Bacon's Rebellion

Democracy Thrives in Sunlight

All of the Camel is Almost in the Tent

—

by

Dick Hall-Sizemore
in , ,

by Dick Hall-Sizemore

For more decades than one can remember, the policy of the Commonwealth, with one exception, has been to pay for road construction with money raised by gasoline and other transportation-related taxes. Money in the state’s general fund, consisting of revenue from income, sales, and other miscellaneous taxes, was not available for road construction.

The exception was the widening of U.S. Rt. 58, which stretches along the state’s southern border from the Atlantic Ocean to the Kentucky border, to a divided, two-lane highway along its full length. In 1989, the General Assembly authorized the State Board of Transportation to issue up to $600 million in bonds for the project. The source of debt service for the bonds was up to $40 million per year from state recordation tax revenues, which was one of the sources of revenue for the general fund. In 2008, the source of money from the general fund was changed to the state tax on insurance premium revenue.  (See summary of funding for the Rt. 58 program here.)

A portion of the state general sales tax revenue is dedicated for transportation. However, that revenue is from an increase in the sales tax rate specifically for transportation purposes. That chunk of funding does not come out of money originally deposited into the general fund.

Other than the Route 58 exception, the wall between the general fund and transportation funds remained intact until 2022. In that year, the General Assembly appropriated $470 million to fund the widening of I-64 from Bottoms Bridge in Henrico to James City County. It also appropriated $5 million from the general fund “to expedite the replacement of the Robert O. Norris Bridge” that spans the Rappahannock River between Lancaster and Middlesex counties. (See prior discussion of the I-64  project here.)

In his proposed budget for the 2024-2026 biennium, Governor Youngkin included $70 million from the general fund for the widening of a section of the northbound lanes of I-81. He also proposed appropriating $20 million from the general fund for the Transportation Partnership Opportunity Fund (TPOF). This latter fund is used for transportation improvements related to economic development projects. Its source of revenue has traditionally been transportation-related revenues. The General Assembly rejected the use of general fund revenue for TPOF but agreed to use general fund revenue for I-81.

Each of these instances of general fund revenues being used for specific highway construction projects is for a large project that benefits a large region or regions of the state, rather than a single locality or area. However, members of the General Assembly have caught the scent. Ten years ago, there were no amendments submitted by members to provide general fund appropriations for highway construction projects. Five years ago, there were two such amendments. During the most recent session, there were 15 such member requests, including one for $20,000 for the repair of a sinkhole. Although the money committees did not approve any of these requests for the final budget, it is probably only a matter of time until the legislature begins appropriating general fund revenue for individual road construction projects, based on politics as much as on the merits of the projects.

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24 responses to “All of the Camel is Almost in the Tent”

  1. Stephen Haner Avatar
    Stephen Haner

    Typing this in Virginia Beach. On the drive down yesterday went through the 64 widening project, starting now only a few miles outside Richmond, and then got a nice, slow look at the Hampton end of the bridge tunnel project progress as the backup crawled along. At least we are seeing the money in action! But I agree, the Assembly has broken out of the corral and now transportation will be sucking up GF resources, adding to the call for a tax hike for "basic services."

    But then, the Assembly is in town this afternoon trying to fix their cock-up on the veteran family education benefits, a classic example of an issue that should never have been buried into the budget. The only rule is the Assembly gets to make its own rules and it doesn't often learn from its mistakes.

  2. walter smith Avatar
    walter smith

    I suspect we will regret losing that discipline…

  3. LarrytheG Avatar
    LarrytheG

    Folks can credit or blame Aubrey Lane for leading how VDOT would get funding , including tolling for Virginia's transportation.

    No question in my mind that tolls are necessary in the urbanized areas of the state, not only NoVa, but Richmond and Tidewater. They work on I-95
    north from Fredericksburg quite well and are gaining support from some commuters.

    Smartscale has changed the game the way that localities and regions get
    funding for projects. There's a total pot of money decided each year and proposed projects have to prove themselves more cost effective than others on a competitive basis. The most cost-effective projects get funded from a piece of the total fund. The ones that fall short get nothing and have to come back the next year with a better project and some never will meet
    the benchmarks for cost-effectiveness and that's driving some to get their
    local elected to go to the GA for earmarks.

