Distinguished Members of the General Assembly:

My name is Arthur Purves. I address you as president of the Fairfax County Taxpayers Alliance.

The major roadblock to transportation funding is the Virginia Education Association.

During last year's General Assembly session, the House of Delegates had proposed increasing transportation spending with $1 billion from the General Fund. The Senate, however, forced the House to reduce the increase from $1 billion to $650 million. The Senate also forced the House to agree that $339 million of that increase would not be spent unless a special session allocated the funds. That legislation did not happen, so the Senate effectively blocked a $700 million increase in transportation funding, most of which would have come from the $1.4 billion General Fund surplus.

Why did the Senate block a $700-million General-Fund increase in transportation spending?

Most General Fund revenue comes from income and most of the sales tax as well as lottery and ABC profits. Traditionally fifty percent of General Fund revenues goes to education, and another 25 percent to welfare and courts and prisons. Only one percent of General Fund revenues goes to transportation. Transportation is traditionally funded from the Non-General Fund, whose revenues come from taxes and fees earmarked for specific purposes. Taxes and fees earmarked for transportation include gasoline taxes, car registration and licensing fees, and sales taxes on cars. Historically, General Fund revenues, which increase with income, have increased much faster than transportation revenues, which are largely based on gasoline taxes that do not increase with gasoline prices.

The result is a structural imbalance in which public schools dominate the fast-growing income and sales tax revenues while transportation is stuck with stagnant gasoline tax revenues. So while funding for new transportation construction is drying up, inflation-adjusted public-school spending in Virginia has been increasing ten times faster than enrollment. Public school staff has been increasing seven times faster than enrollment. Despite this, education outcomes are mediocre. According to the National Assessment of Education Progress, about 65 percent of Virginia school children achieve below grade level. No amount of taxes can fix schools that are anti-phonics and think that hand calculators make computational skills unnecessary.

The General Assembly's debates on transportation are a turf war in which the Virginia Education Association and its allies in the Senate try to keep transportation out of the General Fund. They do not want funding for state-mandated elementary school guidance counselors to have to compete with widening and repairing interstate highways. The transportation solution is to end the structural imbalance between fast-growing education taxes and stagnant transportation taxes. That means letting transportation compete with ineffective school programs for state income taxes and all of state sales taxes. Higher taxes would only reward mismanagement.

Thank you.

Updated January 14, 2007