Bacon's Rebellion

Democracy Thrives in Sunlight

No More Free Lunch: User Pays

—

by

James A. Bacon
in

Everybody knows that Virginia needs to invest more money in its transportation infrastructure. The central questions that have concerned lawmakers is how much money, and who pays? (I’ll leave aside for now the nettlesome issue, which has received insufficient attention, of coordinating transportation improvements with human settlement patterns.)

As the collapse of the HB 3202 funding formula shows, Virginia’s transportation funding policy is in total disarray. In this week’s column, I argue that the only approach to raising more money for transportation that can be sold politically to the public is one built around the principle of user pays. In the normal course of politics, constituencies lobby for road and transit improvements that benefit them — but do their utmost to shift the cost to someone else. That just won’t work anymore. People don’t trust the system to treat them fairly. The only politically palatable way to raise funds is to ensure that those who use, or benefit from, transportation improvements pay for those improvements themselves.

No more taxing the public and cycling billions of dollars to Richmond where politicians, bureaucrats and rent-seeking lobbyists can divert funds to their own special uses. From now on, transportation revenues must go directly back to those who pay for them. And if the money can’t be found to build a pet project, then maybe, just maybe, it doesn’t deserve to be built.

But never fear. There are many, many sources of funds that we can tap to expand our transportation system. In “User Pays,” I outline many of them and show how they can be sold politically to a skeptical public.

Most of these ideas are familiar to faithful readers of Bacon’s Rebellion. But for the benefit of those who don’t haunt this blog every day and read all the comments, here is an outline of the main points:

  • Dedicate the gas tax to maintenance. Raise or lower the tax as maintenance costs rise or fall.
  • Prepare for the day when the gas tax doesn’t work anymore by investigating a Vehicle Miles Traveled tax.
  • Use privately financed tolls to build major new bridge and limited-access highway projects.
  • Charge impact fees on commercial and residential development
  • Use CDAs and TIFs to finance local projects when impact fees do not suffice
  • Use congestion tolls to allocate scarce highway capacity. Create congestion “corridors” and “districts” where the tolls apply, and plow back revenues into improvements that increase mobility and access within those corridors and districts.
  • Tap the General Fund only for projects that can be justified on the basis of public safety or economic development.
  • Pass a constitutional amendment to protect dedicated transportation revenues from legislative raids.

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Comments

  1. Groveton Avatar
    Groveton

    Jim:

    Very nice job on the “User Pays” article. It is clear and specific. I do have a few questions:

    1. Your write a lot about private enterprise’s role in transportation – especially in building toll – financed transportation projects. There seems to be an undercurrent that the state of Virginia just can’t do this themselves. Personally, I think the state legislature is pretty much a waste of time and money (vague polls about Virginia’s business climate not withstanding). Why should we outsource road building and toll operations while still keeping VDOT as a state government function? If you don’t think the state is sufficiently competent to build a bridge or collect a toll why do you think the state should run VDOT?

    2. Mortgaging the future. Many of the toll schemes I have seen (congestion and otherwise) involve the state selling the public roadways to private concerns. Although the contract is legally a lease, the lease runs for 50 – 70 years. In my mind, that is a sale in a lease’s clothing. Isn’t this essentially the same as deficit spending? Deficit spending has us spending more than we collect in taxes thereby increasing the national debt. Conservative people often say this “mortgages the future” and will harm future generations. Now the politicians want to sell the roads. I asssume they will spend the money raised through road sales on whatever half baked ideas they dream up over the next few years. So, we will exchange a public asset for money and then use the money to meet ongoing operating costs that cannot be met under the current tax structure. Once the money is gone we’ll have neither the money nor the roads. Isn’t this a violation of the “pay as you go” philosophy? Why do we have to sell the roads to implement tolls?

    3. Your ideas on governance are very much “business as usual”. This is my biggest problem with your recommendations. While you allow for “congestion corridors” you still keep almost all of the control in Richmond. I think this is a fatal flaw in your argument. Why would a centralized transportation governance system have an advantage over a decentralized transportation governance system? In other words, what advantage does state legislature control of transportation bring versus regional government control of transportation? One big disadvantage of the present system is that the delagates and state senators cannot simultaneously represent their constituencies and do what’s right for Virginia overall. That’s because (in transportation) there is no one thing that is right for Virginia overall. What’s right for NoVA may be wrong for the City of Richmond and what’s wrong for the city of Richmond may be right for Wise County. Centralizing this governance process does far more harm than good.