  4. how_it_works Avatar
    how_it_works

    "In that year, the General Assembly appropriated $470 million to fund the widening of I-64 from Bottoms Bridge in Henrico to James City County. "

    Gee, why didn't they avail themselves of the services of a company like Transurban?

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      If Transurban had thought there was sufficient traffic to produce enough toll revenue to make it worth their while, I am sure they would have made a pitch for it.

      1. how_it_works Avatar
        how_it_works

        There was sufficient traffic to warrant the widening of the highway. At least I would hope there was.

      2. LarrytheG Avatar
        LarrytheG

        I can't recall enough to get a google search to produce the results but pretty sure there WAS a proposal to toll I-64 east of Richmond but it went belly up because potential tolling companies were concerned people would divert to US-460.

        But what helped kill it was covered in this BR post:

        https://www.baconsrebellion.com/wp/closing-the-books-on-u-s-460-fiasco/

      3. how_it_works Avatar
        how_it_works

        There was sufficient traffic to warrant the widening of the highway. At least I would hope there was.

        1. LarrytheG Avatar
          LarrytheG

          One of the problems with widening most original interstates is that almost every bridge, overpass, interchange would have to be re-done – like was done on I-95 at a cost of over a billion dollars. Each one can cost 20-200 million to rebuild.

          Early on, VDOT, said there was not that kind of money in their funding stream and no real commitment from the GA to provide such funding.

          I believe that VDOT, under Layne decided to explore tolling and also decided that they would outsource the tolling to companies that specialized in electronic tolling rather than VDOT operate the tolls in part because tolling
          was transitioning to all electronic tolling which VDOT did not have much expertise in.

          Further, it was decided that it would not be fixed price tolling but variable-priced according to congestion levels – an idea that came from the conservative Reason Foundation ( https://reason.org/commentary/congestion-pricing-improves-traffic-flow/ ).

          Federal Highway will not allow an original "free" interstate to be subsequently tolled but they will allow added lanes to be tolled included converted HOV lanes and so that became the approach.

          Prospective tolling companies also demanded that no new parallel roads be built that would
          compete with the toll lanes and undermine their ability to recover their investment.

          This was also the problem with I-64 east of Richmond also because of US 460. The toll companies were pretty sure they'd lose money (or take too long to recover their investment) on tolling because too many would divert to US 460.

          So US 460 was to also be tolled and I admit to being fuzzy on the details but Google with the right keywords to dredge up a lot of the reports and news).

          The problem was they would need wetlands permits for US-460 from the Army Corps of Engineers and COE warned from the beginning under current law it could not be permitted unless there was no feasible other way (regardless of financial) , and they never budged from that even with
          the involvement of Virginia Federal legislators.

          Without that, the toll companies were convinced the project was not financially feasible and bailed but by that time the state itself had already gotten financially involved and there were efforts from the state to recover it's money that turned into a mess.

          So the state abandoned that idea and things stayed that way until some change of heart from VDOT and the GA led to funding outside of VDOT's existing revenue streams.

          VDOT has maintained from the beginning under Layne, that they did not have the necessary funding streams to pay for such major infrastructure no matter where, in NoVa or Richmond, I-81 or Hampton unless there would be tolling and/or separate State funding.

          All the major players seem to agree and so the GA is getting itself involved funding transportation outside of the original pay-as-you-go funding strictly from gas taxes and other user fees (like sales taxes on new cars and insurance premiums).

          When the GA approved Transportation getting half percent of the general sales tax, they started getting away from direct user fees, in part because as cars got more and more efficient, the revenues from gas taxes would shrink and at some point if electric cars came to be, plummet. ( they now also have a "highway user fee" for cars that are "too" efficient.

          VDOT has taken a multitude of whatever paths they can to get the money they feel they must have if they are to properly maintain and operate transportation infrastructure in Virginia and there are no shortage of critics who disagree across the board with such a claim.

          VDOT is considered to be one of the better DOTs in the US by man transportation groups.

          There are others that read BR that "know" transportation in Va and I can add to (and perhaps more accurately describe) what has been written above.

