I find myself torn. On the one hand, Republican Gov. Bob McDonnell has generally managed to keep Virginia’s head on straight in most matters fiscal and economic since he was elected in 2010, but on the other, this whole thing seems mighty convoluted for what is absotively, posilutely not supposed to be a tax increase.
This is Virginia’s gubernatorial election year, and the commonwealth’s governors can’t run for two consecutive terms (love that rule), and McDonnell has been trying to get legislature to agree on some comprehensive funding changes for what are admittedly Virginia’s tricky and demanding transportation expenses (Beltway congestion? Virginia Beach traffic? Shudder) as a grand hallmark of his tenure.
Here’s what happened over the weekend, via Reuters:
Virginia’s Legislature approved on Saturday an overhaul of its transportation funding system, moving the state away from a reliance on gasoline taxes to fix its roads and highways.
The bill providing $880 million a year for transportation passed on the last day of the state’s legislative session and is now headed to Governor Bob McDonnell to sign.
The legislation includes McDonnell’s proposal to scrap the state’s 17.5 cent-per-gallon gasoline tax charged at the pump. It also creates a tax on wholesale gasoline and diesel, raises the sales tax, draws $200 million from the state’s general fund and charges a registration fee for hybrid, electric and alternative-fuel vehicles. …
The final bill was a pretty giant compromise from McDonnell’s original proposal, and there’s no dearth of opinion on how the legislation will play out in practice. Jennifer Rubin at WaPo argues that the historic bill was a big victory for McDonnell’s prospects, present and future:
McDonnell thus ends the last legislative session of his tenure. In his statement he recounted, “Over the past three years, we have cut spending, audited and reformed VDOT, authorized new bonds, used surpluses, issued new public-private partnerships for toll roads, created the Virginia Transportation Infrastructure Bank, and dedicated two-thirds of all undesignated surplus funds to transportation. We have used every tool provided by law to leverage scarce dollars. Yet those actions were not sufficient to meet the mobility, economic development, and quality of life needs of the people of Virginia. Today, we fixed the problem.” Purists won’t like any tax increase; McDonnell, however, is content in knowing his pragmatic conservatism produced one of the most successful legacies of any governor in recent memory. Together with his education reform bill he will end on a high note.
But Erick Erickson at RedState was less impressed, arguing that the whole hot mess was nothing but a big ol’ cave to big-government spending masqeurading as “leadership”:
Bob McDonnell was getting all kinds of praise on the Sunday shows for his big transportation tax hike, which passed the Virginia legislature this week. He was getting praise from big government liberals like Tim Kaine and Terry McAuliffe and Martin O’Malley for his evenhandedness, his leadership, not like those troublesome conservatives in Washington who refuse to wheel and deal.
That should tell you all you need to know about the transportation tax hike McDonnell pushed through. But it’s a whole lot worse than that when you look at what really went down. …
The initial McDonnell package amounted to a $2.4 billion tax increase over five years. By the time the Virginia legislature was done with it, it had exploded into a $6.1 billion increase. …
People like McDonnell say this is about evenhanded “problem solving”. But really it’s about the fact that they think conservatives are too stupid for there to be any negative consequences for breaking their promises – on taxes, on Obamacare, on anything. There will always be someone more liberal than a guy like McDonnell, so he doesn’t have anything to worry about. He has just shown us how fake he is, and he’s convinced he can continue to fake people out because they’re too dumb to keep track of it all.
And the WSJ thinks that the finagling McDonnell did with the Democrats, on allowing for a bicameral commission to decide whether Virginia will proceed with ObamaCare’s proffered Medicaid expansion, is going to be a tough one to forgive:
Mr. McDonnell claims that “with this bill gas prices will be reduced” because he’s eliminated the 17.5 cents a gallon gas tax. Yet he’s replaced it with a more hidden 3.5% tax on the wholesale price of gas. With wholesale prices nearing $4 a gallon, this is a 14 cents a gallon tax. This new levy will automatically rise with inflation and oil price spikes, which means over time the McDonnell gas tax “cut” may be an increase. …
Mr. McDonnell even cut an 11th-hour deal with Democrats over the expansion of Medicaid under ObamaCare. …
[T]o secure Democratic votes on his tax increase, he agreed to let a bicameral commission decide if the state will expand Medicaid. He agreed even though his attorney general, Ken Cuccinelli, issued an opinion that this is an unconstitutional delegation of authority. Mr. McDonnell says the commission means Virginia won’t expand Medicaid as long as Republicans control the legislature, but wait until the hospital lobby gets done working the same Republicans who raised taxes.
Senator Chap Petersen, a Democrat, aptly described the final deal as “a grotesque combination of tax cuts, tax rebates, tax increases, new taxes, old taxes which are phased out (and then reappear elsewhere), regional alliances . . . special projects, and exceptions to all of the above.” …
I’d have to second that — the legislature might be mostly Republican, but why would Democrats have agreed to such a thing if they didn’t think the Medicaid expansion had any kind of shot?
Also, McDonnell’s heir apparent for the GOP gubernatorial nomination, Attorney General Ken Cuccinelli, was not on board with the way this all went down — that could make campaign season a little awkward, no?