    4. There is too little transparancy for this to work. Money moves through the Commonwealth of Virginia in very odd ways. The General Assembly seems to make significant efforts to hide what they are really doing. I don’t trust them to implement a “user pays” system that is fair. Until the money flows are open, honest and properly reported I question your assertion that “user pays” will be fair. In theory you are right. In practice, there is too little basis to trust the General Assembly (in my opinion).

  2. Anonymous Avatar
    Anonymous

    “Once the money is gone we’ll have neither the money nor the roads. Isn’t this a violation of the “pay as you go” philosophy? Why do we have to sell the roads to implement tolls?”

    Exactly. Good point.

    Not only that, but the money collected from road users won’t even be pay as you go becasue it will be spent on transit users. The recent blow up over bus vs VRE shows that even with this highway robbery transparency is mostly opaque.

    RH

  3. Anonymous Avatar
    Anonymous

    I still have the problem that we think this is going to cost something like $800 aditional per car per year for the next 20 years (assuming the number of cars is stagnant). Or $14,000 per resident over 20 years (assuming the population is stagnant).

    Reducing those kinds of numbers down to the number of users who will actually pay means more pain for a smaller pool and less money available in the end.

    Of course, this is the actual intent of “user pays”: to make sure that there isn’t enough money available. To minimize espenditures on those nasty autocentric roadways.

    Why not just come out and say so?

    RH

  4. Jim Bacon Avatar
    Jim Bacon

    Groveton, Very good questions. I will try to answer them.

    Question 1: Why continue making transportation a state function? (Is that a fair way to boil down your question?)

    The role of VDOT should be pruned back, though not eliminated entirely. All cities, plus Henrico and Arlington counties, already maintain and build their own roads. One aspect of HB 3202 which has received little attention is that the General Assembly set in motion mechanisms to devolve responsibility for secondary roads to fast-growth counties. That’s exactly who should be in charge of deciding where the roads should go — the people who are approving the comprehensive plans and zoning petitions. I would go a step further and take secondary roads in all counties away from VDOT. Trouble is, not everybody wants the responsibility.

    Ideally, in my mind, VDOT would stay in charge of building and maintaining Interstate highways and state highways used for inter-regional transportation. There should be regional transportation authorities ( with elected representatives and normal rules of transparency) in charge of regional arteries and connectors. And municipalities should be in charge of local roads.

    Question 2. Should the state sell off roads to private interests as a way to raise money? Again, I agree with you. Privatization is fine when the private entity builds a new road (bridge or rail line) that did not exist before — like the Dulles Greenway. I do not like the idea, however, of Virginia selling off its patrimony to private investors. Why? Not because there’s anything intrinsically wrong with private ownership, but because I’m worried that the politicians will squander the money and that, as you rightly observe, we’d end up without the roads or the money.

    Question 3: Bacon’s idea of “congestion corridors” would leave the control in Richmond. Not at all. One of the advantages of setting up congestion corridor authorities is that it bypasses Richmond. The main thing that Richmond would do is to create the legal framework for congestion corridors to exist. If there were regional transportation authorities, they would oversee the establishment of congestion corridors. Once a congestion authority was set up, it would collect and dispense the toll proceeds without any interference from Richmond at all. Richmond would be out of the loop.

    Question 4: There is not enough transparency in the system for voters to trust the politicians and bureaucrats in Richmond to do it right. Once again, we agree, at least in the abstract. Transparency is absolutely essential to regain the trust of citizens. I’m not sure, however, what additional levels of transparency we need over and above what we have now. Perhaps Norm Leahy’s column this week points to a worthwhile idea. Other than that, what kind of transparency would you look for?

  5. Jim Bacon Avatar
    Jim Bacon

    Reader John Raneiro submitted the following comments by e-mail, which I reproduce with his permission:

    Enjoy the read as always – mostly agree with your ideas: 2 things.

    First, not only do we need sustainable sources of revenue, but we need the design and materials being put into our roadways to be long-term also! There is a dangerous trend happening inside our state that is coming from pressure from the FHWA (through lobbyists) pushing the DOT to accept materials into there specs that are “cheaper” both in cost but also in performance! We don’t have the money to build it now, much less build it and then have to rebuild it in 5 to 10 years when the products fail.

    Second, although I do find the VMT tax interesting, would it punish people who drive to work in areas where public transportation is not currently available? Say would someone who drives the 15 miles from Bristol to Abingdon pay the same amount as one who drives 15 miles to work in an area of NOVA where a metro station may be within a reasonable area of use? Seems the people who choose to drive and not use public transportation would pay more for the added congestion? Just a thought.

