will be used to complete the interchange with Interstate 270.

Watkins Mill Road west of Rt 355 is a dead end that is currently used for parking by construction crews working nearby. The fuel tax revenue will be used to complete the interchange with Interstate 270.The state budgeted about $40 million to the interchange project earlier this year, Lonergan said.

“It should get the job done,” Lonergan said.

County Councilman Phillip M. Andrews (D-Dist. 3) of Gaithersburg said the interchange would encourage economic development in the upcounty as well as relieving congestion.

“I’m very pleased to see [the projects] moving forward,” he said.

Also funded, the proposed Purple Line light rail system which will run from New Carrollton to Bethesda. The project is projected to cost $2.2 billion in total, and will receive $280 million for final design work from the tax revenue.

“Without the new funding, these critical transit projects could not have moved forward,” said Stewart Schwartz, executive director of the Coalition for Smarter Growth.

Transit projects are the ideal way for the county to accommodate its traffic and growth and to remain competitive in the future, Schwartz said.

Construction on the Purple Line could begin as early as 2015 for a 2020 opening; daily ridership is expected to reach 69,000 by 2040, according to the state Department of Transportation.

The transportation funding law indexes the state’s current 23.5-cent-per-gallon fuel tax — which has not been increased since 1992 — to inflation but limits increases to 8 percent per year.

A sales tax of up to 5 percent also is added to the wholesale price of fuel, to be phased in throughout three years. If the federal Marketplace Fairness Act is adopted, the new sales tax would be limited to 3 percent.

County Executive Isiah Leggett (D), who has been an advocate for increased state funding for transportation, praised the new law after the bill-signing, saying that it would support thousands of jobs in Montgomery County by allowing projects to move forward. The new law is expected to support 57,200 jobs over the next six years, according to the O’Malley administration.

Photo courtesy of Dan Gross/The Gazette

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Transit, Purple Line Activists Hit Annapolis For Lobby Day

Transit and smart growth activists greeted leaders in Annapolis today with gravestones representing “the impending death” of transportation projects such as the Purple Line if the General Assembly does not come up with transportation funding in this legislative session.

Representatives from D.C.-based Coalition for Smarter Growth, which is spearheading the “Get Maryland Moving” campaign, Purple Line Now and others made the slushy trek to the State House to meet with about 20 legislators and put on the demonstration.

State Transportation officials say without a source for state transportation funding, matching federal dollars for the 16-mile Purple Line light rail that would connect Bethesda with Chevy Chase, Silver Spring and College Park, among other places, would be in jeopardy.

The Maryland Department of Transportation plans to halt design work on the $2.2 billion project if no funding is provided from the current General Assembly.

On Monday, Gov. Martin O’Malley (D), House Speaker Michael Busch (D) and Senate President Thomas V. Mike Miller (D) announced their plan for a new tax on gas wholesalers that is projected to mean a 2-cent hike in gas prices this July and another 7-cent hike next July. The plan is projected to bring in $3.4 billion over the next five years, which likely would not be able to fund for the Purple Line and the Red Line light rail project in Baltimore simultaneously.

“In spite of the weather, we couldn’t have chosen a better time to come to Annapolis. We’re thrilled to finally see unified action and leadership from Governor O’Malley, Speaker Busch, and President Miller, and will do all we can as residents to organize for a statewide solution that invests in real transportation solutions for all Marylanders”, said Robbyn Lewis, founder of the Red Line Now PAC, in a prepared statement.

According to polls, a clear majority of Marylanders are against any raise in gas prices. Republicans against the proposal have argued the transit projects the funds will help support do not benefit rural areas of the state.

Rendering via Maryland Transit Administration

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Virginia’s Transpo Future: Charge Drivers Less to Build More Roads

Congratulations are owed to Bob McDonnell. He’s scored a victory on his transportation funding plan, cementing his legacy (though infuriating conservatives, including his hand-picked successor). His achievement is being called the first bipartisan initiative to pass in Virginia in decades. And what does this great deed accomplish? Secure revenue to fuel a new era of wasteful road-building in the commonwealth of Virginia.


