McDonnell "Plan" Is "Borrow and Spend," Plus "Smoke And Mirrors"

by: Elaine in Roanoke

Thu Sep 24, 2009 at 09:27:13 AM EDT

I want to take a close look at what McDonnell has proposed and show that the Post is absolutely correct.

Let's parse that "transportation plan" Bob McDonnell has posted on his website a bit more.  Heading his ideas for funding is borrowing through bond issues...to the tune of $4 billion by the time "the economy recovers." McDonnell's plan for paying back all that money, plus interest?

"Bob McDonnell will find a suitable additional revenue stream to pay debt service if the existing insurance premium taxes are insufficient." What is that "suitable revenue stream"? He doesn't say, but he is sure it won't include any statewide increases in taxes.

While McDonnell is borrowing all that money, he also assures us that "every effort will be made to accelerate the annual issuance of the bonds without jeopardizing our triple A bond rating." Sure. I get it. Using that reasoning, I can tell the credit agencies that determine my personal credit rating that I will find a "new revenue stream" after the economy recovers to maintain my rating, even though I have opened four new credit cards and plan on charging the maximum on each one. They won't change my credit rating, right? After all, I promise to find a new source of income, without knowing where that income will come from.

Hey, this "borrow and spend, smoke and mirrors," that McDonnell advocates is easy. I can throw economic facts out the window and pretend the facts don't exist. So, let's continue looking at Bob's way of avoiding paying for what we need.

Let's see. If the population is growing (it is) and if the Great Recession has meant that state police, school systems, higher education institutions, etc., have lost funds that they need to maintain the level of services we already have, regardless of that population growth, McDonnell wants to take revenue that would bring them back to the base line they had before the downturn and use it for roads. A stupid idea that will never pass the General Assembly.

Then, there's his specious "plan" to use funds generated by the port of Virginia. Note well his qualifying statement: "Although we are not currently experiencing significant growth, there is general consensus that this facility will generate growth in the coming years." Once again, McDonnell gets out the "smoke and mirrors" to avoid actually paying for transportation needs.

Next, we can look at the tolls McDonnell proposes for I-95 and I-85 coming north from North Carolina into Virginia. First, such action will require Congress to approve it. The Federal government frowns on tolls being used for interstates built primarily with Federal taxes. Here's what the Federal Highway Administration has to say about tolls on Interstates:

"The Interstate System is free of tolls for the most part, but tolls are collected on some segments.  Most major toll roads were planned or built before the Congress authorized significant amounts of Federal funding for the Interstate highway program.  These segments were built by toll authorities created by State or local legislation to issue bonds as a way of financing construction.   Toll revenue is used to retire bonds and cover operating and maintenance expenses."

Here is a specific example of how the system works. When I lived in Connecticut many years ago, the Connecticut Turnpike (I-95) was tolled because it had been built mainly with state funds. However, since the state's debt has been paid off and a dedicated maintenance fund now exists, that highway no longer has tolls.

To follow through with his plan for tolls, McDonnell will have to convince Congress to allow it. Plus, that particular revenue stream will have to be dedicated to those two interstates. It won't solve most of the problems in Hampton Roads.

The next one of McDonnell's "12 f@#$ing funding mechanisms" is directed to NoVa. There,  McDonnell proposes to steal from sales taxes to the tune of $105 million to fund road projects. He believes that those funds drained from the general fund will solve the problems. He also returns to his nebulous "certain revenues":

"Bob McDonnell will establish accounts within VDOT which capture certain revenues generated within that region for specific transportation projects located there." He, of course, doesn't spell out what those "certain revenues" are, other that to repeat stuff about tolls and port revenue.

I could go on and on, but I have earlier written about McDonnell's ridiculous bet on oil and gas leases and revenues, plus his expectation that a one-time shot of revenue from selling off ABC stores (which itself would negatively impact the General Fund), will solve the Commonwealth's transportation crisis.

So, I guess I agree with Bob McDonnell. He has outlined "12 f@#&ing funding mechanisms"...with real emphasis on the first adjective in that phrase. And the recipients of the "f@#&ing"? The citizens of Virginia, if this guy gets elected.