Statehouse beat: A new round of road debt
CHARLESTON, W.Va. -- As the governor's Blue Ribbon Commission on Highways tries to finalize proposals to come up with about $600 million a year additional funding for the state Road Fund -- or about a 60 percent increase over current funding -- one proposal may be to float a new round of road bonds.
(In 2012, Transportation Secretary Paul Mattox pitched a $1 billion road bond amendment to the Legislature, and it went over like a lead balloon.)
Coincidentally, the Treasurer's Office just put out the latest Debt Position report, showing bonded indebtedness for all state agencies as of June 30.
Total bond debt: $7.81 billion, or the equivalent of not quite two years' worth of total state tax collections.
Currently, Transportation has a total of about $322.34 million of outstanding road bond debt on the books.
Meanwhile, the Economic Development Authority has a lot of outstanding bond debt, the largest being $480 million for Capitol Cement Corp. in Martinsburg. It also has about $207 million outstanding for Quad Graphics, $147.9 million for the Macy's distribution center, and $125 million for the Gestamp plant in South Charleston.
Speaking of the Road Fund, lobbyist Dave McMahon has run some numbers on why he thinks (his personal opinion; not the official position of Mountain State Justice) that the state's 5 percent privilege tax on vehicle purchases is a bad way to fund state roads -- since it ends up being a double tax for most consumers, with most buyers rolling the privilege tax into the cost of financing the vehicle.
Using the example of a 60-month loan on a $25,000 car at 4 percent interest, the privilege tax not only adds $1,250 to the cost of the car, but raises the monthly payment from $460.41 to $483.43.
That increases the total cost of the loan from $27,629 to $29,006, McMahon notes, so the car buyer in question is effectively paying an additional $1,381 "tax" on the original $1,250, so the 5 percent tax becomes 10 percent.
That additional $1,381 does nothing to improve state roads, since it goes in the pocket of the bank or finance company.
Lobbyists dislike monthly legislative interim meetings, and not just because they have to go to boring meetings, but because they are generally accompanied by fundraising receptions in the evenings, as was the case last Monday when Delegate Randy Swartzmiller, D-Hancock, kicked off the 2014 fundraising season with a reception at the Vandalia Grille.
Upcoming fundraisers on the Democratic Legislative Council calendar include: Delegate Barbara Fleischauer, D-Monongalia, Sept. 18; House Health and Human Resources Chairman Don Perdue, D-Wayne, Sept. 23 (during September interims); Majority Whip Mike Caputo, D-Marion, and Delegate Tiffany Lawrence, D-Jefferson, both on Oct. 21 during October interims. (Lawrence's event is also at the Vandalia Grille.) New House Finance Chairman Brent Boggs, D-Braxton, will have a fundraiser Nov. 19, during November interims.
Finally, back from vacation, auto dealers lobbyist Ruth Lemmon called to say a final-hours amendment inserted to the Marcellus Gas and Manufacturers Development Act that created a $100 million tax break for buyers of alternative fuel and flex-fuel vehicles was not her doing.
Lemmon said she didn't think anything of the bill or the amendment until some time after its passage, when she started getting calls from accountants who had been apprised of the tax credit during some sort of conference or meeting.
"Accountants were the ones who found it," she said of the credit, worth up to $7,500 against personal income taxes.
Lemmon said she did oppose repealing the credit retroactively to Dec. 31, 2012, saying she thought it bad public policy for the Legislature to act retroactively.
(However, the Legislature does it frequently with pay raises, including a 2008 increase in their own per-diem payments that was retroactive to the start of the session, and this year's pay raise for magistrates in small-population counties that was retroactive to Jan. 1.)
The failure to make the tax-credit repeal retroactive contributed to the last-minute surge of flex-fuel vehicle purchases prior to the publicized April 14 repeal date.
Regarding last week's item that legislators attending out-of-state conferences (such as this month's National Conference of State Legislatures' Legislative Summit in Atlanta) should be required to submit reports summarizing what they'd learned at the meetings, Delegate Gary Howell, R-Mineral, told me when he goes to conferences, he makes a point to attend every meeting he can.
While some legislators are equally diligent, Howell said it burns him up to go to these conferences and see certain colleagues only at receptions and social events. (He didn't name names.)
Finally, speaking of legislative travel, studying North Dakota's Future Fund as a possible model for West Virginia re: any tax windfalls from Marcellus Shale drilling is certainly a worthwhile endeavor.
However, did we really need to send 19 legislators to Bismarck for a one-day briefing on how the fund works? Wouldn't it have been easier (and cheaper) to fly three or four representatives of the Fund here?
Reach Phil Kabler at email@example.com or 304-348-1220.