    We are past critical with respect to transportation in the commonwealth….we need to work together to find solutions for the short and long terms needs of Virginia….doing so with a goal of sustainability and sensible growth planning always in mind….and no additional government agencies created along the way!

  6. Jim Bacon Avatar
    Jim Bacon

    Ray, You said, the point of user-pays is “to make sure that there isn’t enough money available. To minimize expenditures on those nasty autocentric roadways.”

    No, the point is (a) to break the legislative deadlock by finding a way that citizens might accept to raise more money for transportation, and (b) to end the practice of everyone trying to get the roads (or rail) they want while getting someone else pay for it, which is a guarantee that we’ll wind up paying for a lot of inefficient projects.

    Please note: The logic that applies to roads applies also to rail and mass transit. Projects should not be built if they can’t pay their own way.

    The only exception I would make is this: In congestion corridors and districts, if the corridor authority determines that the most cost-effective way to relieve road congestion is to reinvest toll revenues in transit projects.

  7. Jim Bacon Avatar
    Jim Bacon

    John Raneiro, I’m very interested to hear more details about lobbyists working through FHWA to mandate cheaper materials that result in higher maintenance costs. That’s typical rent-seeking behavior. The only way to end it is to expose it. Can you name names? (Reply to my private e-mail address if you don’t want to do so publicly.)

    As for your question comparing two motorists, one in Abingdon and one in Fairfax, who drove 15 miles to work each day… Under my scheme, they would pay the same gas tax on the grounds that they’re putting the same wear and tear on the roads, hence, they are imposing the same maintenance obligations on the state.

    Here’s the difference: There is a road-scarcity issue in NoVa that there isn’t in Abingdon/Bristol. NoVa commuters would pay congestion tolls to access congested roads during periods of peak demand. Abingdon drivers would not — until such time as congestion got so bad along Interstate 81 that a congestion corridor was established there, too.

    In either case, under my plan, the congestion corridors would operate much like the Richmond Metropolitan Authority, which I described in a recent blog post. The authority would decide how to spend the toll proceeds the most efficiently to increase road capacity or provide congestion-relieving alternatives.

  8. Jim Wamsley Avatar
    Jim Wamsley

    “Bait-and-switch”
    “Coordinating transportation improvements with human settlement patterns” is the heart of the issue. Here is the latest on coordination. Without coordination you can’t get the deal. With VDOT doing the coordination you can’t get better settlement patterns.
    “Washington area leaders agreed to turn the carpool lanes on Interstates 95 and 395 into express toll lanes in part to raise $195 million for transit, a plan that included buying 184 clean-fuel buses that would speed commuters into the District or to the Pentagon.
    But that was before the proposal got to Richmond. The state’s transit agency reworked the plan, put together by the Virginia Department of Transportation and a consultant. It wants to use toll revenue to extend Virginia Railway Express train platforms in Fredericksburg and to pay $1.3 million for storage for six Fredericksburg-bound train cars that would be bought with $12.6 million in toll money.
    And all those new buses? The number has been reduced to 76.
    “It’s a bait-and-switch,” said Alexandria Mayor William D. Euille (D).”

    http://www.washingtonpost.com/wp-dyn/content/article/2008/03/22/AR2008032202088.html

  9. Larry Gross Avatar
    Larry Gross

    re: bait and switch

    What I found fascinating about the study was that there was not one mention of Stafford, Fredericksburg, Spotsylvania – ….

    It’s like the TPB drew a circle around the Wash Metro Area and essentially pretended that there are no automobiles on NoVa roads from outside of that circle.

    One can not agree with the concept of using auto tolls for transit (although those folks are in the minority.. most support the concept) but if you ARE going to use toll money to build a more robust public transportation system.. don’t you need… park n ride lots and VRE in the originating jurisdictions with the commuting area?

    Was NoVa and Wash Metro planning on not doing anything to reduce commuting traffic from outside the “circle”?

    who knows how it will ultimately turn out but one must wonder – if the HOT lanes are going to extend south as far as Fredericksburg – wouldn’t it be logical to use some of those tolls for VRE and park n ride lots?

  10. Groveton Avatar
    Groveton

    Jim Bacon:

    Thanks for answering my questions. You summarized my points in a very articulate manner. There is only one area where we miscommunicated. I understand that you would establish congestion corridors. I know they would be pretty autonomous. I don’t think that goes far enough. I’d like to see all taxing authority and spending decisions given to the regions. I’d like the state to “butt out”.

    Why?

