Bacon's Rebellion

Democracy Thrives in Sunlight

Only Two Words Suffice: Holy Moly! Make that Three Words: Holy Friggin’ Moly!

—

by

James A. Bacon
in ,

midtown_tunnel

Portsmouth Circuit Court Judge James A. Cales Jr. ruled Wedesday that the state’s $2.1 billion public-private partnership deal for the Downtown-Midtown Tunnel project is unconstitutional. Reports the Virginian-Pilot:

Cales said in his ruling that the General Assembly exceeded its authority in giving VDOT “unfettered power” to set toll rates under the 1995 Public-Private Transportation Act. The decision was a blow for Gov. Bob McDonnell and Attorney General Ken Cuccinelli, whose office defended VDOT against the lawsuit.

The ruling surely will be appealed to higher courts. If upheld, it would threaten the state’s ability to use public-private partnerships to build major transportation projects and, according to attorney Patrick McSweeney, it could hurt the state’s credit rating. McSweeney led the successful campaign several years ago to create regional transportation taxing authorities and participated in a legal bid to derail the Rail-to-Dulles project.

The McDonnell administration will seek a stay from either Cales or the Virginia Supreme Court, allowing work on the project to continue. Elizabeth River Crossings has spent $348 million on the project so far, as of March 31.

Bacon’s bottom line: Holy friggin’ moly!

— JAB

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42 responses to “Only Two Words Suffice: Holy Moly! Make that Three Words: Holy Friggin’ Moly!”

  1. DJRippert Avatar
    DJRippert

    Message from NoVa:

    Congratulations to our brothers and sisters in Tidewater. Yet another Richmond-based scheme to fleece a small percentage of Virginians to pay for something most Virginians get in return for their taxes has been defeated. As usual, Cuccinelli shows himself to be no more than another sniveling Richmond insider perfectly willing to give the un-elected bureaucrats of VDOT limitless power to selectively tax some Virginians under the guise of tolls.

    If the Imperial Clown Show in Richmond wants to tax certain Virginians for the right to drive then the Clown Show can take a proposed amendment to the Virginia Constitution to the people as is required by law. Hiding behind the nameless, faceless bureaucrats of VDOT (or the MWAA for that matter) is immoral, cowardly and illegal.

    In a state that spends about 10% of its budget on transportation it is unacceptable to claim that transportation cannot be funded by taxes.

    If localities need to fund their own roads through taxes or tolls (no difference, really) then localities should fund their own schools, jails, law enforcement, Medicaid, etc as well. The state government can be redirected to working on matters within its competence zone, such as picking a new state song.

    The Republican Party of Virginia has lost NoVa and is well on its way to losing Tidewater too.

  2. reed fawell III Avatar
    reed fawell III

    My thoughts exactly.

    Rather than courageously confronting the root of state and local problems, high elected officials conjured up the means to avoid them. Thus they jerry rig schemes to coverup and delay real solutions by shuffling the problem off to government bureaucracies and private sector sharp operators. The main qualifications of these private sector sharpies is the skill to work and milk the system rather than perform any task that solves real problems.

    Thus our elected government officials add insult to the injury. They inflict ever more illicit pain on those they were elected to serve, not fleece. To it this, our elected officials dream up ever more new ways to pass the buck to bureaucrats and private sector sharpies who are then armed with ever more new ways to soak the citizens of the Commonwealth using disguised taxes. These ill gotten monies are then spent to whitewash the disingenuous conduct and cowardly behavior of their masters.

    Their masters meanwhile are working madly on their next follow on gambits, to keeping pass the bucks till it all explodes the next generation.

  3. Breckinridge Avatar
    Breckinridge

    I thought they were just trying to expand a rather vital tunnel with a second tube. Previous comments seem a little over heated. Just about every other major bridge and tunnel project in Hampton Roads has been (or still is) tolled. As have been (and still are) several river crossings in Richmond. You’d think this tolling thing was a new idea.

    The judge issued an oral ruling with little explanation, perhaps knowing that whatever he ruled would immediately be stayed and appealed to the Supreme Court of Virginia. But apparently there was great focus on the deal’s reliance on tolls on the Downtown Tunnel which was NOT being improved, and was mainly being tolled to 1) raise more money and 2) reduce the economic incentive to avoid the Midtown Tunnel.

    Should the General Assembly have approved all this? That would have been easier to defend in court. I think the franchise granted was quite sweet for the developer (especially that guaranteed ROE), but the bottom line remains that the state does not have the scratch or room on its credit card so the choice appeared to be private capital or doing nothing, and doing nothing is not a good option.

