Archive for November, 2011

How will Kentucky fund its roads in a greener future?

[The Kentucky Gazette published this article in September and broke the story on Kentuckians for Better Transportation's alternative fuel tax proposal. It is republished with permission.]

By Randy Patrick for The Kentucky Gazette

While the recession has hit state governments hard, Kentucky’s road fund is flush with cash.

One reason is that 31 years ago, lawmakers had the foresight to tie the gas tax  to the wholesale price of petroleum fuels.

Kentucky's highways are expensive to build, maintain and patrol. They are funded by fuel taxes, but across the country, fuel consumption is falling.

When gasoline and diesel costs rise, as they have in recent years, so does the tax rate, without legislators having to vote on it.

This summer, the tax increased by 1.9 cents a gallon, to 27.8 cents, which would be expected to generate about $57 million in new revenue.

So why are transportation experts anxious about the future of funding for road improvements?

It isn’t because gas and diesel prices are going to fall; it’s because use of those fuels is already falling.

 Diminishing returns

According to the state Revenue Cabinet, in April 2010, nearly 190 million taxable gallons of fuel were sold in Kentucky. In April of this year, that figure was down below 180 million gallons. Since 2007, there has been some fluctuation, but the trend has been downward.

As cars become more fuel-efficient and consumers begin to change to cheaper and cleaner fuels, income from the gas tax is expected to decline while traffic increases.

That poses a big challenge for transportation planners.

“The status quo isn’t broken, but it’s damaged … and we’ve got to find a way where everybody pays their fair share,” said Stan Lampe, president of Kentuckians for Better Transportation.

KBT, an association of engineers, local officials, road material suppliers and others, this summer came up with a proposal to charge a flat excise fee, at the time of registration, for owners of cars that rely mostly on energy sources other than gas or diesel. Its board approved it on Sept. 16.

Chuck Wolfe, spokesman for the Kentucky Transportation Cabinet, didn’t know about KBT’s proposal, but likes the idea of a fair and easy way of paying for highway improvements — which is what the gas tax is, he said.

“We have a revenue model that has served us well for many years, and it really is a model of simplicity,” he said. “The more you use, the more you pay to maintain and build roads and bridges. It’s a classic user fee.”

In fiscal year 2010, the motor fuels tax accounted for 54.36 percent of total road fund receipts of $1,205,570, 266. The motor vehicle usage fee provided most of the rest, 27.6 percent. Mostly because of a 5.3 percent increase in receipts from the fuel tax, the road fund grew by 1.1 percent between FY 2009 and FY 2010.

But nationally, the revenue trend for the federal fuel tax and most state gas taxes has been downward as a result of greater efficiency, an increase in the number of hybrids, and the fact that the federal and most state gas taxes aren’t indexed to prices.

Between 2000 and 2010, fuel revenues in the United States decreased by 20 percent, but the number of vehicles increased by 13 percent, and the number of miles driven rose by 7 percent, according to KBT, based on a Gannett study.

That has Kentucky officials keeping a wary eye on what’s happening.

 Wait and see

Whether a different revenue model is needed for transportation funding is currently a subject of much discussion, not only in government, but also within transportation-related industries, Wolfe said in a prepared statement. But for the “foreseeable future,” he said, the user-fee system is what the state will rely on.

“We work within the law as it exists,” he said.

Whether the law changes in 2012 is anybody’s guess.

“The cabinet is not to the point of proposing any specific alternative,” Wolfe said. “But it’s something that’s getting more notice.”

Wolfe said he doesn’t expect any alternative vehicle tax legislation from the executive branch in the 2012 session of the General Assembly and hasn’t heard of any proposed bills from lawmakers.

 Fueling concern

Some legislators, however, are keenly interested in the issue.

State Sen. Jimmy Higdon, R-Lebanon, a member of the Senate Transportation Committee, is one who has been raising the question to his colleagues.

“It’s a legitimate concern,” he said, and one that has come up in some meetings.