    As Jim Wamsley explains in his well taken post – 1:38 PM – you just can’t trust Richmond. And if I call my Delegate or State Senator they will say that they are “bitterly opposed” to the bait and switch described in Mr. Wamsley’s post. Then they will explain that they “just don’t have the votes” to do anything about it in the GA. It’s the same “song of woe” that Vince Callahan sang for 40 years.

    Enough is enough.

    If you want to specifically tax users (i.e. drivers) in “congested areas” by means of toll – why not just put all the rights and responsibilities on the governments of the “congested areas”.

    You can’t trust Richmond.

  11. Anonymous Avatar
    Anonymous

    I suggest that, if we cannot trust Richmond on transportation matters, we also cannot trust local government (most especially Fairfax County) on land use matters. I don’t think we can trust any government official in Virginia on anything that relates to someone else’s real estate interests. That covers both zoning and transportation.

    Groveton – I’ve heard the same “song of woe” from Vince Callahan, Janet Howell and now Margi Vanderhye.

    It’s true that Fairfax County does not have the votes to control the General Assembly, but it probably does have sufficient votes to stop enabling the ongoing rip-off of county residents. Simply stop voting for anything that does not make Fairfax County residents better off tomorrow than they are today.

    But, most Fairfax County legislators are afraid of the big real estate types, the Washington Post and the gar-boons who pose as business leaders in NoVA. “We did the best we could, but we just had to pass this, that or the other bill.”

    Pass legislation authorizing adequate public facilities ordinances and I’ll call it even to date.

    TMT

  12. Larry Gross Avatar
    Larry Gross

    re: JB’s vision and Groveton’s questions..

    The post that alluded to the Coleman Bridge … tolls gets to the heart of the discussion about what Groveton has referred to as a dysfunctional and non-transparent transportation planning process.

    What happened to the traffic on the expanded Coleman Bridge once the tolls went up?

    It decreased.

    What happened to the tolls and traffic on the Rt 288 road in Richmond?

    What has the preliminary study of building a new US 460 toll road indicated?

    In each case – tolls had a negative effect on projected traffic volumes.

    Now what does this tell us about “need”?

    No go back to the 100 Billion dollar backlog and ask yourself how many of THOSE projects could successfully be operated as toll roads?

    Why? Why not?

    My point is that the current VDOT methodology of determining “need” is really a methodology for determining “demand” …

    Any road that is not tolled will get used -sure enough – that’s one reason why VMT has risen about 3 times faster than growth.

    The 100 billion dollar “backlog” is more than likely 50-75% pure pork but there is an easy way to use a litmus test on each and every one of them.

    Find out if those same roads will be “needed” if they are tolled.

    VDOT does not need to “sell” roads and as far as I know the leases have revert clauses in them if the operator bails.

    I would say – for most of the roads in the backlog – offer the option of PPTA to get the road online NOW or let it wait.

    And I think Groveton’s concern about “selling” roads is a bit too off the deep end.

    The Chesapeake Bay Bridge Tunnel was built with private investors that are recouping their investments from the tolls.

    This model does work.

    But it does require expertise in the capital markets – as much or more so than road-building expertise as evidenced by VDOT’s little problem with the financing on Route 288 in Richmond.

    then we have the concept of “pay as you go”.

    If you look at VDOT’s budget, you will see that they already have a substantial amount of debt from bonds.. that is eating up a not so small amount of their total budget.

    Last I heard, Virginia has about 3 Billion dollars worth of bond financing ability….for roads…

    The only way to boost this would be to raise taxes in a serious way 10 or 20 cents a gallon.. that would generate 500 million to a Billion new dollars annually.

    and what would that do?

    It would put VDOT back in the “ship the money to Richmond and continue the politically allocation behind closed doors methodology”.

    and the “backlog” would be so thoroughly back in business that it would probably double to a 200 Billion backlog.

    “Free Roads” is another way of saying “PORK”.

    Only when you ask “what if we toll this road” will you be able to figure out the true difference between “need” and “want”.

  13. Larry Gross Avatar
    Larry Gross

    while Virginia tries to figure out what laws are constitutional and what to do about transportation…

    the folks in North Carolina have gone forward (excerpts):

    Road group will recommend toll money

    RALEIGH — State leaders will push lawmakers for toll road money to help with the transportation crisis.

    The crisis comes as the cost to build roads continues to skyrocket. At the same time, federal funding is plummeting and fuel efficient cars mean less gas tax money.