    The SCOV will likely hear the case by September and decide well before the Assembly elections. A ruling by a retired circuit court judge who didn’t even take time to write an opinion is just a start of the discussion.

    1. DJRippert Avatar
      DJRippert

      My comments were somewhat tongue in cheek – “our brothers and sisters in Tidewater”.

      However, Virginia is not a low tax state. The top income tax rate (5.75%) is higher than the top rate in 19 other states. The starting point for that top rate ($17,000 per year) is lower than just about every other state. One of the very few things that the state government does that benefits virtually every citizen is building and maintaining roads. This costs about 10% of the state’s total spending and the state seems very inept at this function. If the state needs to make transportation 15% of state spending – that’s what the state should do. These arbitrary, Rube Goldberg tolling schemes are absurd.

      Where are the tolls on the Charlottesville Bypass?
      Will the proposed Rt 460 be a toll road?
      Are there tolls on the rebuilt Wilson Bridge?
      Why did the state cave in to the trucking industry with regard to Rt 81 tolls?

      Either directly charge everybody to drive or don’t directly charge anybody.

      For all the endless whining about how building roads will bankrupt the state, it’s still only 10% of the state’s annual spending (as far as I can tell, anyway).

      1. larryg Avatar
        larryg

        re: tolls on other roads ..

        actually more and more … US460 will be tolled as well as any kind of outer beltway, as well as I-95 to Stafford/Garrisonville…

        in my mind the Cville bypass SHOULD have had tolls on it but it would have ended up like the ICC in Maryland… a losing proposition although one can argue that a losing proposition for a toll road is going to be LESS than the same road without tolls that uses state funds – i.e. taxes.

        tolls without toll booths is a game changer.

        we are fast approaching a time when most people will have a transponder in the windshield and my understanding is that they are working on a toll application for smartphones so in the future you may not even need a transponder.

        In fact, you don’t even need a transponder right now since license plate readers have become technologically mature.

        Tolls are the way to manage congestion as well as generate money for maintenance and to build up funds for improvements and even new roads.

        they are a much better user fee than taxes in that people only pay if it is worth it to them whereas with taxes, especially if you are some poor schmuck in RoVa – they tax you then give it to another jurisdiction!

        toll are happening – they are going forward. This time next year, we will be getting very close to extending the HOT lanes on the beltway south to Stafford County and then by 2017 to Fredericksburg.

        take a trip down I-95 south and look at the median – it is being transformed into additional lanes very quickly.

  4. Neil Haner Avatar
    Neil Haner

    Major renovations to the Downtown Tunnel are a part of the job as well, and can be used to justify the tolls on that crossing as well (even if they’ll take in the bulk of the revenue while the Midtown gets the bulk of the work).

    The problem the article seems to highlight is the lack of any nearby non-tolled alternatives. In Richmond, while the Powhite Bridge is tolled (as is the Nickel Bridge), you can still cross into the city via bridges on I-95, Hugenot Rd, 9th st, 14th, and Belividere. Norfolk, however, would be left with no realistic alternatives.

    Similarly, with the new 460 express highway, drivers can just take old 460 to save the cost. Ditto the Chesapeake Expressway tolls being bypassable on Battlefield Blvd.

    All three crossing from Norfolk to Portsmouth would now be tolled (the 3rd being the new PPP South Norfolk Jordan Bridge), and drivers would either have to use the Hampton Roads and Monitor Merrimac Bridge Tunnels via Newport News/Hampton, or go down to the High Rise or Gilmerton Bridges in Chesapeake. Calling them “reasonable” alternatives insult the intelligence of the general public.

    This is the rare example I can think of regionally where tolls cannot be easily bypassed on local roads.

    With that said, legally, I have no idea if that matters. I leave it up to more informed readers to fill in what legal obligation the state has to leave non-tolled alternatives available to drivers.

  5. larryg Avatar
    larryg

    not sure what the legal distinction of “unfettered power” is but you can’t squeeze more transpo money that is actually available and the ludicrous idea that folks in RoVa are going to give up the little bit they already have in a futile effort to provide more rush hour capacity for NoVa and HR just is not going to happen.

    so if the ruling holds – then chances are there are not going to be any more tunnels. That’s the choice – tunnels and tolls or no tunnels. there is no other money even if RoVa was so inclined – you’re talking about trying to get big time transpo money out of one or two million rural Virginians who do not live in the urban areas.

    you cannot solve the congestion issues by building more infrastructure – all that does is unleash the latent demand.

    the only way to solve this problem is to use tolls to manage capacity.

    tolls can “shape” the congestion much more effectively than trying to add capacity piecemeal over decades.