Vehicles that run on petroleum-based fuels are 20th century technology. Governments must prepare for new technologies that will replace gasoline-fueled cars and trucks.

Higdon recalled one meeting at which Transportation Secretary Mike Hancock responded to him by saying that the state was waiting on guidance from the federal government.

The senator responded that “if we’re going to do something … let’s look at it and start talking about what we’re going to do rather than waiting until every vehicle on the road is using an alternative fuel … .”

“It isn’t going to happen right away,” he said, but it is the responsibility of legislators and transportation officials to have a dialogue about it, watch what other states are doing, and be ready when the time comes.

Higdon understands the reluctance of lawmakers to discuss it.

“I’m not one for raising taxes. That’s sometimes an ugly word. But I think we have to have a reliable source of income” to maintain highways and build new ones, he said.

For the past several years, said Higdon, the goal of the Transportation Cabinet has been to do about a billion dollars a year in construction and repair work, “… and we have been able to do that, thanks to bonding and healthy revenue.”

But big projects like the Sherman Minton Bridges in Louisville and replacing the Brent Spence Bridges between Cincinnati and Kentucky have legislators focused on immediate needs.

Sen. Tim Shaughnessy, D-Louisville, also a member of the Transportation Committee, doesn’t want to think about something as futuristic as alternative-fuel vehicles.

Speaking during the week in September that President Barack Obama was in Cincinnati to talk about the nation’s infrastructure needs, Shaughnessy said the issue that’s dominating his agenda is the Louisville bridges.

“We’re not doing a good job of planning for what we’ve got now,” he said. “We’ve really got an urgent situation, and we need to get a handle on [that] before we start looking at what’s going to happen 10 or 15 years down the road.”

Like Hancock, Shaughnessy thinks the federal government should be leading on the issue. But he isn’t optimistic.

“I’m a Kentucky state senator,” he said. “I’ll leave the federal issues to the folks in Washington. But if we wait for Washington to come up with an answer, we’re going to be waiting a long time.”

 Running on air

Kentucky may not have a long time. Lampe thinks many different kinds of alternative vehicles such as electric, natural gas and hydrogen cars, will be on the market in the state within three years, not 15.

“Change happens more quickly than we expect,” he said.

Alternative-fuel vehicles like the all-electric Nissan LEAF are on the assembly lines now and are increasing in market share. There are also cars that run on hydrogen, natural gas and air.

Already hybrids like the Toyota Prius are popular, and all-electric cars like the Nissan LEAF are being built and sold.

Most electrics have a range of only 50 miles or so before they have to be recharged, but Tesla has designed electric cars that get more than already get 200 miles on a charge, he said.

Ford and General Motors have for many years been manufacturing forklifts that run on natural gas, and could easily convert their assembly lines to produce passenger cars and trucks that use it.

Fiat’s Doblo, which runs on natural gas, is being sold in Italy.

Hydrogen vehicles, too, may be closer than most think.

“Mercedes,” Lampe said, “has bet the farm on hydrogen,” and Toyota and Honda are also working on it.

Hydrogen cars would be inexpensive to operate and would have to refuel only about once a month, he said.

One new car Lampe finds especially fascinating runs on compressed air. It is the Tata, made by the Indian Motors Company, which also makes Jaguars and Range Rovers. It is currently being used for taxi service in Indian cities, but is not yet available in the U.S.

Except for the $400 air compressor one could buy at Home Depot and the few cents of electricity it would take to run the compressor, the fuel would be free, Lampe said.

“These cars are now on the assembly line, they’re not on the drawing board,” Lampe said.

And they’re coming to car dealerships in Kentucky in the near future.

Green is good

Ecology and economics are two factors that are driving the sale of hybrids and creating more interest in all-electric and other alternative cars.

But would electric cars really be greener than gasoline-fueled vehicles?

Most electricity in this country is produced by the burning of coal, which has become controversial because of mountaintop removal mining and global warming, which most climate scientists believe is caused by the greenhouse effect of increased carbon dioxide in the atmosphere resulting from the burning of fossil fuels.

