Bacon's Rebellion

Democracy Thrives in Sunlight

HOT-Lane Meltdown on the Capital Beltway

—

by

James A. Bacon
in

A private-sector plan to add four HOT lanes to the Virginia portion of the I-495 Beltway has become so expensive, reports Eric Weiss with the Washington Post, that it may require up to $100 million in public money to make it work. Turns out that the projected cost of the improvements has increased 30 percent since the Fluor/Transurban partnership originally proposed it.

That’s a big blow to the Kaine administration, which had pinned its hopes on private-sector investment to upgrade the major transportation corridors in Northern Virginia. Secretary of Transportation Pierce Homer says still backs the project: “We are fully committed to building and funding the HOT lanes through a combination of state, federal and private resources. We’ll find a way to make this project work. It’s too important to the region to do anything less. We have an opportunity to obtain a billion-dollar facility with a fraction of that put in by the public sector.”

I was a big fan of the project — when it wasn’t asking for public dollars. Now I’m dubious. If the original financing doesn’t work, Fluor/Transurban needs to hike its tolls for accessing the HOT lanes. If travelers aren’t willing to pay higher tolls, then that should tell us something. Maybe it means that, as much as Northern Virginians want relief from traffic congestion, they don’t want it so bad that they’re willing to pay for it themselves. Maybe it means that we’re witnessing another demonstration of Bastiat’s dictum: Government is a device to enable everyone to live at the expense of everyone else.

(Hat tip to Larry Gross for pointing me to this article.)

Share this article

ADVERTISEMENT

(comments below)

ADVERTISEMENT

(comments below)

Comments

11 responses to “HOT-Lane Meltdown on the Capital Beltway”

  1. Toomanytaxes Avatar
    Toomanytaxes

    Where’s the investment by members of the Fairfax County business community? Many have been asking for this type of improvement for some time. They argue that traffic conditions are an impediment to continued economic growth. So why not form some type of investment syndicate for these types of projects?

  2. E M Risse Avatar
    E M Risse

    We all need to keep in mind private sector enterprises exist to make money, not improve mobility and access.

    Enterpises use “it will not cost you a penny” sucker lines to get contracts and then “discover” added costs that are in fact just ways to cut their risk and raise their return.

    Two solutions:

    A comprehensive regional mobility and access plan that ties transport facilities to the traffic generation of the existing and proposed settlement patterns. None now exists.

    An enterprise coming back for more money to sweeten the pot disqualifies bidders for any transport work for a decade.

    Having bidders propose the solutions that they believe will make them the most money and not the ones that will provide the greatest REGIONWIDE mobility and access is a sure way to have the current result.

    EMR

  3. Ray Hyde Avatar
    Ray Hyde

    Government has an incentive and a duty to do what NOVA needs, because gov’t is location specific.

    But an investment syndicate is free to invest wherever their money will bring the most return. Government has to invest it’s money on whatever project will generate the most return/fastest payback whithin its jurisdiction. Unfortuantely, that payback isn’t always strictly financial.

    Government IS a device to enable everyone to live off of everyone else, especilly when there is no profit in it. That’s why we have government. Government spreads out in time and space investments that you can’t justify at a particular time and space.

    The Korean Community does this through investment clubs. Everybody chips in money, and when there is enough it is used to start a business for one individual. Alone, he could never accomplish this. But now, part of his increased income goes back to the investment club, and the next business gets started a little sooner. ETC.

    Every other road gets funding from numerous sources, gas tax, real estate, income taxes, federal. To expect one road to do without that other supplemental income is silly. A lot of people far removed from those that drive the road benefit, just as people far removed from those that ride Metro benefit.

    I don’t see anyone suggesting that Metro should exist on tolls alone. The reason is that it is ridiculous to even think of: Metro would be virtually empty tomorrow if you tripled the fares. The toll road is no different.

    To expect NOVA residents to pay the targeted tax increase that tolls represent, and still pay all the others is just another version of sending NOVA money downstate. They might be more receptive if the targeted tax increase was mollified by an income tax exemption to match the tools actually paid.

  4. Larry Gross Avatar
    Larry Gross

    re: “Government IS a device to enable everyone to live off of everyone else, especilly when there is no profit in it. That’s why we have government.”

    Ye GODS!

    Talk about a “tax and spend” Nightmare!

    Okay.. let’s raise our taxes so that EVERYONE gets complete and free medical care and drugs…. for a start…

    sound okay?

    then we’ll move on to Schools. Everyone who graduates from High School will be gauranteed an all-expense College Education… I like this one too

    Let’s see.. oh yeah.. everyone gets an affordable house….(the developers will love this one).

    I especially like the part.. where I don’t have to work.. unless I feel like it.. but I still get all these goodies.

  5. Larry Gross Avatar
    Larry Gross

    re: “We all need to keep in mind private sector enterprises exist to make money, not improve mobility and access.”

    in Va… most Capital projects – by law – must be offered for BID.

    Only a few circumstances justify sole source bidding and there are ample data to demonstrate why sole source is a very bad idea.

    Either the PPTA law is broken and/or VDOT is using it in a way that ends up with an environment that is not fostering the very environment that is the goal of bidding out capital projects.

    What we’re doing is selecting the builder.. and then trying to negotiate the best deal.

    We all know this is how to get fleeced… if you’re say.. trying to build a school or a firehouse… AND highways….

