Special Session II— — 2008— — Your Legislators came to Richmond, Heard the Governor, Discussed, Disagreed, Did Some Partisan Posturing and Recessed.

The Hon. A. R. “Pete” Giesen, Jr.

Monday, June 30, 2008

As noted in the GP of June 19, 2008, the Governor summoned the legislators back to Richmond for the June 23 start of the “Transportation Special Session (SS II) of 2008.”  In his view, he had laid the foundation for what he hoped would be a “solution finding session.”  Somehow it seems he hadn’t read the right tea leaves.  

The four day session easily revealed the lack of consensus within the ranks of any of the five groups dealing with the transportation issue.  The five groups determined by this writer are: the Governor and the administration, the House Democrats, the House Republicans, the Senate Democrats, and the Senate Republicans.  Oh yes, there are certain segments of the public that support each of these groups in the midst of the decision making process, but they don’t have a vote!  

The Governor presented his plan described in the last GP.  He had touted his plan statewide for almost three weeks with what now appears to have been minimal results. Some of the House Democratic minority reluctantly endorsed Kaine’s plan.  None of those who one might consider to be part of the “Governor’s supporters” in the State Senate (that is, members of the Democrat majority caucus) would patron the Governor’s bill.  So this group decided to introduce their own version of a “transportation fix” — a gasoline tax increase of one cent per year for six successive years.  Some have speculated that the Majority Leader, Senator Dick Saslaw from Fairfax County, influenced members of “his caucus” to endorse his bill rather than that of the Governor.  

In the meantime, there were numerous bills introduced by members of the House Republican Majority group with various ideas primarily to help “fix” the transportation crisis in the two hardest hit portions of the state — Northern Virginia and Hampton Roads.  There were also a number of ideas expressed in the Senate by members of both the Republican minority and of the independent thinking members of the Democratic majority.  So there were all kinds of “discussions” in public committee meetings, in private office meetings, and in semi-private “hall meetings.”  

The vast majority of these ideas from the fertile minds of various legislators became “bills” filed the first couple of days of SS II.  Of course, each legislator felt his or her idea was the “real solution” to the problems of Virginia’s transportation system.

Realistically, there were maybe three of options that were really in play during the session.  The Governor’s plan, introduced as HB 6026 by House Minority Leader, Delegate Ward Armstrong, D-Martinsville, the gasoline tax increase bill of Senate Majority Leader, Senator Dick Saslaw, D-Fairfax., and HB 6055 by Phil Hamilton, Ro-Hampton, which combined a number of bills introduced to “correct” the regional concepts of the 2007 transportation act (HB 3202) which the State Supreme Court declared unconstitutional.  

 

In the House, The Speaker used the rules instituted for the first time at the beginning of the regular session of 2008 to send all three of these bills to the House Rules Committee.  The Rules Committee members, (dominated by Republicans and a couple Democrat members beholding to The Speaker), under this new and very unusual rule, are allowed to consider a bill referred to them and PBI it (pass by indefinitely — kill it!), report it to the floor “without recommendation,” or report it to the floor in the normal method, with a majority vote indicating the support of the a majority of the committee members.  Only the Rules Committee can “report without recommendation.”  Isn’t that an interesting situation?

All of the “in play bills” received this treatment from The Speaker.  First, 

HB 6026 was sent to the Rules Committee and its Chair, The Speaker, of course, allowed a full hearing on the Governor’s Plan.  The outcome was predetermined since the Republican Leadership (most of whom serve on the committee) had almost to a person expressed their dissatisfaction with the bill and its tax increases.  Delegate Armstrong and the Governor’s Secretary of Transportation, Pierce Homer, presented the bill calmly and then according to one print media reporter “got hammered by hostile questions!”

The Republican members of the Committee had been well scripted.  They questioned the competency of the Virginia Department of Transportation, the contention by the Governor that there is a crisis in the Maintenance and Operation Fund of the highway system, the statements of the administration that (1) raising the grantors tax wouldn’t impact the housing industry and (2) raising the sales tax on vehicles wouldn’t influence the sales of automobiles.

Some of the capitol observers felt HB 6026 might receive 6 positive votes from the Democrat members of the Committee.  In fact, the motion to PBI the bill was adopted, 11-4.  Two Democrats joined the nine Republicans to put the Governor’s bill to rest. 