State Rep. Hubert Collins, D-Wittensville, chairman of the House Transportation Committee, is doubtful about climate change.

“A lot of people think global warming is a myth,” he said.

He also thinks America should be using domestic fuels like coal, which, he said, we have enough of to last “hundreds of thousands of years.”

That same week, newspapers reported that Kentucky’s large coal seams are nearly depleted, and that the remaining coal will be harder and more expensive to mine and cause more environmental damage.

Kentuckians for the Commonwealth, a citizens group that started 30 years ago in the state’s eastern coalfield over mineral taxation and ownership issues, is against mountaintop removal mining, but has no position on the production or use of coal.

“It isn’t a given that the electricity that powers those cars has to be produced by coal,” said Jerry Hardt, a longtime KFTC member.

He mentioned that another KFTC member, Dr. Don Feeney, a Louisville dentist, plans to power his electric car using solar panels.

East Kentucky Power Cooperative uses natural gas as well as coal to produce electricity. It is cleaner, abundant and becoming easier to produce.

Collins thinks that electric and natural gas vehicles, and even cars that run on liquified coal, could be good for Kentucky’s energy economy.

Without a doubt, though, cost savings, not environmental awareness, will be the deciding factor in market penetration, he said.

And he should know something about consumer behavior. He’s a retired car dealer.

What’s good for GM

Lampe thinks Collins is probably right. It may be more about how much “green” individuals and businesses save than about saving the environment.

“People will purchase these vehicles for a variety of reasons,” Lampe said, but when the purchase price becomes about the same as for other cars, and fuel costs for the alternative cars are lower, “people are going to be making economic decisions ….”

And those personal economic decisions will affect the entire economy.

The new cars are coming, and we shouldn’t “demonize them,” Lampe said, because “they will strengthen Kentucky’s economy.”

Kentucky is the nation’s third largest manufacturer of automobiles, behind Michigan and Ohio, and has a skilled work force that knows how to build cars. It has natural gas and coal, and other resources that will be positively affected by the new technologies, he said.

 ‘Don’t tread on me’

Perhaps as controversial as the environmental and economic aspects of alternative-fuel vehicles is the issue of privacy.

Oregon has been studying the feasibility of a vehicle mileage tax by having volunteers equip their cars with global positioning system (GPS) devices that would allow the state to track where cars are driven so that consumers are only taxed for miles driven within the state.

Similar studies have been done in other locations around the country.

“Good gosh!” said state Rep. Donna Mayfield, R-Winchester, when told about the idea of a VMT. “There is something frightening about the government putting a GPS in your car. That’s too heavy-handed. … that’s too Big Brother for me.”

Mayfield, whose husband is a truck driver and a Republican county chairman, said she doesn’t think such a plan would be politically feasible.

“People would balk at that in a huge way,” she said.

She would, she added.

It isn’t only Republicans who feel that way.

State Rep. Bob Damron, D-Nicholasville, said he, too, dislikes the idea of a  vehicle mileage tax based on government monitoring of citizens.

“I don’t think anybody needs to know where I drive my car,” he said. “I don’t think that’s something the legislature would consider.”

The Democratic chairman of the House Transportation Committee said the GPS idea is too complicated.

“I just don’t know how that would work,” said Collins, “unless you just projected so many miles that people would drive on the average and charge them [based on] that. … That might be a thought.”

 Dollars and sense

State Rep. Sannie Overly, D-Paris, who chairs the budget subcommittee on transportation and formerly served on Collins’ committee, agrees with the chairman.

State Rep. Sannie Overly, D-Paris, is one of the legislature's transportation experts and among those who believe Kentucky must look forward to a future in which gasoline and diesel are not the main sources of energy for vehicles.

Other than having a flat fee like that proposed by Kentuckians for Better Transportation, there would be some big “hurdles to taxing those vehicles based on use,” and the privacy problem is one of them. Cost is another. GPS systems would cost hundreds of dollars per vehicle.

Overly thinks there is going to have to be a national proposal of some kind.

