Let me get this straight: if the abuser fees are about safety and everyone obeys the law (ha!) then the amount collected for transportation in Virginia will be, well, nil. There goes $65 million of the anticipated dollars for transportation.
Earlier this year, we were told to expect a downturn in state revenues. Estimates were that the revenues could be as much as $300 million short. Now we learn that GAO is estimating that states and localities are facing tremendous deficits over the next decade.
State and local governments will either have to raise taxes by 17 percent or cut spending by 14 percent if they want their operating budgets to remain in balance over the next decade.
[…]
The GAO’s projections, which assume continuation of present-day policies, show that structural deficits will pull spending and revenue out of whack by 2017 and grow progressively more dire after that.
OK, so somebody explain to me one more time how it is that we intend to allocate 50% of the general fund surplus when there won’t be a surplus? How in the heck are we going to even pay the debt service??
Surely the folks who put together this plan had to know that this was coming. Relying on unreliable sources of revenues is ridiculous.
I understand why the Republicans did it. I even understand why Governor Kaine signed it, even if I didn’t agree with him at the time (and still don’t agree with him). But we’re here now. What are we going to do about it?
I guess there’s really only one answer: 21/51.
VIVIAN J. PAIGE | All Politics is Local 
Do you know why we have economists, Vivian?
It’s to make the weather forcasters look good.
Anon E. Mouse – Good joke!
vjp – Most predictions are just extrapolations of present trends. How do we know that a current trend will continue? We don’t.
So experts try to improve their predictions by trying to considering those factors they anticipate will change current trends. For example, the Baby Boomers are getting older. How do we expect that fact to change tax revenues? Will older Baby Boomers earn less and pay less in taxes. Maybe. How much less? We do not know, but the experts can make an “educated” guess.
Such speculation is the sort of thing we should not entrust to our politicians. When politicians see a budget forecast they don’t like, they raise taxes. When politicians see a budget forecast they do like, they increase spending. Regardless of budget forecasts, politicians spend every cent they can.
When people are risking money, it should be their own money. When people risk their own money, they are a bit more careful about their predictions.
So how do we transfer speculative risk from government to the private market. The traditional solution is user fees and bonds.
There are, of course, occasions when government must provide a public service. However, our politicians do not have to make the final decision. Instead, they can propose a project, sell bonds to finance it, and pay off the bonds with user fees. Unless enough people think the project makes sense, the bonds will not be sole at a reasonable price.