    The Southern Environmental Law center and other groups have been saying for quite some time that they have big time concerns with Virginia’s PPTA process. It appears that those concerns were well founded.

  6. Toomanytaxes Avatar
    Toomanytaxes

    EMR – I agree that business exists to provide quality goods and services at a profit. My point is, however, that many of the businesses in Fairfax County take the position that transportation problems affect their ability to grow and to operate, such that taxpayers should pay more so that the transportation improvements that aid the businesses’ growth and operations can be made.

    I just don’t see why taxpayers should fund infrastructure that is needed to grow local businesses. If transportation problems negatively affect a group of businesses, they ought to fund solutions to those problems.

    This is more of the same problem we see with the CTB. Transportation projects are funded to advance private business goals.

    We might do equally well reducing traffic volumes by steering some new businesses to locations that are closer to many of the workers who live in outlying counties.

  7. Ray Hyde Avatar
    Ray Hyde

    Gee, Larry, I didn’t invent the phrase, I just see the truth in it. It wasn’t the same as what you see.

    There is no profit to me from running the farm. But plenty of profit accrues to others, as long as I run the farm. Therefore others have enlisted the government to ensure that the farm continues, hopefully forever.

    It is a perfect example of how the government enables everyone else to live off of me. I’m sure there are other examples where the reverse is true, but I know for certain which way the cash flow arrow points around here.

  8. Ray Hyde Avatar
    Ray Hyde

    It is the private sectors job to make money, I don’t see anything wrong with that. They also pay taxes to the government, which is tasked with providing mobility and access.

    If the private sector isn’t getting enough mobility and access to get to their job and make the money to pay the taxes, then which party is it that isn’t doing its job?

    It might be, and probably is, true that the government is doing a lousy job of spending the money wisely, but it is probably also true that the government doesn’t have enough money to do the job that needs done, even if a few think it is doing the wrong job to begin with.

    I don’t see any benefit in beating up on the private sector for not doing a job they don’t have.

    Think about it. Do you really want the private sector to take over the roads, own them, pay for them, and decide where they should go, and when?

    Or is it that you just want them to pay, but you want to keep control and power? Good luck with that.

  9. Larry Gross Avatar
    Larry Gross

    I think we need to distinquish .. what type of businesses in terms of what they contribute – and what they take…

    Retail and Commercial don’t pay taxes. They incorporate them into the price of goods and services that consumers pay; these consumers are the same folks who pay property, sales, and other taxes for road, schools, etc.

    Jobs-generating businesses who sell goods and services external to their jurisdiction do pay taxes .. but very limited ones compared to the burden of individual taxpayers.

    If Fairfax wanted to truly address the lopsided equation of jobs and people – just do what NYC, California and other urban areas do – put a substantial tax on businesses. Some will leave – yes but others will stay.. and the locality will have more balanced way of allocating costs between residential and business.

    It’s not likely that these increased costs will chase off businesses in NoVA who really have no other alternatives if it’s the Feds that they want to co-locate next to… They’ll pay …or
    to TMT’s delight.. they’ll locate in the exurbs where taxes are less… (is this a solution to Fairfax’s woes?)

    If a locality is already crowded and the choice is either increased density or to have new employees commute – both end up with impacts on the community where the jobs are located.

    I agree with EMR – that extending infrastructure , in essence, “leap-frogging” is inefficient but I also agree with TMT also when he points out that backfitting infrastructure for higher densities is very expensive also – AND if you put it off – the result is degradation of levels of service and quality of life for existing residents.

    All things being equal – a mile of new sewer line in Fairfax is going to cost a lot more than a mile of new sewer line in an undeveloped area.

    as Forest Gump sez.. I guess that’s all I have to say about that .. right now.

  10. Toomanytaxes Avatar
    Toomanytaxes

    Matching jobs with houses. Gerry Connolly, who bemoans the mismatch of jobs and housing, decried the movement of the FBI from Tysons Corner to Prince William County, as making the commute & traffic worse.

    Let’s see now. We need to add substantial new (and very expensive housing), along with more office buildings, to Tysons Corner because too many people must commute from where they live to Tysons to work, but moving some of the jobs closer to where many of the people live will make commuting and traffic worse. Ah, the logic of Chairman Connolly! Ah, government by campaign contribution!

  11. Ray Hyde Avatar
    Ray Hyde

    “If a locality is already crowded and the choice is either increased density or to have new employees commute – both end up with impacts on the community where the jobs are located.

    I agree with EMR – that extending infrastructure , in essence, “leap-frogging” is inefficient but I also agree with TMT also when he points out that backfitting infrastructure for higher densities is very expensive also – AND if you put it off – the result is degradation of levels of service and quality of life for existing residents.

    All things being equal – a mile of new sewer line in Fairfax is going to cost a lot more than a mile of new sewer line in an undeveloped area.”

    Now I thinke we are getting somewhere. If between us, we can agree that this is a reasonble statement of the problem, then we can start thinking about rational means of addressing it.

    But if we think the problem is (specifically and immediately, and only) growth, or congestion, or taxes, or immigration, or affordable housing, then we can chase our tails forever.

    There must be some optimum balance between road density, job density, housing density, open space, and transit availability. Some balance betwwen maintaining and retrofitting the old and creating new. We have to first agree on what that would look like, and then we can work on how to get from here to there.

Leave a Reply

Read More