Delegate Bob Hull's Richmond Report

Two weeks ago, Northern Virginia Republican members of the House of Delegates held a news conference in Tyson's Corner. They unveiled a plan relating to transportation that they will pursue during the upcoming General Assembly session.

Their idea is to sell bonds to finance road and rail construction projects in Virginia to be paid from a source of revenue now coming to the General Fund.

Their proposed funding source is a tax on insurance premiums that was originally envisioned to pay for transportation projects. They further propose using a projected budget surplus to plug the hole in the General Fund that reallocating this revenue would create. While I have concerns about diverting the insurance premium tax and counting on surpluses that may not come, I like the general idea.

Education vs. Transportation?

The problem with diverting any money from the General Fund is that the majority of those funds go to education. If I have to choose between education and transportation, I am going to pick education without question. A majority of lawmakers in Richmond probably feel the same way because excellence in education is good for students, parents, and businesses.

Employers do not like a poor transportation network. But, they will leave the state because of bad schools long before they leave over bad roads.

They know that good schools produce trained and trainable employees and that communities with good schools for their kids will attract workers.

The idea of depending on revenue surpluses to plug a hole in the General Fund also will not work. Budget surpluses come and go because of varying economic conditions which are not often predictable. That is what hurt Governor Gilmore's ambitious spending plans for the car tax cut and new transportation funding.

Good Beginning

Yet, the idea of funding major construction projects with new money is a good beginning and the idea needs to be perfected. I think that it is a positive sign that both moderate and anti-tax Republicans from Northern Virginia support this idea. That should make it more palatable to downstate anti-tax GOP members who dominate the House.

The lack of transportation funding was the major deficiency in the tax and budget package the General Assembly passed this spring. Transportation was initially in the Senate version of the plan, but they dropped it during negotiations with the House. The idea of selling bonds paid off over a 20 to 30 years period makes since for transportation projects because they have the same long term lifecycle.

But, the bonds need to be repaid from a dedicated source of revenue which does not hurt other priority programs, such as education. We also have a self-imposed cap on bonded debt in Virginia that allows us to maintain our triple-A bond rating.

New bonds push up against this cap unless a new dedicated source of funding can be found because the new revenue has the effect of raising the bond cap.

No one will know the outcome of any of these proposals until after the General Assembly adjourns at the end of February. But, the debate about this will ensure that transportation funding will take top billing when we convene on January 12.

Delegate Bob Hull may be emailed at del_hull@house.state.va.us