        2. Dick Hall-Sizemore Avatar
          Dick Hall-Sizemore

          The project did not qualify for funding with transportation funds under VDOT's Smart Scale program, which uses a number of factors, including congestion, to determine which projects get on the Six-Year Plan. There was a lot of political pressure from local businesses along the route. See my prior discussion of this project. https://www.baconsrebellion.com/does-this-highway-need-to-be-widened-to-six-lanes/

          1. LarrytheG Avatar
            LarrytheG

            There is strong disagreement with respect to the parameters that Smartscale uses to evaluate road projects – and it has changed and evolved which really upsets those who tried to figure out what Smarscale valued, reconfigured their projects to be what SmartScale wanted, then Smartscale changed the parameters again.

            At the last MPO meeting, the staff said they had worked hard to reconfigure projects, then the parameters changed and they truly had no idea how their submitted projects would fare under the updated parameters!

            The other aspect is that MPOs (and Planning Districts, larger city/counties) usually have access to staff and resources to study Smartscale and to be able to reconfigure projects but many counties don't have such staff and have to get help from VDOT which may not have wholly dedicated staff to help
            the smaller city/counties.

            Lots of dissatisfaction with Smart scale and I presume some efforts to get rid of it and/or go around it.

          2. LarrytheG Avatar
            LarrytheG

            There is strong disagreement with respect to the parameters that Smartscale uses to evaluate road projects – and it has changed and evolved which really upsets those who tried to figure out what Smarscale valued, reconfigured their projects to be what SmartScale wanted, then Smartscale changed the parameters again.

            At the last MPO meeting, the staff said they had worked hard to reconfigure projects, then the parameters changed and they truly had no idea how their submitted projects would fare under the updated parameters!

            The other aspect is that MPOs (and Planning Districts, larger city/counties) usually have access to staff and resources to study Smartscale and to be able to reconfigure projects but many counties don't have such staff and have to get help from VDOT which may not have wholly dedicated staff to help
            the smaller city/counties.

            Lots of dissatisfaction with Smart scale and I presume some efforts to get rid of it and/or go around it.

          3. Dick Hall-Sizemore Avatar
            Dick Hall-Sizemore

            Thanks for the update. I used to keep abreast of what was going on in VDOT, but have lost touch. I thought the consesus was that SmartScale was the best thing since sliced bread.

          4. LarrytheG Avatar
            LarrytheG

            VDOT thinks so and so do folks who remember the bad old days when a locality could get their
            project on the 6yr plan without dedicated funded and the game was to see who could pull strings
            to get their pet project funded no matter whether is actually had good transportation value or not.
            Some referred to them as “developer roads”. So, now those kinds of roads often can’t pass muster in
            Smartscale. Smartscale is also bounded by a certain dollar amt per year and so a bunch of projects
            can be proposed but they’ll only pick the top ones until they’ve exhausted the available dollars. The ones
            that did not make have to come back the next year if they were competitive. THe ones that scored
            badly and have no chance of future funding just go away unless they can find a sponsor who will
            attempt an earmark in the GA.

            I forgot also to mention, a locality, MPO can add local money to a proposal to boost it’s cost-effectiveness
            score. In other words, lower scoring projects can leapfrog higher scoring ones if the locality adds money
            to the proposal.

            So, lots of critics who would gladly go back to the prior way of getting projects approved and the reason
            why more individual projects are being proposed to the GA to fund. I won’t say VDOT does not care
            but as long as they can keep their pot of money intact, and the GA comes up with moremoney for other
            projects, they’re apparently ok with that and would not publically oppose such projects.

          5. how_it_works Avatar
            how_it_works

            Well, well, well…the “Virginia Way” works once again.

  5. Nancy Naive Avatar
    Nancy Naive

    Well, to paraphrase George W., “Make the parking lots wider.”

  6. LarrytheG Avatar
    LarrytheG

    The way that Highway Transportation "works" in Virginia is through VDOT districts:
    https://uploads.disquscdn.com/images/c7c47d5d8f196f4e1e15e3f211c5a323d99c9d25a2811a1e86067455c703cda1.png

    They are NOT aligned with Virginia Planning Districts nor with regard to major roads. I'm not sure what method was used to decide the number of districts, size, etc.

    But each district is responsible for most all the roads in their district including the pieces and parts of roads that are statewide and go through more than one district – like the interstates and Primary roads.

    VDOT calls at least some of them Corridors of Statewide Significance (CoSS) which tends to mean they may be managed at a higher level
    than a district-only level – which may push such projects beyond SmartScale which as far as I can tell is done at a more granular level
    even below VDOT Highway District level – but not above that level.

