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May 2008
Politics in Virginia: Kaine and GOP at Odds on Shortfall
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"As Gov. Timothy M. Kaine kicked off a statewide tour Tuesday to sell Virginians on tax increases, House Republican leaders accused him of exaggerating claims that the state will fall nearly $3 billion short of what is needed to maintain its roads and bridges.

House Republicans vowed to kill Kaine's proposal and said the governor, a Democrat, is painting an overly gloomy picture of the state's needs, using a snapshot of today's sluggish economy to predict how much money will be needed over the next six years.

"The numbers are questionable at best," said House Majority Whip M. Kirkland Cox (R-Colonial Heights). "It creates a panic scenario."

But Kaine and his administration defended the forecast, which reveals a shortfall in funds for road and bridge maintenance that will reach nearly $3 billion over the next six years. The forecast employed a five-year-old method approved and used by the General Assembly for the state budget.

Kaine called the GOP argument "bogus" and said he is accustomed to Republicans calling his financial forecasts either optimistic or pessimistic "depending on what the talking point of the day is."

Kaine unveiled a proposal Monday to raise $1.1 billion a year by increasing taxes on new-car sales and vehicle registration fees. The plan includes a one-cent sales tax increase in the state's two most congested areas, Northern Virginia and Hampton Roads.

The General Assembly will return to Richmond next month for a special session on transportation. Kaine traveled Tuesday night to Woodbridge to test the proposal on a town-hall audience.

"I know I don't have to say to anyone in Prince William that transportation is a challenge," Kaine told about 160 people in a county government building.

"What's difficult is getting legislators to come together and solve the problem," Kaine said. "It's past the time for us to act."

The meeting followed a question-and-answer format. One questioner wanted to know whether Kaine had considered making money available by cutting spending for other purposes. The governor was also asked why no gas tax increase has been proposed.

"I said no to a gas tax because of where gas prices are," Kaine replied.

"Gas is like food and medicine," he said. "It's a necessity, and the best thing to do is meet our needs without a tax."

In attendance at the meeting were both backers and foes of Kaine's plan.

"I don't mind paying more taxes," said Greta Houston, 62, of Occoquan. "The taxes you are suggesting are not that much, and I'm proud to pay them if they'll keep our transportation system going."

But Woodbridge business owner Bryan Martin said: "I don't understand why it always has to be about raising taxes. The economy is in a critical time. I think it's wrong to raise taxes. You should cut spending more."

House Republicans, including Speaker William J. Howell (R-Stafford), oppose Kaine's proposal partly because of their anti-tax philosophy and partly because they do not believe the need is crucial and must be addressed this year.

"They're painting a gloomier picture than what's actually out there," said Del. Phillip A. Hamilton (R-Newport News), vice chairman of the House Appropriations Committee.

Although House Republicans dispute Kaine's figures, they do not have their own estimates, arguing that economists can calculate numbers to show whatever someone wants. Del. David B. Albo (R-Fairfax) said the need is "halfway" between what Kaine and House leaders say.

The state collects transportation money from dozens of sources, but most comes from taxes on gasoline, cars and other products. About $1.5 billion a year is spent to maintain roads and an additional $1 billion a year to construct them.

In recent years, a downturn in the economy and rising prices for asphalt and steel have forced the state to spend money on maintenance that was supposed to be for construction.

"Even if this problem is half as dire as they say, the money is still needed," Del. Ward L. Armstrong (D-Henry) said. "Does anyone in this state really think we don't have a transportation problem?"

A year ago, Virginia's transportation troubles appeared to have been resolved. The General Assembly passed a landmark package last year to pump $1.1 billion annually into transportation across Virginia. Regional authorities were set up to collect $400 million a year in Northern Virginia and $200 million in Hampton Roads.

But lawmakers repealed the steep abusive-driver fees, which were estimated to bring in $65 million a year. Then the state Supreme Court ruled that the regional authorities could not constitutionally levy taxes and fees because they are not elected bodies.

House Republicans said Kaine has played down the fact that last year's plan will still produce about $500 million a year for the state. Transportation Secretary Pierce R. Homer says there is $200 million less for transportation each year than what officials estimated when the bill passed last year.

Last year's plan also mandates that two-thirds of any surplus in the general fund be spent on transportation. No surplus exists this year, but House Republicans said Kaine's forecast should have included millions of dollars in future surplus estimates.

Homer said the state could not do that. "By law, we have to have adequate money to enter into highway and rail construction contracts," he said. "We can't substitute good intentions for the ability to pay."

House Republicans said Kaine's forecast should have taken into account historical trends, anticipated growth and the usual ebb and flow of the economy.

House Majority Leader H. Morgan Griffith (R-Salem) said the administration used the "slowest rate of growth for the next 10 years" to calculate its forecast.

"It's based on numbers that project we're going to have a flat economy for the next decade," he said. "I don't believe that's true for Virginia. I certainly hope not."

In 2003, the General Assembly passed a bill that changed the way the state calculates forecasts in response to the exaggerated estimates of revenue by the Virginia Department of Transportation. The finance secretary, who works for the governor, now calculates the forecasts for all state government with advice from state and national economists and legislative leaders.

Even some Senate Republicans do not dispute the method or the extent of the problem.

"There is a lot of room for debate on how to fix transportation, but I think there is very little room for debate on how big the transportation problem is," said Sen. Kenneth W. Stolle (R-Virginia Beach)." (Anita Kumar, The Washington Post, May 14, 2008)

Staff writers Jennifer Buske in Woodbridge and Tim Craig in Richmond contributed to this report.


Comments? Questions? Write me at george@loper.org.