    “I certainly hope we’ll see a recommendation for the gap funding for the turnpike projects,” Wilson added. That funding will help kickstart the building of toll roads across the state.

    http://news14.com/content/headlines/594172/road-group-will-recommend-toll-money/Default.aspx

  14. Anonymous Avatar
    Anonymous

    “One of the advantages of setting up congestion corridor authorities is that it bypasses Richmond. “

    The problem is that now you have set up a funding stream and a contituency interested in perpetuating it. Especially if the money is sidtracked to transit.

    There is no incentive to get RID OF the congestion corridor, and eery incentive to keep it as congested as possible: the higher the congestion the more you can charge.

    RH

  15. Anonymous Avatar
    Anonymous

    Getting someone else pay for it guarantees that we’ll wind up paying for a lot of inefficient projects, true enough. But the way user pays is now being promoted it simply guarantees there won’t be enough to do anything.

    And anyway, it is going to be siphoned off for transit.

    RH

  16. Anonymous Avatar
    Anonymous

    “In each case – tolls had a negative effect on projected traffic volumes.

    Now what does this tell us about “need”?”

    Well it tells us that some business works so close to the margin that we can’t afford any extra costs. These are not variable toll roads: it cost the same any time of day or night.

    So, if traffic declined, then so did business associated with the purpose of those trips.

    I suppose you could claim that if the business isn’t worth what it costs to maintain the road,then to heck with the business. Except you still have to maintain the road, and what you have lost is all the marginal business. You haven’t saved anything and lost much.

    Or, at very least, it went someplae else.

    RH

  17. Larry Gross Avatar
    Larry Gross

    Further proof that Virginia is not alone on this issue (excerpts):

    GDOT Commissioner: Projects must be cut to fit budget
    Department has money for 270 projects with 1,470 active projects on the books

    Georgia is about to undertake some painful project-cutting to fit its transportation program to its budget,

    A department that in reality has the money to work on about 270 projects a year has 1,470 active ones on its books, and more than 9,000 intended for some point in the future, she said.

    “We’re going to have to talk about projects coming off our books,” she said. “There’s no other way around it.”

    A related issue was public-private projects, in which private companies invest in public toll roads. Abraham said she is re-evaluating DOT’s plans for such projects.

    Abraham has explained the plan in speeches, saying that “to be frank about it, no one in the organization but the person you’re looking at has ever done a public-private partnership.”

    http://www.ajc.com/services/content/metro/stories/2008/03/24/dot_0325.html?cxtype=rss&cxsvc=7&cxcat=13

  18. Larry Gross Avatar
    Larry Gross

    re…”I suppose you could claim that if the business isn’t worth what it costs to maintain the road”

    Are you serious in saying this?

    Do you mean that the ONLY place that a business is selling something which no other business sells – the ONLY place such a business can locate is on a new road?

    Virginia has 57000 miles of roads.

    It’s the 3rd largest system in the entire country….

    and we’re “forcing” businesses “out of business” because we won’t build a new road?

    This is exactly the kind of thinking that goes into some .. perhaps many of the projects that are in the 100 Billion dollar “backlog”.

    when you put the ROI equation on the folks who claim economic benefits – they run and hide…

    that’s why we call it “pork”.

    and this is exactly what happens when you have a statewide gas tax and send the revenues to Richmond to be allocated – by unelected folks responding to political pressures using a process that is not transparent nor needs-based.

    everybody pays and everybody gets.

    it’s free money for whoever is quick enough to get it before someone else does….

    and it has virtually nothing to do with helping reduce congestion.

  19. Larry Gross Avatar
    Larry Gross

    Here’s Pennsylvania Agony(excerpts):

    The extreme cost of fixing bridges and highways

    So how much would you pay to get out of that traffic jam under I-95?

    And what’s your preferred form of payment? Gas tax? Tolls? Sales tax? Income tax?

    Pennsylvania has spent $3.8 billion since 2003 to repair 1,381 bridges, yet the number of structurally deficient bridges increased – from 5,600 to 6,000.

    Even with one of the highest gas taxes in the nation – and with a newly enacted plan to impose tolls on I-80 – Pennsylvania can’t keep up.

    The picture is similarly grim around the nation. States are grappling with a 50-year-old interstate highway system that cost much less to build than it does to maintain.

    Federal and state gas taxes no longer cover the bill.

    Pennsylvania’s Department of Transportation estimated last year that it would take $11 billion to fix all 6,000 structurally deficient bridges. That would represent nearly 40 percent of the state’s budget.

    Ultimately, that money will come from motorists or taxpayers, or both. – but eventually the money comes from two sources: user fees and taxes.

    In New Jersey, where the state’s transportation fund is nearly tapped out, Gov. Corzine wants to raise highway tolls by more than 50 percent every four years until 2022 to fund transportation projects and to pay down state debt.