    What we lack here is numbers.

    If you added up all the money that HR generates in gas taxes for the region, would it be enough to build new tunnels?

    say you got a million drivers and each one pays about $300 a year in gas taxes.
    that’s 300 million to pay for existing maintenance and operations and how much left over to buy new tunnels?

    I doubt that you’d net 50 million a year to pay back bonds for tunnels.

    the numbers just don’t work and Richmond does not have a hidden vault of money and the non-urban RoVa is likely about 2-3 million population tops and you can bet they’re not going to be donating their gas tax dollars.

    tolls are going to be the answer. the only question is when do people admit it.

    1. DJRippert Avatar
      DJRippert

      People in RoVa may not have much of a choice if the Clown Show continues to toll the urban and suburban parts of the state into a frenzy.

      Go back and look at the presidential election map of Virginia from 2012. Lots and lots of blue counties. But Obama won.

      North Carolina somehow managed to get to a 34 cent gas tax. I’d guess a lot of that money goes to RTP and Charlotte. Perhaps the good people in rural and small town North Carolina have enough sense to avoid killing the geese that lay the golden eggs.

    2. DJRippert Avatar
      DJRippert

      People in RoVa may not have much of a choice if the Clown Show continues to toll the urban and suburban parts of the state into a frenzy.

      Go back and look at the presidential election map of Virginia from 2012. Lots and lots of red counties. But Obama won.

      North Carolina somehow managed to get to a 34 cent gas tax. I’d guess a lot of that money goes to RTP and Charlotte. Perhaps the good people in rural and small town North Carolina have enough sense to avoid killing the geese that lay the golden eggs.

      1. larryg Avatar
        larryg

        re: gas tax increase. we just got a gas/sales tax increase right? did it change the toll plans for HR or NoVa?

        do you really think another increase is going to happen anytime soon?

        the problem with NoVa and HR is that even if you build more capacity, it will be almost instantly consumed by the latent demand and tolls are the only way real to manage the congestion. you have to start putting a direct user fee on each trip so that each person will consider the cost of each prospective trip.

        it’s no longer about taxes because taxes are not going to deal with the real issue of how much capacity we can afford to have verses how that capacity gets consumed. Without tolls, it’s a permanent losing proposition for places like NoVa and HR.

        There really is no amount of money that RoVa could pay to actually alleviate the problem because the demand is basically insatiable.

        tolls are becoming the de facto congestion management tool.

  6. reed fawell III Avatar
    reed fawell III

    Responding to Breckenridge’s earlier post re overheating:

    Sometimes comments seem a overheated because we’d grown far too accustomed to our own bad habits. Then we cannot see how overtime those bad habits enlarge and twist themselves out of shape in ways that put us finally on a road to our own failure, producing catastrophic results.

    This lesson we never seem to learn. I suggest that now this public private financing of roads, tunnels, and bridges, and attendant private assumption of essential government functions may be growing out of control.

    And that, in so doing, these ever more complex public private transactions are twisting our state and local governance institutions and private enterprise structures out of shape, leading us into catastrophic events.

    This is happening right now in government financing of student loans, despite the very recent US financial collapse sparked by public private manipulation of the housing market. So we never seem to learn.

    See Playing with Other Peoples Money article on this website. Here’s a shortened and edited version on one long comment below that article.

    “Private enterprise is no more moral that government. Out of control experts can be found in abundance everywhere. They work for governments and private enterprise too. Indeed many private enterprise experts work for government for lots of money. And the successful ones learn how to work the system, how to win low bids and flip them into maximum profits. Unfortunately today’s financial realities can easily acerbate this all to common and current government, expert and private sector overreach.

    Take, for example, how non-govt investment rating agencies told non-govt Banks that sub-prime MBS were “prime” investment grade securities?” This rating agency debacle is example of experts run amok, driven largely by government mandates. Muni bonds being only one of endless examples.

    But where things most likely get bent out of shape is where politics enters the marketplace to achieve political results. In the case of sub-prime mortgages it was Fannie Mae following the dictates of its political masters.

    In short, a creature of the Federal government, Fannie Mae, was captured by Congressional politics. Congressional mandates shoved Fannie into the business of using its credit to guarantee sub-prime mortgages that were securitized then sold to the public until ever more and ever riskier loans polluted the nation’s pool of home mortgages and the scheme collapsed.