McDonnell’s new transportation funding plan will pay for the wasteful and unnecessary expansion of Route 460. Photo: Doug Kerr/flickr

Virginia’s state House and Senate both voted this weekend to approve McDonnell’s funding plan for transportation, despite opposition from anti-tax activists. McDonnell’s original proposal to eliminate the gas tax entirely got massaged a little bit, turning into a 3.5 percent tax on the wholesale price of gas.

His proposal to raise the sales tax survived the legislature, as did the $100 tax on alternative fuels – an idea that is somewhat less backwards now that some semblance of gas tax remains. Democrats hate it, though, and McDonnell has already signaled a vague willingness to “review” it.

The sales tax hike, however, is as backwards as ever. McDonnell is raising the sales tax 0.3 percent in most parts of the state but 6 percent in the populous Hampton Roads and northern Virginia areas. Much of the extra funds raised in those areas will go to local projects, but it still means the most urban and transit-rich areas, where most of the state’s non-drivers live, will pay more for a plan that disproportionately funds rural roads.

Drivers will pay five cents per gallon less than they did under the old gas tax, given current prices — shrinking their contribution by about 30 percent. Rather than strengthen the gas tax’s small but important incentive to drive less, McDonnell’s plan turns it the other way.

The other reason the sales tax hike won’t do the trick is that sales taxes aren’t an appropriate tool when what you need is a stable source of funding.

FTA Administrator Peter Rogoff said the same thing last month when outgoing AASHTO Director John Horsley proposed a percentage sales tax on gas instead of a flat tax. “In transit-land, sales taxes rise and fall with sufficient amplitudes here that it makes or breaks projects,” he told an audience at TRB later in the day when Horsley made his proposal. “Just because it’s a sales tax doesn’t mean that it’s stable.”

According to economists Michael Madowitz and Kevin Novan, writing in the Washington Post, California’s transportation sales tax fluctuated 13.5 percent over the past decade while the fixed gas tax fluctuated just 1.2 percent.

“Given that it is far easier to predict gas consumption than prices,” they wrote, “it is prudent to tie transportation revenue to consumption.”

The one thing that’s predictable about gasoline consumption is that it will continue to drop. People are driving less, and the cars they’re driving are using less gas. Any gas tax solution is only a temporary fix. Does this mean McDonnell is right to want to drop the gas tax altogether? Not at all. Does it mean he’s smart to look to other sources of income for transportation? Of course – though he’s still looking in the wrong place.

Worst of all, the transportation expenditures envisioned in McDonnell’s plan are heavy on sprawl-inducing highways. He touts the multimodal aspects like high-speed rail and finishing the silver line to Dulles airport. But Stewart Schwartz of the Coalition for Smarter Growth characterizes the legislation as “truly a highway bill.” Even the maintenance funds it allocates ($538 million a year) will only serve to free up construction funds for rural highway-building.

Trip Pollard of the Southern Environmental Law Center called the package “too road-heavy” and said, “Virginia has to move toward a more balanced approach that provides greater transportation choices and a cleaner, more efficient system.”

Pollard’s and Schwartz’s organizations, together with other smart-growth groups, lamented the lack of reforms required in the funding bill. “It doesn’t require wiser spending by VDOT even as it effectively allows for about $500 million a year in additional highway construction funding for VDOT,” they wrote in a statement.

In his article for Greater Greater Washington about the bill, Stewart Schwartz wrote about where the money is going:

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 Connaughton 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.

He notes that just 21 percent of the statewide funds go to transit and passenger rail in 2018.

Photo courtesy of Doug Kerr on flickr

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McDonnell pushes through landmark transpo bill – Sequester rhetoric ratchets up – W.H. warns states of cuts – Will you change your travel plans?

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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Bumper to Bumper: Transportation groups ally to campaign for state funding

Transportation interest groups from around the state formed a coalition that they hope will influence state lawmakers’ budget priorities.

The Coalition for Smarter Growth and about 20 other organizations from Bethesda to Baltimore are pushing for the state to increase funding for transportation. They formed “Get Maryland Moving” on Feb. 19, hoping to make a bigger impact on budget decisions.

Leaders of Get Maryland Moving warn that without a source of new revenue, critical projects like the Purple Line and Corridor Cities Transitway could be delayed for years.

One of the new coalition’s members is Purple Line Now!, a Montgomery County and Prince George’s County alliance of local organizations that support the 16-mile light-rail project.