    To those who object to such big hikes – and polls indicate that’s most New Jersey residents – Corzine says, pick your poison. The alternatives to those toll increases,

    Corzine says, would be a 20 percent rise in income taxes, a 2-cent hike in the current 7-cent sales tax, or a 50-cent raise in the gas tax.

    In Pennsylvania, a Transportation Funding and Reform Commission appointed by Rendell concluded in late 2006 that it would take a 12.5-cents-per-gallon increase in taxes to raise $965 million a year for roads and bridges. That would give Pennsylvania the nation’s highest gas taxes – 63.2 cents a gallon, including federal taxes –

    A national commission established to examine transportation needs recommended in January that the federal gas tax, currently 18.4 cents per gallon, be raised by as much as 40 cents over the next five years.

    It also called for higher state gas taxes, for increased use of tolls, and for peak-hour “congestion pricing” on highways, which would mean higher tolls during the busiest periods.

    There has been little enthusiasm in state capitals or in Washington for upping gas taxes, especially as motorists are already facing much higher prices at the pump because of rising oil costs.

    http://www.philly.com/philly/news/homepage/16932121.html

    The point of posting these articles from different states is to reinforce the reality that this is not just a Virginia issue and yes… the GA’s in the other states look just as feckless as our guys.

  20. Larry Gross Avatar
    Larry Gross

    absolutely FASCINATING article in the RTD this past Sunday:

    http://www.inrich.com/cva/ric/news.apx.-content-articles-RTD-2008-03-23-0183.html

    excerpts:

    Toll increase revives discussion
    Board’s composition resurfaces as issue for city’s neighbors

    The Powhite Parkway and the Downtown Expressway are more than 30 years old. But the tolls that were raised last week to support upkeep and pay for new technology aren’t going away anytime soon.

    “For the foreseeable future, as far as I can see, it’s going to be a toll road,” said James L. Jenkins, chairman of the Richmond Metropolitan Authority’s board, which voted 6-5 to increase mainline tolls by 20 cents.

    “At one time, I was naive and thought tolls would pay off roads and they would go away,” he said. But “until the state resolves its own transportation crisis, you’re going to look at more tolls around Virginia.”

    Many residents have voiced dissatisfaction with the increases, the first since 1998.

    “This is going to slam me big-time,” said Janiece Bernardini of Sandston, who works at a Stony Point advertising agency and pays $2 a day on the expressway system. “I find it really hard to believe they’re not getting enough money from the tolls they’re pulling from people now. And if they are, where on earth is it going? They obviously don’t take care of the highways.”

    “This summer, I’m going to sit down with a map and figure out how many ways I can get there without using the toll roads,” she said. “Then I’ll just have to try them and find the fastest one.”

    RMA’s decision to increase the mainline tolls from 35 cents to 50 cents in 1998 met fierce opposition from commuters and officials in Chesterfield County. The county convinced RMA to delay approving the increase while it had a consultant look for funding alternatives to toll increases.

    Ultimately, however, Chesterfield officials relented without offering any of their cash.

    A.S. “Art” Warren, chairman of the Chesterfield Board of Supervisors, indicated Friday that county officials won’t be bystanders to the latest toll increase.

    He questioned the fairness of a board that raises what he said are essentially taxes with no elected officials, pointing to regional transportation authorities in Northern Virginia and Hampton Roads that the Virginia Supreme Court recently declared unconstitutional for the same reason.

    “This is an RMA that’s not directly accountable to the public and controlled by one of the jurisdictions deciding to raise tolls,” he said.

    He says there’s no question that Richmond will be paid the approximately $56 million in principal and interest owed it by the RMA. But first, the RMA is due to retire by 2022 the $123 million in bond debt related to road construction and improvements.

    After that, ownership of the expressway system would be permitted to revert to the city, which, RMA officials say, could continue tolls to pay for maintenance and pay itself for the $56 million it’s owed if that hasn’t been paid back by then.

    The city is due its money 50 years from the time various bonds were issued, Jenkins said, starting with July 1975 and most recently with 1991. That means the first payments to the city are due by 2025 and the last one by 2041.

    RMA officials say the toll increases are needed not only to pay off debt but also for continued maintenance and improvements.

    Robert M. “Mike” Berry, the RMA’s general manager, cited such past improvements as the implementation of the Smart Tag/E-ZPass electronic tolling, major renovation of the Boulevard Bridge in the early 1990s and the widening of the James River Bridge. “We now have a 10-lane facility across the river,” he said.

