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Using Tax Revenue to Pay Bonuses for Private Road Developers
Dear
Concerned Citizen,
HB 1395 was introduced a little over a week ago at the request of the Governor. This last-minute bill would give the Secretary of Transportation the power to hand out "performance payments" to private developers based on claimed growth in tax revenues attributed to a transportation project. These payments would be over and above the cost of building the infrastructure, and would be paid for with tax dollars that would normally fund core services, such as education and public safety.
While the intended effect may be to encourage increased private financing for transportation projects, this is not the right way to do it. The bill doesn't provide any criteria for judging what growth is considered attributable to a specific project and sets no limits on the payment amount, rate of return, or timeline by which the private developer is paid.
This giveaway to private developers will be voted on this week.
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HB 1395 is the wrong way to encourage transportation fixes.
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Details Worked Out Behind Closed Doors
The bill directs payments be awarded to developers based on the projected growth in state tax revenues attributable to economic activity "generated by, facilitated by, or resulting from" a given transportation project.
And here's where it gets sticky. The relevant state tax revenues can include revenues from, among other things:
"(iv) the production of goods or services at business locations within a geographical area surrounding or adjacent to the transportation facility; and (v) multiplier or spin-off economic activity relating to the development of the transportation facility including, but not limited to, wages, salaries, and contract payments paid to multiplier or spin-off jobs."
Who will judge what counts? The legislation provides no guidance or criteria on how to determine the impact of a transportation project on economic activity. Nor does it limit the number of years that bonus payments can made; conceivably, the payments could continue indefinitely.
Bottom line: A handful of politicians would get to sign off on deals that award public revenues as bonus payments to private developers.
Bill Moving Quickly: House Vote Expected Tomorrow, Senate Vote this Week
HB 1395 is the reincarnation of a bill that was killed earlier this Session by the Senate Finance Committee, SB 181. The Governor was able to introduce this slightly modified version on February 25th using executive privilege. There are only five days before the General Assembly Session ends, so whatever happens, it's happening fast.
Please take a minute to Contact your Delegate & Senator today!
Sincerely,
Dan Holmes
Director of State Policy
Piedmont Environmental Council
pecnews@pecva.org
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