“I don’t think it’s going to work for the 50 states to have a patchwork approach to this issue,” she said.

Still, it is an issue she thinks is important, which is why she  conducted hearings on it in 2009 and 2010.

“I would expect to have a hearing in the interim as well, because I do believe it is an issue that will continue to have a great impact on this industry,” she said.

Overly said a federal official testified at one of her hearings, and the most important thing she learned from it was that testimony was that, based on federal analysis, the gas tax is expected to be the most reliable form of revenue for several years, probably through 2015 to 2017.

Kentucky’s situation looks good for now, so she doesn’t expect the need for a new revenue source to be an “immediate issue for the legislature.”

“Especially compared to the general fund revenue, the road fund revenue is healthy and robust, exceeding estimates quarter after quarter,” she said.

It is made up not only of the fuel tax, but the tax on the purchase of vehicles, federal reimbursements, and other sources of income, which, according to the Kentucky Constitution, cannot be used for anything other than roads and public safety.

Yet Overly thinks it’s good to plan ahead.

“It is a long-term concern. Having said that, I don’t think we can wait until it’s a real problem before we try to address it,” she said. “We see it coming. We know it’s coming. Certainly I think we need to be ready for it.”

“Even though it may be down the road somewhere, I have made it an important part of our subcommittee’s work to investigate it and continue to monitor it,” she added.

All taxes, Overly said, are unpopular, including the current fuel tax, but they are necessary to provide government services.

Higdon said there aren’t many services that are more important than having good roads, for reasons such as safety and economic development.

“We all have to pay our fair share,” Mayfield said, but she doesn’t think the time is right for any new taxes or tax increases.

She said there are places in the budget where the state can save money, and dollars could be transferred from the general fund to the road fund.

“There’s an old saying that you can move the capital if you have the votes to do it,” Collins said. But moving funds from other areas to transportation could be a hard sell.

Collins likes the idea of using tolling to pay for some roads and bridges because, like the gas tax, it’s a simple user fee; drivers pay based on the amount of use. But he doesn’t rule out having some sort of fee for alternative fuel vehicles when the time comes for it.

Most folks “are anti-tax, no matter what,” but they still want good roads, he said.

“People want to say, ‘Cut my taxes! Cut my taxes! But don’t take away any of my services,” Collins said. “It just doesn’t work that way.”

SIDEBAR:

Kentuckians for Better Transportation’s proposal for “next generation” motor vehicle excise fees:

“KBT recommends that the 2012 Kentucky General Assembly devise a fair and equitable way to levy the equivalent of a motor fuel excise fee on ‘next generation’ vehicles which will be using Kentucky’s street, road and highway network, but not be using gasoline or diesel as their chief source of fuel. Initially, KBT recommends that the General Assembly consider a simple flat fee be added to annual auto registration fees of these ‘next generation’ vehicles in an attempt to keep administrative costs and burden at a minimum.”

(This statement was adopted by KBT’s highways committee on Aug. 9 and by the board of directors on Sept. 16, 2011.)

Kentucky Senator Gatewood Galbraith?

Gatewood Galbraith said that he would see me in hell, but I don’t hold a grudge.

If he’s right, I’ll be in good company. He said the same thing about David Hawpe, former editor of The Courier-Journal and Tim Kelly, former editor and publisher of the Lexington Herald-Leader.

 

The cover photo for Gatewood Galbraith's 2004 autobiography, "The Last Free Man in America."

Galbraith, who garnered 9 percent of the vote as an independent candidate for governor in the Nov. 8 election, gave the three of us “hell” because we didn’t consider him a serious candidate in past elections.

During his 2003 race for attorney general, I wrote an editorial or column for The Jessamine Journal asking: Do we really want someone as the state’s top prosecutor who is a criminal defense attorney best known for advocating the legalization of marijuana?

Several months later, in his autobiography, “The Last Free Man in America Meets the Synthetic Revolution,” Galbraith struck back, saying most newspaper editors lack intelligence, have never held “real jobs,” can’t relate to real people, “lack courage” to question their “masters’ agenda,” favor the “status quo,” refuse to do anything that might “upset their apple cart,” and get “more ignorant” the longer they hold their jobs.