    RMA projects $80 million in maintenance and improvements needed in the next decade, including resurfacing several bridges and plans for high-speed, no-barrier toll lanes on the westbound Downtown Expressway. Those same kind of lanes are scheduled to debut on the Powhite Parkway — three in each direction — this summer.

    “If you are successful, one of the reasons you’re successful is because you reinvest in your asset,” Berry said. “Nothing’s static.”

  21. Anonymous Avatar
    Anonymous

    “Do you mean that the ONLY place that a business is selling something which no other business sells – the ONLY place such a business can locate is on a new road?”

    Where and when did I ever say such a thing?

    My comment was directed to a road that is full, or nearly so, or a road that is tolled without regard to congestion, as the case with the bridge.

    Once you set or raise those tolls, traffic decreased. That is a given. As a result, whatever business drove those trips decreased, even if the “business” was only visiting granma.

    Therefore, once you set a price, you will knock out all those businesses for whom the value is marginal. In other words, if the value of the business isn;t worth as much as the cost of maintaining the road, maybe the business isn;t worth having.

    OR

    like your other example, people will look for some other way, or relocate, as the HOT lanes are projected to do.

    I think we have plenty of unused or little used miles of roadway, and the smart thing to do is encourage people to use them.

    HOT lanes and other tolls will encourage that, sure enough, but I think it is a terribly inefficent way to achieve that result.

    Your argument continues to be that no one is in favor of gas taxes so we can’t get more money to build/repair roads that way.

    Therefore, the only way we can get the money is to extract the same money from a smaller group of users.

    This makes no sense to me.

    Particularly when the money you extract, isn’t even going to be used for roads.

    You are going to extract this money, spend whatever the contractors don’t get on VRE.

    And still have bridges falling in the rivers and worse congestion and pollution than before.

    RH

  22. Larry Gross Avatar
    Larry Gross

    see you .. think.. that any/all “business” has a right to be conducted.

    my view is that there is a “cost” to business being conducted and I’m using the wider definition that you are .. like visiting grandma…

    the issue is.. if visiting grandma and other equivalent activities are utilizing highway capacity to the point where everyone – regardless of how important their business is – is harmed – and there are limited ways to add capacity…

    then more money has to be collected to either expand capacity.

    so.. should you collect that money from everyone including those who do not use that road – to try to expand that road – and do nothing but further incentivize the “grandma” business…

    so you end up with the same problem you had before except now you don’t have a way to expand capacity…

    then what is the answer?

    your answer to this is what?

    last I heard you wanted to pay people to carpool.. but you did not say where that money would come from…

    your solution – involves – first – taking money from someone.. though you’ve not said who…

    .. and further.. your solution incentivizes and rewards the grandma traffic (since folks who do this kind of “business” do not carpool”….

    so your solution actually incentivizes the wrong folks…you reward … frivolous use and penalize those who have real business needs….

    and you leave the folks with real business needs.. no way to get relief for their needs…

    The guy that has to get to an important meeting ..then leave for the airport…

    there is no relief for him…

    but the guy that wants to visit grandma at the height of rush hour is still allowed to use road capacity.. at the absolute worst time…

    what the HOT lanes do – is to let EACH driver decide just how important their travel is on a particular road at a particular hour.

    for those whose trip is absolutely essential..they can decide how much that trip is worth to them.

    for those whose trip is not absolutely essentially.. and, in fact, is almost the opposite -they too can decide just how much that trip is worth to them.

    In BOTH cases – they both have the same equitable choices and it is up to them to determine the worth of their trip.

    In your solution – you (the government) is the one deciding whose trip is important and whose is not…

    Your solution presumes that you know what the value of the trips are and you decide who to incentivize and who not to.

    The bottom line is that you – as the grand poobah “decider” of which traffic is “important” do NOT know which trips are important and which ones are not – and you’d have no business deciding.

    the proper, fair, equitable way is to “price” the trips and let people decide if the price is worth it to them.

    some will decide that it is and some will decide that it is not but they’ll all have the same choice.

  23. Anonymous Avatar
    Anonymous

    “see you .. think.. that any/all “business” has a right to be conducted.

    my view is that there is a “cost” to business being conducted and I’m using the wider definition that you are .. like visiting grandma…

    the issue is.. if visiting grandma and other equivalent activities are utilizing highway capacity to the point where everyone – regardless of how important their business is – is harmed – and there are limited ways to add capacity…

    then more money has to be collected to expand capacity.”

    You are absolutely correct.

    And, no, I do not think that any business has a right to be conducted.

