Tuesday, April 19, 2005

Free Roads? That's What Mike Krusee Says.

Rep. Krusee has a fascination with building roads, toll roads in particular. First let's get one thing straight about this whole debate about roads and how to pay for them. Roads are not free and never will be, despite what Rep. Krusee says. Someone has to pay for them. That someone is the taxpayer. The only debate is over which taxpayers will pay the taxes and in what packaging or what type of marketing campaign will they come in. Yes, Virginia, even though Rep. Krusee won't tell you so, tolls on roads are a tax. It's just like all other tax games Republicans play: they shift the burden from a progressive tax -- the more you earn, the higher your tax rate -- to a regressive tax -- the less you earn, the higher your tax rate.

On Monday HB 2560 was debated in the House. The bill would allow cities and counties to keep a percentage of the tolls collected. If you have time, you can read the debate here. It's relatively short. Use the 'Find' option in your browser and type in 2560, then let the fun begin. I will try and summarize it here.

The debate on this bill consisted of two scuffles. First, it was Krusee vs. Rep. Pickett, a Democrat. Then it was on to Krusee vs. Rep. Kolkhorst, a Republican. Both were trying to get Rep. Krusee to admit that this bill is intended as an incentive to local governments to build toll roads. He would not. The other point that Rep. Pickett wanted to get across was the fact that the money the local government would collect did not have to go into the toll project it came from, which he finally admitted.

From what I gathered Rep. Krusee's point in all of this is:
  • the initial toll road is built with bond money, some of which comes from the local government;
  • the bond is then paid for with property taxes;
  • if the local government negotiates a percentage of the toll, it is "paid back" money to use on future road projects;
  • therefore the local government does not need to raise a bond for the next road project.
But in no way is that new road free, as Rep. Krusee tries to say. It was paid for with the money we paid in tolls/taxes. Aren't we just being sold the same line again? Wasn't that the whole theory of toll roads? That they get built quicker because they generate revenue? Then that revenue is used to pay for the bonds that were needed to build the road, for upkeep, and to build other roads. So why do we need a bill to allow local governments to recoup a percentage of the toll when that's already the case? And why do we need this further reasoning to build toll roads? Or as Rep. Pickett and Rep. Kolkhorst refer to it as an 'enticement'? One reason is because people would rather not have toll roads. The other is that if you can con someone into believing they're getting something for free, they will go for it every time.

But for all of this toll road talk, it still comes down to tolls or taxes. Would you rather pay a toll or pay property taxes? Property taxes are deductible from your federal income taxes. Tolls aren't. You're still paying either way. But who is paying more? The toll hurts the poor and middle class more than the wealthy. There are a couple more questions that still need to be clarified:
  • What keeps the local authority from spending this money on something else?
  • Won't future roads, 20 years from now, cost considerably more? Therefore causing the need for a bond to be raised for those projects?
If you read that debate from Monday, Krusee uses the words "opportunity", "paid back", "free", "avoid tax increase" and "future generations" over and over again. He's got his talking points down, and he's framing the issue. If you are against his bill, you are against all of those 'oppotunities'. He has to do this because Republicans can't say they're raising taxes, even though that's exactly what they're doing. The only problem is, they say to themselves, how do we get the money to build roads without overtly raising taxes? Build toll roads, of course! And give promises of free roads in the future.

The only people that seem to benefit from this are those that always benefit from roads being built: landowners and developers. The Comptroller pointed this out last month (Favoritism and Self-Enrichment) as part of her review of the CTRMA. No one was ever charged with a crime, but there sure is plenty of evidence that these people are going to make money off of this deal. It just looks bad.

Speaking of who benefits, during the debate, Rep. Krusee brought up "participation payments" which were passed last session. Do you know what these are? Participation payments are a deal for the landowner who owns the land where these roads are going. Instead of selling the land and getting a one-time payment, landowners can opt for participation payments which give them a percentage of the toll for up to 45 years. Or, as your governor explains it:
..."participation payments" for landowners [are] similar to a royalty in the oil and gas industry. That means landowners can choose to profit financially for decades or receive the traditional fair market value cash payment when the land is purchased.
So they get to keep their land, which goes up in value, and also get a take of the toll for 45 years. Rep. Krusee says this was done for the farmers. But if you read the entire article from the Farm Bureau the farmers don't seem to happy about it. It makes me wonder if maybe the legislature didn't have someone else in mind when they instituted participation payments. Hmmm...

The ultimate purpose of my posting today is to try to point out that billions and billions of taxpayer dollars are being spent on toll roads and billions more will surely be collected. We need to pay attention to what is being done with that money. When our elected officials get involved in creating and changing laws regarding these roads, we need to pay extra close attention. Participation payments may be OK, I don't know. Do you? They sure put an Orwellian name on it, and that always makes me skeptical.

We're in this together, folks. Let's help each other out and keep an eye on this kind of thing. This has been a lot to pore over, so if you see something that's wrong or that you don't agree with, let me know. Remember, there are no free lunches--or, in this case, free roads.

Coming next: HJR 80, aka, Save the tax give-aways for developers and corporations.

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