I don’t think that’s fair. I don’t know of any group of professionals who enjoy upsetting apple carts more than newspaper editors do, or who are more likely to risk going against their paymaster’s agenda.

Cannabis stupida

As for not appreciating the benefits of cannabis, that’s nonsense. Nearly every newspaperman I know who came of age in the time of Hunter S. Thompson conducted herbal experiments, and many would “wake and bake” before their coffee was brewed.

In my case, it never cured my asthma or alleviated anxiety, and it didn’t make me a better writer or interviewer. It just made me dumb and giddy. I gave it up long ago and don’t recommend it to aspiring journalists — or anyone else.

Nor do I think it should be made legal for recreational use, although the latest poll shows I’m in the minority. I know it helps cancer patients with the nausea and other effects of chemotherapy, and for such purposes, it should be available with a doctor’s prescription. But not for treating boredom and other common ailments.

Enough about that.

 

Right and righteous

Gatewood may be wrong about marijuana, and his fondness for machine guns makes me uncomfortable. But he’s right about a lot of other things.

 

2011 independent gubernatorial candidate Galbraith, left, with Republican nominee David Williams, president of the Kentucky Senate, at a KET debate.

What’s important for me as an evangelical Christian is that he’s pro-life and favors increased funding for faith-based initiatives. He’s also a Catholic and a former altar boy, which are two marks in his favor.

He’s also generally conservative in the old-fashioned sense, and not a neocon or a free-market flat-earther.

While he praises marijuana, he has been outspoken about the scourge of prescription drug abuse and would require a prescription for pseudoephedrine, which is used to make meth.

He advocates charter schools for children, greater accountability for teachers, pension reform for state workers and tax reform for all.

 

The environmental costs of mountaintop removal mining far outweigh the benefits, but Galbraith was the only candidate willing to admit that in the last election.

As an environmentalist, I appreciate the fact that he was the only candidate for governor in the last election who had the cajones to stand up to the coal barons and state unequivocally that mountaintop removal mining is an ecological catastrophe and should be outlawed.

And as someone who believes we all have a moral obligation to care for the disadvantaged, I respect him for wanting a 30 percent cap on loans made by payday lenders who prey on the poor.

Finally, as an independent, Galbraith was able to state the truth that most of the problems in government are caused by partisan gridlock and politicians being in the pockets of special interests.

I considered voting for Galbraith this time but didn’t, mainly because of his lack of experience. With their knowledge of state government, both Gov. Steve Beshear and Senate President David Williams were more qualified than Galbraith to manage and lead.

That doesn’t mean, however, that there shouldn’t be a role for him to play in state government if he wants it.

The question is, does he?

 

Maverick

 

Galbraith is wrong about recreational marijuana, but he's right about other things.

Galbraith’s inclination to seek higher offices that he’s unlikely to win reminds me of a story I read this week about the conservative icon William F. Buckley Jr.

When Buckley, the journalist, ran for mayor of New York in 1965, he was asked if he really wanted to be mayor.

I have never considered it,” he playfully answered.

How many votes did he expect to get, a reporter asked.

Conservatively speaking, one.”

And what would he do if he were actually elected?

Demand a recount,” he replied.

He lost, of course, and took enough votes away from the conservative Democrat in the race that he elected the candidate he least wanted as mayor, the liberal Republican John Lindsay.

That’s usually the risk of running for higher office as an independent or third party candidate. For example, we can thank or blame Ross Perot for electing Bill Clinton and Ralph Nader for electing George W. Bush.

In a contest where the stakes aren’t so high, however, having a maverick third candidate can change the status quo — or, as Gatewood would say, upset the apple cart.

For Gatewood Galbraith, winning a seat in the state legislature would provide an opportunity for his voice to be loudly heard beyond the campaign.

And we could be sure that a “Senator Galbraith” would say some things that need saying and that people would pay attention.

 

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