    But

    What I am saying is that as soon as you use tolls to collect money, then YOU are deciding what business can be profitabley conducted and what cannot.

    Therefore

    When you set the toll rate, particularly for variable rate HOT lanes, you must balance the value of setting the toll for maximum throughput, which lowers the cost of doing all business, and maximum revenue, which promotes those doing the most valueable business.

    What I was saying was just what you are saying: tolls will put some people out of business, and it will be the ones whos business has the least profit.

    I made no comment as to whether this ws a good idea or a bad idea.
    That depends on the value of a few really good businesses, compared to the value of many marginal ones.

    Plus the value of visiting granma.

    RH

  24. Anonymous Avatar
    Anonymous

    How much gas is your time worth?
    From CNN.com:

    In a typical family sedan, every 10 miles per hour you drive over 60 is like the price of gasoline going up about 54 cents a gallon. That figure will be even higher for less fuel-efficient vehicles that go fewer miles on a gallon to start with…

    Engineers at Consumer Reports magazine tested this theory by driving a Toyota Camry sedan and a Mercury Mountaineer SUV at various set cruising speeds on a stretch of flat highway. Driving the Camry at 75 mph instead of 65 dropped fuel economy from 35 mpg to 30. For the Mountaineer, fuel economy dropped from 21 to 18.

    Over the course of a 400-mile road trip, the Camry driver would spend about $6.19 more on gas at the higher speed and Mountaineer driver would spend an extra $10.32.

    So my inner economist asks: Is it worth it to drive 10 mph slower to save $6.19-$10.32?

    According to my calculations that 400 mile trip takes an extra 49 minutes. So another way to ask the same question is: are you willing to pay $6.19-$10.32 to save 49 minutes of travel time?

    Or yet another way, is your time worth more or less than $7.57-$12.64/hour?

    Environmental economics blog.

    Now, what is the relevance of this post? The whole idea of HOT lanes is to ave time for a few people whose time is worth a lot.

    They should be willing to pay us for allowing them that privilege, at some countervailing expense to ourselves.

    The question is, what are the trade offs, and whose property rights are worth how much.

    ——————————–

    the proper, fair, equitable way is to “price” the trips and let people decide if the price is worth it to them.

    some will decide that it is and some will decide that it is not but they’ll all have the same choice.”

    I would agree with you, if the same logic was applied to every trip.

    Here is where your logic fails.

    In a free market, there is SOME relationship between cost and price. There is another relationship between demand and price. There is a third relationship between price and supply.

    We tend to think of thes all together as the free market.

    But in your case, we are electing to price only those roadways which have the highest demand. And we are doing that after thirty years of refusing to increase supply.

    What wea re looking at here is really two markets. One is the market for traveling on roads. and the other is the market for supplying roads.

    The people who supply roads have decided that the price isn’t high enough. They want to increase the price through tolls.

    That would be fine if the tolls were used to increase supply, but we both know that isn’t going to happen.

    Instead, we will use the tolls to pay for people to travel some other way.

    This is similar to the railroad barons at the turn of the previous century. They charged their customers for hauling their freight on other people’s railroads.

    ————————–

    So, you, as the grand pooh-bah of tolls are deciding that tolls should be charged ONLY where demand is highest, and ROI on road investment is highest, and NOT where cost is highest, and ROI on road investment is lowest. You are totally ignoring two out of the three parts of the free market love triangle.

    I don’t have any problem whatsoever with congestion pricing or HOT lanes.

    What I’m telling you is that it is only the itsy bitsiest, teesny weensy, and most idiotic part of the total solution.

    You are missing the point that in the big picture, we will ALL save alot more money by shutting the HOT lanes down and making them unnecessary, than we will EVER get out of the tolls after maintenacne and operating costs (including those of the drivers).

    The idea is to STOP heroic commuting, not to make money off of it.

    (Flash to Alec Guiness in Bridge on The River Quai: “What have I done?”)

    Got that?

    No go back to the drawing board and punt. When you get an idea that works, I’ll let you know.

    RH

    RH

  25. Anonymous Avatar
    Anonymous

    In a nutshell, what I’m saying is that bvefore you go pocket that hypothetical $2.5 billion, youneed to subtrct out the loss of all tha marginal business that won’t survive on account.

    I’m not saying that those businesses have a “right” to survive. I’m saying you are wrong to claimthe entire $2.5 billion as a “benefit”.

    Nobody, so far as I know, is looking at the “other” or “external” costs.

    If we, as environmentalists are going to claim every possible external cost when promoting tariffs against another, then we need to equally (and no more) consider the external costs of the tariffs.

    RH

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