Second, the next day as a matter of fact, the House Rules Committee considered SB 6009, Saslaw’s bill, or actually the Senate Finance Committee’s (SFC) Substitute for SB 6009.  The SFC had incorporated some of the fertile ideas of other Senators into SB 6009 to broaden the bill.  One of these changes was to decrease the sales tax on food for home consumption from the current 2.5% to only the 2% (all of the remaining 2% goes to localities).  Now if a legislator votes against SB 6009 is he/she voting against reducing taxes or voting to increase taxes?  (The net effect, of course, is an increase in total revenue for our transportation systems.)

There was an interesting twist in the hearing before the House Rules Committee on SB 6009.  While the Republican members had given Del. Ward Armstrong and Secretary Pierce Homer a very hard time they treated Senator Dick Saslaw like a “real friend.”  After Dick’s opening comments — “From what I’ve just heard I should really be here asking for a blind fold and a cigarette!” — to the end of the hearing, the questions were totally “softballs.”  Then the committee members reported the bill to the House Floor “without recommendation.”  Of course, most everyone present realized this procedural vote was to put the House Democrat group “on the spot.”  Many Democrat Delegates have expressed their opposition to a gasoline tax increase. Does this seem like a partisan ploy to anyone?  

Upon the return from the recess of this SS II (that comes on Wednesday, July 9) the floor debate will take place and every member will have to vote-maybe.  There is always the possibility of some parliamentary action that could prevent a direct up or down vote.  Although you can be assured the House Republican Leadership will do all they can to force a recorded vote.

There will also be many amendments offered by members of both parties to this senate bill and to HB 6055 (see below).  Most will be for political reasons, hoping to put members on record with their votes.  Unfortunately, there most likely will not be many of these amendments that are designed to try and make SB 6009 acceptable to the majority.  Why such amendments could possibly, just possibly help solve the statewide transportation problem.  Heaven forbid!  Such an action might give Governor Kaine or the Senate Democratic Caucus a perceived victory and a great issue for the campaign trail.  In the meantime, of course, the citizens of the state sit in clogged traffic jams and rural drivers hit an amazing number of pot holes.  Ah, but maybe it can be solved on a regional basis!

THE REGIONAL APPROACH

At the same Thursday meeting of the Rules Committee the “regional” bill, HB 6055, introduced on Wednesday (the other “in-play” bills had been introduced on Monday, June 23) was considered.  Phil had done a good job of incorporating other bills which had been filed on Monday including parts of his original bill HB 6019 and parts of Delegate John Cosgrove’s (R-Chesapeake) HB 6020.

Briefly, HB 6055 would impose additional fees in the two regions to fund transportation activities in those regions.  The portion of the code establishing the Hampton Roads Transportation Authority would be repealed.  A Hampton Roads Transportation Revenue Fund would be set up in the Comptrollers office.  The use of revenues flowing into this fund would be determined by the existing Hampton Roads Metro Planning Organization (MPO).  

Some new fees would be imposed on residents of the Hampton Roads area (the counties of Isle of Wight, James City and York and the cities of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk and Virginia Beach).  In addition, (this is a new wrinkle) “state taxes attributable to economic activity facilitated by the ports of Hampton Roads” would be placed in this fund.  The manner of determining these “state taxes” is by a rather complicated formula based essentially on the “ports base number of cargo containers” relating to a base year.  The amount to be “contributed” to the fund in any one year “is not to exceed $250,000,000.”  In essence this is a method of putting some General Funds (GF) into the Hampton Roads transportation systems. 

The local residents would also make a contribution through an increase of $20 for each annual drivers license fee issued in the area, an increase of $20 on each vehicle inspection fee, a 2% fee on the gross proceeds on the daily rental of a vehicle (regardless of where it is registered), and a 25 cent per $100 valuation tax on deeds of land zoned for business or commercial purposes.

The bill also spells out seven major highway projects in the Hampton Roads that VDOT must request construction proposals from private firms through the Public Private Transportation Act within 90 days.  These proposals will be reviewed by a new special committee which will include legislators from the area.  This is another new approach.

