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.