    I don't know how VDOT addresses road projects that travel through
    more than one VDOT highway district. Such projects do appear on
    their 6yr plan I think but how such projects are coordinated and funded
    is beyond my knowledge although I'm quite sure there are some folks
    in VDOT and the GA that know.

    1. LarrytheG Avatar
      LarrytheG

      These are the VDOT Corridors of statewide significance that transcend https://uploads.disquscdn.com/images/f977397cb8c0f14a6395a107c57af71197d5810d9ed84e6a34d3fab77d1a169b.png the VDOT Transportation Districts:

      https://www.baconsrebellion.com/wp/what-is-corridor-of-statewide/

  7. energyNOW_Fan Avatar
    energyNOW_Fan

    We should do a toll booth to get some other-peoples-money. For example, NJ, DE, MD on I95. I would think those states get a lot more out-of-state funding than Virginia does. Virginia's focus is taxing NoVA out of existence, but that is us.

    1. LarrytheG Avatar
      LarrytheG

      people coming through DC out of state , GLADLY pay $20+ to avoid the NoVa mess! And we DID have it in Richmond and when we did the bypass, dropped it! Never fear, many localities along I-95 get to tax out-of-state with the meals tax!

  8. agpurves Avatar
    agpurves

    Transportation should be allowed to compete for the General Fund against schools, which need competition more than money, and "health care" (actually sick care) whose costs are driven by the epidemic of chronic diseases caused by highly processed foods, e.g., added sugar, refined flour, factory oils (Canola, Mazola, Crisco, soy, …), artificial colors, artificial flavors, preservatives, sodas, fruit juices, …

    1. LarrytheG Avatar
      LarrytheG

      Sounds a little "off the wall" to me. Virginia is offering a pay-as-you go plan for folks :

      " Virginia's Mileage Choice Program is a voluntary option that allows drivers of eligible vehicles to pay their highway use fee (HUF) on a per-mile basis instead of annually when registering their vehicle. Drivers who participate in the program install a device in their vehicle that tracks their mileage. When registering, they enter payment information and pay an initial balance of $15, which decreases as they drive more miles. Drivers who drive less than the annual HUF will pay less, and those who drive more will never pay more than the annual fee."

      And if you're really hard-core, you can just refuse to have health insurance and pay as you wish.

      I do acknowledge we all pay out the wazoo for public education.

  9. f/k/a_tmtfairfax Avatar
    f/k/a_tmtfairfax

    Thursday, I remembered one of the reasons we moved from McLean to North Carolina — traffic. I drove Route 1, I-85, I-95 and the Inner Loop of the Beltway, from home to Tysons for meetings and a firm social event. Tolerable until I hit Prince William County and then hellacious to Tysons.

    I was impressed, however, with how much VDOT had completed since we left. But Virginia simply lacks sufficient highway capacity. Drive from Durham to Greensboro on the Interstate. It's largely four lanes in each direction. There is less interplay between big trucks, which tend to stay in the two right lanes, and cars. A lot safer and easier to drive.

    VDOT should add toll lanes all the way to Richmond and widen the general purpose lanes to four in each direction. Keep the big trucks to the two right lanes.

    Coming back today (left Tysons at 8:10), it was better, but I still rejoice when I reach Petersburg and exit I-95 for I-85.

    1. LarrytheG Avatar
      LarrytheG

      I pretty much feel the same way about the traffic and adding lanes.

      One of the perverse things with respect to toll lanes is the amount of toll that can be charged is affected by demand, i.e. how many are willing to pay it and the actual cost of widening/adding lanes includes tearing down and rebuilding bridges, overpasses and interchanges do the new lanes can fit under.

      That cost is so high that the amount of toll that could be charged won't come close to paying for all of it.

      So far, the companies like Transurban and Mobility Partners are not excited about making such an investment and not get it back in a reasonable amount of time plus profit.

      VDOT would essentially have to pay the toll operators as an
      at-will, for profit, concession so that would end up being a
      permanent hit in VDOT's budget with some seeing it as
      taking money away from other projects.

      That kind of arrangement has been considered before but
      it don't sit well for some folks.

      But there is some support for toll roads more than it used to be – people defend them now, so perhaps we may actually see people ask for it to be done!

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