For the upper part of Virginia, the bill keeps the Northern Virginia Transportation Authority as the prime player in keeping the regional concept operating.  The funding would be imposed by the bill.  The main source would be a new $100 fee for all of the initial drivers licenses issued in the area covered by NVTA (Planning District 8).  There would also be “regional congestion relief fee imposed on deeds, etc. (a recordation tax by another name?) imposed by each of the local jurisdictions.  The 2% tax on gross proceeds for vehicle rentals similar to those for Hampton Roads would also be enacted.  Authority is also given for the localities to impose an additional 2% transit occupancy tax to be put in the transportation fund.  

This legislation was also reported by the House Rules Committee “without recommendation” by a 10-5 vote.  Five Democrats voted against reporting it, including Delegate Johnny Joannou, D-Portsmouth.  Johnny usually votes with the Republicans. Frank Hall, D-Richmond voted with the majority.

Both of the bills reported by the Rules Committee were “passed by for the day” during the June 27^th session of the House.  The Senate adjourned until Wednesday, July 9.  Then on Friday, the House held “a quick session,” received the bills reported from various committees and passed them all by for the day.  So on July 9 they will have the gasoline tax bill from the Senate, the regional bill, a bill dealing with a performance audit of VDOT, a bill referring to the use of revenue from off shore drilling, and who knows what might come out of the Democrat “retreat” being held at the Homestead the weekend before the convening of the recessed SS II of 2008.

Even after all of the legislators have these eleven plus days to talk to their constituents and reflect on the state’s transportation situation, the possibility of any of the “major bills” receiving a majority vote in both houses remains very, very remote.  In fact, most legislature watchers are betting on nothing significant being done during this special transportation session.

THE NEXT POSSIBLITY

 

The media is now speculating that any solution for the transportation “problems” will have to wait for a new Governor.   Some are saying Governor Kaine has lost his leverage.  Since Virginia has a one term limit for our governors, our current governor is on the downward slope of his governorship.  The results of Governor Kaine’s “town meetings” indicate that the legislators are not paying a whole lot of attention to the suggestions or recommendations of this Governor.

During the first four days of SS II the partisanship has been much more evident and the accusations much sharper than they were during the regular session.   With this observation one has to realize the partisan divide was already rather deep after the 2007 elections.   Even the “moderate Republicans in the Senate” became more partisan and gave a much more conservative posture than they had in 2004-2007.  

The shadows of the 2007 election still hang heavy over the Republican Senators heads.  In particular, they refer to the “Marty” Williams factor.  Remember, he was taken out by an ultra-right Republican in the primary who was then beaten by a Democrat.

So most of the Senate Republicans are “keeping their heads down” and voting against tax increases for transportation, even though they supported similar legislation in 2004.

The Republican Senate Floor Leader, Tommy Norment, R-Williamsburg, did make an astute observation during the floor debate on SB 6009.  He noted the bill, with its gasoline tax increase, would receive very harsh treatment on the House side of the Capitol.   He then stressed he could not believe the General Assembly had been called into special session by the Governor when there was absolutely no consensus on how to solve the transportation issues.

LEARNING FROM HISTORY

When I read the articles about Senator Tommy Norment’s comments some historical events came to mind.  First was Governor Mills Godwin’s ability to achieve a “consensus” for the passage of the sales tax and the beginning of the Community College system.  He accomplished the first in the first session of his first term as Governor.  Mills came into office in 1966 being the first Governor in Virginia’s history to be elected WITHOUT a majority of the votes cast for Governor in 1965.  

Between the election in 1965 and his inauguration in 1966 the Governor, working with the outgoing Governor, gained a consensus among the General Assembly leadership in favor of enacting a general statewide sales tax.  Granted, the large majority of the members of both houses were of the Governor’s party, that is to say Democrats.  However, many—in fact a majority--of them were from the “pay as you go,” ultra conservative wing of the party.  In fact, the large majority of them had been voting against the sales tax bill introduced every two years by Delegate Sam Pope from Southampton County for almost a decade.  