The Purple Line would connect Metro’s Red Line at the Bethesda station to the Green Line at New Carrollton and is estimated to cost about $2.1 billion. Without state funding, however, the Purple Line will not be built, County Councilmember George L. Leventhal said.

The Maryland Department of Transportation has started designing the light-rail line, but the state has not dedicated funds to build it.

“Our campaign right now is to get transportation funding,” Purple Line Now! President Ralph Bennett said. His organization first started working with the Coalition for Smarter Growth — a Washington, D.C.-based organization dedicated to transit-oriented communities — last year.

“We came to the realization that we couldn’t get very far [by ourselves],” Bennett said. Purple Line Now! sends emails to constituents to encourage them to support their cause and meet with legislators. But, now that they are part of Get Maryland Moving, they can cast a wider net to look for support, he said.

Get Maryland Moving plans to make its case in Annapolis on March 6 by making fake gravestones for a major transportation project in every jurisdiction of the state, according to Bennett.

“If we don’t get funding,” he said, “all of those projects will die.”

The Greater Bethesda Chevy Chase Chamber of Commerce is also a member of Get Maryland Moving.

“Transportation has always been a top priority for us, and the Purple Line is it,” said the chamber’s president and CEO, Ginanne Italiano. “Our concern is it’s wasted taxpayer dollars if they don’t finish the job and get the funding going.”

Italiano said transportation funding is at a “critical point,” and Get Maryland Moving is what’s necessary to gain support. The chamber is planning to ask its members to come to Annapolis and talk to legislators about what they want for the Purple Line.

“With the sequester happening, it’s vital,” she said.

Follow the money in Virginia’s transportation bill

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 projectsRoute 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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Historic Transportation Bill on its way to Virginia Governor

The final hours of the Virginia State Senate session have handed Governor Bob McDonnell the legacy-building legislation he’s been fighting for.

Lawmakers voted for a landmark transportation funding package that will raise $880 million dollars for road construction, maintenance, and transit.

The legislation replaces the per gallon gas tax with a 3.5% tax on gas at the wholesale level and a 6 % wholesale tax on diesel fuel.

The state’s sales tax will increase from 5% to 5.3%.

And the motor vehicle sales tax will rise from 3% to 4.3%.

In a statement, McDonnell called this an historic day.

“We have worked together across party lines to find common ground and pass the first sustainable long-term transportation funding in 27 years,” McDonnell says.

When it’s fully phased in, the reform bill will raise more than $500 million dollars to erase the maintenance budget deficit, and fund new roads, mass transit, and provide more money for Hampton Roads and Northern Virginia.

There’s a whole wide range of projects, the key is though they have to reduce congestion and be on a regional plan,” Delegate Vivian Watts (D- Springfield/Anandale) says.

Stewart Schwartz from the Coalition For Smarter Growth is cautiously optimistic.

“We need to ensure that we’re fixing congestion at Tyson’s, I-66, and the Route 1 corridor and investing in transit that Northern Virginia needs.”

Getting this bill through was in jeopardy up until the last few hours on the final day of the session.

Senate Democrats had threatened to block passage of the tax and fee increases, unless the Governor agreed not to block expansion of Medicaid to 400,000 uninsured in Virginia.

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Senate Vote Passes $880 Million Highway Reform

The state Senate has passed the first long-term reform to Virginia’s floundering 27-year-old system for funding repairs and upkeep of its 58,000-mile network of highways.

The 25-15 vote sends to Gov. Bob McDonnell what would be the defining policy legacy in the fourth and final year of the single, non-renewable term Virginia allows its governors.

It would replace Virginia’s 17 1/2 cents-per-gallon retail gasoline tax with a 3.5 percent wholesale tax on gasoline and a 6 percent levy on diesel fuel. It boosts statewide sales taxes from 5 percent to 5.3 percent. It increases the titling tax on car sales and adds a $100 registration fee for fuel-sipping hybrid vehicles. It also rules out proposed tolls on Interstate 95 south of Petersburg.

“Giving localities the responsibility to raise taxes to pay for a limited range of projects, while most existing revenue is diverted to wasteful new highway projects, is not a good deal. Over the long term, it will result in local tax base, not state transportation revenues, covering the cost of the transportation systems that serve the majority of Virginians,” Chris Miller, President of The Piedmont Environmental Council said in a statement.

