Virginia Attorney General Robert F. McDonnell (R) plans to review the business practices of an Australia-based company that controls the local operator of the Dulles Greenway, his spokesman said Tuesday. McDonnell agreed to the inquiry after U.S. Rep. Frank R. Wolf (R-Va.) raised concerns about whether the toll road’s owners misled state regulators who recently approved increases in the toll rates.The investigation to the financial structure and operations of an Australian company is a convenient scapegoat for the economic unease felt by many here in Loudoun. It is another example of the Republicans seizing on a false issue in the face of real problems facing our citizens.
“We are looking into the overall situation and the financial questions that have been raised by the congressman and others,” said J. Tucker Martin, spokesman for the attorney general.
The Greenway owners recently won approval to increase tolls for a one-way trip from $3 to as much as $4.80 by 2012, a hike that has been denounced by Wolf and many state lawmakers. - LoudounExtra
Let's do some math to evaluate the criticality of this issue. In doing so, we will examine a wost-case scenario in which a person takes the road far more frequently than the average commuter, and Macquarie raises the tolls to the maximum, immediately.
Macquarie has received approval to increase the toll from $3.00 to $4.80 by 2012. Assuming a person takes the road twice a day, 300 days/year, and the toll is raised to 4.80 starting in 2008, the driver will be paying an extra $1,080 / year in tolls.
Delving deeper into these numbers, however, we need to account for things like inflation, by which prices for things go up marginally every year. Inflation in the Washington DC-Baltimore metropolitan area has averaged 2.76% / year since 1997. Inflation alone would push the current $3.00 toll to $3.44 by 2012. That means that inflation alone would increase the annual cost of tolls by $264/year by 2012. Thus, the increase in 2012 is $816 above what would occur naturally by inflation. That is an increase of approximately $68/month in 2012 above that which would naturally occur due to inflation. (And remember, this is assuming 600 Greenway trips per year.)
So Frank Wolf, Bob McDonnell and the other Republicans in Virginia deem it appropriate to spend taxpayer money investigating a $68/month increase in consumer expenses by a state-regulated corporation. That is wonderful news for Virginia consumers. After all, it must mean that any state-regulated corporation whose cost increases are greater than $68/month must be even more worthy of investigation.
I welcome the Attorney General's investigation of state-regulated health insurance companies. These companies premiums have increased over 7% per year over the past two years. And the problem may even be worse than that.
Health Care Premiums Have Risen 35.8 Percent in Virginia Since 2000. Health insurance premiums have risen four times faster than wages over the past six years on a national level. Between 2000 and 2005, the average monthly premium paid by workers for family health coverage rose 39.7 percent, after adjusting for inflation. In 2005, the average inflation-adjusted health care premium for family coverage in Virginia was $10,628, which is 35.8 percent higher than it was in 2000. Similarly, the average health care premium for individual coverage in Virginia has risen 27.9 percent since 2000, to an estimated $3,856 in 2005. - U.S. Congress, Joint Economic CommitteeThat means that the increase in health insurance premiums in one year is $828 (7.7% above the 2005 family coverage premium). That is greater than the increase in the cost of the Greenway to the consumer in four years ($816).
Using the Republican's own logic, the health-insurance companies should be investigated first, as their increases in consumer costs are even greater than those of the Greenway. Oh, and incidentally those increases affect all Virginians, not just those in Loudoun.
And what about another set of state-regulated corporations, the utilities? Dominion power recently asked for an increase to its rates.
Dominion Virginia Power has asked state regulators for permission to raise electricity rates this year to cover rising fuel costs, translating into a monthly bill increase of about 4 percent, or $3.41, for the typical residential customer.This is just the tip of the iceberg, however, as has been noted by the State Corporation Commission.
Dominion, one of the country's 10 largest public utilities, is likely to ask for similar increases next year and the year after that, company spokesman David Botkins said. - The Washington Post
While these retail rate caps [on electrical utilities] will remain in place through 2010, we note that through various provisions of the Restructuring Act, Virginia’s electric utilities will have several legally permissible avenues to increase rates between now and the end of 2010.Electricity rate caps expire in 2011, which is before the 2012 date for the maximum toll increase on the Greenway. Thus, these increases represent a more immediate cause for concern than those on the Greenway. Consumers can choose to drive other roads than the Greenway, but electricity is much less of a discretionary cost in the household budget of Loudoun County residents. (And once again, electrical rate increases impact all Virginians, not just those in Loudoun County.) If the Attorney General is serious about investigating price increases by regulated corporations which impact household budgets, it is wise to start with increases in non-discretionary items first.
For example, Dominion Virginia Power is authorized to seek yearly changes in rates for fuel costs beginning in 2007, and other Virginia electric utilities, including Appalachian Power and electric co-operatives, may seek rate increases for environmental, reliability, and fuel costs, and two general rate increases, before 2011. Appalachian has already twice applied to this Commission for increases in base rates and Delmarva Power was recently granted a 25% overall rate increase. The Act’s ability to protect Virginia’s homes and businesses from increases in the market-based price of electricity via the Act’s capped base rate mechanism is limited. More Virginia retail customers could see precipitous increases in their electric bills as utilities apply for permitted increases for base and fuel charges prior to the expiration of capped rates on January 1, 2011. - "Status Report: The Development of a Competitive Retail Market for Electric Generation within the Commonwealth of Virginia," The State Corporation Commission
The squeaking about the Greenway toll increases coming from the Republicans is only so much election year politics. Of course the Attorney General won't investigate price increases by Dominion, they gave him $25,000 last year. Of course the health insurance industry won't be investigated, they gave over $200,000 to Virginia politicians this year.
Macquarie is a convenient scapegoat who has given no money Virginia politicians, thus, it is perfectly appropriate for Frank Wolf, Bob McDonnell and other Republicans to lambaste a private company for legally making a profit under the rules of the game established by Richmond.
As Delegate Dave Poisson has said, "We’re three weeks from an election." And that is the only reason this is coming up now, not in previous years, when Frank Wolf could have done something about it in Congress. And it is the reason they're going after the Greenway tolls, and not issues that actually matter.
But Loudoun's voters are too smart to be fooled by this Kabuki theater. In November, they will show Bob McDonnell and Frank Wolf what really matters.
Delegate Poisson gets the last word.
"In every other case, we have worked together, Republicans and Democrats. When you look at who was there [at the press conference], it was being done to draw attention to their candidacies. I wish it were not being done. I have been [involved with trying to curb the toll increases] every step at the way. I've met with the management of Trip II, and have tried very hard to find ways to reduce the tolls. I don't take a backseat to anyone on this issue," Poisson said. - Leesburg Today
[update]And just to hammer the point home, the Washington Post has an article in the paper, 1/3 of people in our area are without health insurance. So what's the real issue? $68 more/month in tolls, or the millions spent on crisis care for people without health insurance.
The Maryland Health Insurance Program is an insurer of last resort for the state's adults who have been rejected for an individual policy, who are too young or not disabled enough to qualify for Medicare, and who are too wealthy to qualify for Medicaid. Thirty-three other states have similar programs. (Virginia and the District do not.) - The Washington Post