Sunday, February 26, 2006

NOVA's "Let's Tax Ourselves Silly Plan" Shot Down

It's not often that I agree with an Editorial in The Roanoke Times. But today I do, well, sorta...

It seems some folks in NOVA wanted to increase their own sales tax rate by a quarter percent in order to fund their share of the subsidy to the bus and rail transit system known as WMATA or more commonly simply Metro.

I'm not a fan of such rail and bus systems (for reasons I'll get into later) but if the folks who live there want to increase their own taxes on it's behalf, and the Virginia Senate passes a bill that allows just that, I say knock yourselves out guys.

Now we see that a few Delegates on a House Finance subcommittee have sunk that plan. I have to admit I know little of how this subsidy is typically funded, but I would not be too surprised to learn that at least a portion of it comes from either the General Fund, or fuel taxes, or car and truck sales taxes paid by all Virginians.

This brings me to the fact mentioned above, why I am not a fan of subsidized public transportation. Simply by design, such systems tend to be wasteful. Not necessarily wasteful of natural resources, in that regard they may actually be beneficial. Instead, I mean they tend to be wasteful of financial resources. I'm no accountant, but I have owned a business or two. I knew then that if my revenues did not cover my operating expenses I would not last long in the marketplace.

Systems designed along Socialist lines such as Metro enter the game with it's management knowing up front that revenues do not have (actually are not even expected) to equal or exceed operating costs. This immediately removes any incentive to streamline operations or any attempt to maximize efficiency. A look at the Fiscal Year '05 Subsidy Budget shows that on total costs of $51,697,000 Metro received revenues of $4,000,000. All of 7.74% of Metro's operating funds for 2005 came in the form of fares paid by riders. Are we to believe that something better than 8% efficiency is impossible to achieve? Your roughly $3.00 Metro Rail fair that you pay on Monday morning to ride in from Tyson's Corner cost someone else $38.75. Unlike the Roanoke Times, I would hardly call that "An overwhelmingly successful public transportation system..."

This brings up another interesting bit I discovered during this quest. The Subsidy Budget for 2005 calls for considerably less than 8 million dollars to be provided by or on behalf of NOVA, yet the Roanoke Times Editorial quotes a current budget number of 150 million??? Metro must be fantastically successful if it can increase it's budget by such a huge margin in only one year.

Jerry has this on the subject.

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