The Executive Director of the Coalition for Smarter Growth said it is now up legislators and local elected officials to watch-dog how the money is spent.

“Where we spend our tax dollars and whether we are supporting more efficient, smarter growth with our transportation investments should be a central topic of this year’s Governors race,” he said.

Photo courtesy of WUSA9

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The Smart (Growth) Crowd Weighs In

My smart growth buddies have issued a critique of the compromise transportation-funding deal. Among the highlights in the press release issued jointly today by the Coalition for Smarter Growth and the Piedmont Environmental Council:

Cutting gas taxes by up to one-third reduces the tie between transportation use and funding. “Transportation, unlike our schools, is like an electric utility, yet the primary fee—the gas tax—hasn’t been increased in 27 years. Transit users have been paying increased fares, year after year, yet road users would see a reduction in daily travel costs under the bill, leading to a potential shift from transit to driving, more driving and more congestion.”

The proposal feeds wasteful spending.  “The Virginia Department of Transportation (VDOT) is squandering most of the $3 billion in borrowed funds authorized by the General Assembly in 2011 and we can expect more of the same.” Hard-to-justify projects include the Charlottesville Bypass, the Coalfields Expressway and the Route 460 Connector. Another $1.25 billion in funds raised by the tax restructuring will be lavished upon a Northern Virginia Outer Beltway.

The proposal offers no statewide funding for local road needs.  “VDOT has zeroed out funding for local roads over the past few years. Instead, the bill will make Northern Virginia and Hampton Roads increase sales taxes and wholesale gas taxes to pay for local roads. This is a major step toward devolution and passing on the cost of local roads to Northern Virginia and Hampton Roads.”

The compromise pushes all new transit funding — the 0.3 cent addition to the sales tax — into the General Fund, forcing it to compete with schools, health care and other public services.  “Dulles Rail should long ago have been funded through the Transportation Trust Fund. It should not be a bargaining chip to get Northern Virginians to agree to taking General Fund revenues.”

Bacon’s bottom line: I agree with most of this critique — the General Assembly compromise enables a dysfunctional Business As Usual. I do take exception with one point, however. I believe that all modes of transportation should stand on their own two feet, so to speak. I don’t believe in subsidizing rail or mass transit any more than I believe in subsidizing roads. We need to create a level playing field — put each mode on a user-fee basis — and let the most economical mode win.

Would it then be impossible to finance new rail projects? Not necessarily. We could make rail more viable if we could figure out how to tap a portion of the real estate value created by rail projects to help finance the construction. That’s where we need to concentrate our energy, not how to stick non-users with the bill.

Photo courtesy of Bacon’s Rebellion

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Advocates Form Coalition To Push For Purple Line Funds

A new coalition is advocating for dollars for state transportation projects, including the planned 16-mile Purple Line light rail that would connect Bethesda with New Carrollton, The Washington Post reports.

Get Maryland Moving, a coalition of groups, including the Montgomery County and Bethesda-Chevy Chase chambers of commerce, Purple Line Now, Action Committee for Transit, and the League of Women Voters of Maryland, is pushing for state legislators to make new revenue for transportation projects a top priority this legislative session, according to the group’s website.

Maryland Senate President Thomas V. Mike Miller Jr. (D-Dist. 27) of Chesapeake Beach has proposed a 3-cent gas tax that would raise about $300 million for transportation projects, Patch reported.

But without a tax increase to fund the Purple Line, the project—along with Baltimore’s Red Line and the Corridor Cities Transitway through the Interstate 270 corridor—could be put on hold, Maryland transportation officials have said. Montgomery County officials and transportation advocates have argued that deferring the funds in the state’s transportation funding plan could stall the projects and make them less competitive for federal dollars.

Get Maryland Moving is encouraging Maryland residents to contact their legislators and sign a petition supporting transportation funding. The petition reads:

“No funding solution this year means that critical capital projects such as the Purple Line, Red Line, and MARC upgrades may be delayed for years or decades. We call on our leaders to take a different path: to invest in our future by securing funding for critical transit projects, road maintenance, and other investments to support smart, sustainable growth for Maryland.”

Photo courtesy of MTA

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