Using the leverage of local officials, (some of whom had already adopted a local sales tax and most of whom were very anxious for additional revenue), educators (with the promise of increased teachers pay), business people (many of whom wanted a community college system in the state), and the financial community the Governor gained major support for a balanced sales tax bill before he officially moved into the Governor’s office.  (The legislation was “balanced” in that 1% of the tax went to localities based on a formula, 1% into the state revenue stream, and the third cent would automatically come into being in 1968, and incidentally double the state’s take.  An additional 1% could be raised by each locality by action of the local governing body with the revenue remaining in the locality.)  

So “Sales Tax Sam” achieved his goal of being the chief patron of a sales tax bill that passed the assembly and was signed into law by the Governor.  Of course, it did help that another member of the old “Conservative Byrd Machine,” Delegate John Warren Cooke, D-Matthews County, chairman of the House Finance Committee, was one of the co-patrons of the bill and the main spokesperson for its passage. 

Another side light about this significant event and change in direction for the “Old Dominion,” was the way in which Governor Mills Godwin opened his first speech to the General Assembly.  Immediately after his obligatory introductory comments (his memories of being in the House and the Senate and praise for all of his friends and colleagues and particularly for “one of Virginia’s finest governors, Albertis S. Harrison, Jr.,) Godwin stressed, “… he (Governor Harrison) is particularly mindful of the tremendous needs of our cities and towns and counties, especially in the field of public education.  In this I fully concur.

“Gently, but firmly, he has reminded you of a continuing shortage of highway funds, and that the longer we wait to build them, the higher costs of construction will be.  I am in complete agreement.

“His budgetary recommendations in the field of higher education are a clear recognition of need, but just as clearly he has indicated that still more must be done.  Again I agree.”

After that Godwin’s first major point was the need for a general state sales tax.  The next three pages of his speech laid out the needs and his plan for the “general retail state sales tax” to meet those needs at the local and state levels. While there were some twists and turns along the legislative path for this legislation, the consensus for the need for the general state retail sales tax was firmly established before the General Assembly Session actually began.

Governor Gerald Baliles, a score of years later, took a slightly different path but with an almost equally successful outcome.  He told the legislators up front that he saw a need in both the transportation and the education systems of the Commonwealth.  He dealt with the education problems in the regular session of the GA immediately after he took office in 1986.   

He then secured the GA’s authority to appoint a “blue ribbon commission to study the transportation needs of the state and recommend solutions.”  The “Special Transportation Commission” met, gave a hard study to the conditions of the highways and the needs of other forms of transportation (airports, sea ports, mass transit) and made recommendations including the need for new funds.  Their solution, an extra 1% on the state’s share of the general retail sales and use tax dedicated to transportation systems with some other increases for car and truck vehicle licenses.

With this report in the hands of every legislator, the Governor did as he had promised in January.  He called the General Assembly to return to Richmond in a special transportation session.  He set the date in mid September of 1986 when the heat of summer had passed and pleasant fall weather was upon us.  (Some people believe the weather conditions do have an impact on people’s attitudes!)  In between the issuance of the Commission’s report and the special session he met frequently with the legislative leadership sizing up which parts of the report would gain the support of the majority of the legislators.

Jerry knew the players very well.  He had served in the GA with most of them (as had Godwin in his day) and many had called on him when he was the state’s Attorney General.  He was able to get their attention and their consensus on most of the proposals.  The Senate did cut his request for a 1% increase in the sales tax to only one-half of one percent, but this new source of funding, plus the increases in more traditional dedicated transportation taxes and fees, was a significant infusion of funds for transportation.  Twenty-two years later it is still the last major increase in revenue to keep our transportation systems up to acceptable standards. 

Governor Baliles approach also gave him an “excuse” to do what he had strongly stated he would not do during the 1985 election campaign, raise taxes.  Now isn’t that an unusual situation?  A CEO of an organization receives new information and changes his mind on an issue facing his company, in this case the Commonwealth of Virginia!

In both of the examples noted, the state’s chief executive used his office, early in his tenure as Governor, to gain a consensus prior to putting his “controversial” program “on the legislative table.”  Yes, the playing field has changed considerably since the 1960s and 1980s, but the premise that good pre-planning, good communications, and good strategy can accomplish a lot even with a divided legislature seems to stand the test of time.  If my memory serves me correctly—remember I am over 46--there have been Presidents who have achieved their objectives even with a congress controlled by the opposite party.  Shouldn’t we be able to do likewise at the state level?