    This is a long story. But one could see the risk of these structures being guaranteed by Fannie long before the sub-prime debacle. Real estate is unique. It’s unlike other assets typically used for security. It’s very local and peculiar insofar as its quality as security of loans. So it’s properly the business of local lenders familiar with the unique nature of their local market. Hence the first multifamily Wall Street securities wrapped by a Fannie Mae Guarantee done in the early 1990′s which involved mixing “sub and prime mortgages” from across the nation raised red flags among those knowledgeable about real estate by reason of real experience. But the Wall Street folks, whose black box computer models and endlessly complex esoteric financial structures comprising multiple levels of risk (differently priced tranches cutting across thousands of loans) were untethered to the dynamics of the real estate securing them, could not see the risks.

    Nor would anyone see the risks – not the government regulators, the Congress, Fannie Mae, Wall Street, the rating agencies, lawyers and appraisers, bundlers and mortgage closers and brokers. Nobody would listen or act responsibly. Too much pride, too much political influence, to much political posturing and agenda, and to much money, was involved.

    And, of course, as always happens the crooks (smelling blood on the water) arrived for the killing. But this happened mostly later. Still, from the get go, people were making tons of money for getting these troubled assets off the books of troubled lenders as required by yet another government program of 1990′s regulations, so everyone forged ahead.

    Money corrupts. So experts began to run amok, fueled by the fact that the experts creating the problem earned huge fees doing it before they offloaded the “hidden risk” to the public. Fannie Mae provided the perfect cover, giving triple A credit to less than triple A product. Thus a federally created program that for decades had built a liquid highly efficient mortgage market for properly underwritten home loans that was rightfully the envy of the world, was hijacked.

    The problem was further turbo-charged by more politics and government intervention. The ruse behind this maneuver was as American as Apple pie. Every citizen gets to own a home of his or her own, irrespective of their ability to pay for it. (a simplified overstatement but not by much.)

    Of course, Wall Street and conduit bundlers of sub-prime loans (all private) were only to happy to jump in, make a bundle, then offload even more junk onto the public, leaving Fannie Mae holding the bag by reason of its federally mandated guarantee.

    It was a perfect deal by Federal government and Wall Street standards. The politicians got all the credit. Wall Street and conduits that packaged the mortgages got high risk free cash profits up front. The taxpayer got the shaft (gigantic losses) in the back. The sub-prime homeowner got his own bankruptcy by reason of his federal government feeding him and/or her financial crack cocaine, all for political advantage.

    One great tragedy was the near ruination of Fannie Mae, which up until the early 90s was a poster child of successful government at work. The benefits that Fannie brought to this nation are incalculable. One can say this institution, as much as or more than any other, brought the American Dream to the the American people. Every credit worthy family got a home of their own, one they could afford, from a starter home, right up the ladder. No other country enjoys the success that Fannie Mae created for us. But how easily even the greatest of Federal government programs can be twisted out of shape, and then used for purposes that poison the financial health of a nation, its individual families and citizens. And this poison goes right to the core of the American dreams, our homes.

    And, while private companies, more often than government, put the brake on experts taking undue advantage, and private companies typically cannot afford to go broke, those rules get blurred if private companies get tangled up with government regulations, mandates, and guarantees that twist these iron rules of private enterprise out of shape, and so thwart the rules of free enterprise functioning within a properly regulated marketplace.

    Here the problem started in the 1990’s after long success when Multi-family securitization by Fannie Mae began to include the bundling big commercial individual mortgage loans (each secured a rental housing project) with weak credit into packages of stronger loans, matching risks, to get the weaker loans off the books of troubled S&Ls as defined by federal law.

    So here a government bail out program began to twist the market. It was also a logical first step to later securitizition of INDIVIDUAL home loans by mixing sub prime individual loans in with prime loans, and selling them off together. The practice, fueled by politics, driven by political influence, and the politicians need to get himself reelected, quickly began to fed on itself, growing with each election, and ever higher profits for those who could offload the debt, under the cover of a federal guarantee.

    The gigantic failure that resulted shows how gov. intervention as a player in the marketplace, tilting free markets to government mandated results, so often results in unintended consequences, often catastrophic ones. ”

    — Bottom Line —

    The above example shows how a Government that inserts itself as a chronic, deep, and continuous player in free markets can easily blow up the market. Obviously, the fact pattern of roads, bridge, and tunnels differs quite a bit. But I suggest that when a society and/or its government encourages its private business sector to become a chronic, deep, and continuous player in the historic tasks of public governance, that society and government is also playing with fire. One that can easily flare out of control.

  7. Peter Galuszka Avatar
    Peter Galuszka

    Jack Cales, huh? Remember him from his days as a prosecutor.

  8. Hokie Avatar
    Hokie

    According to FHWA, the breakdown of contributions to the $2.089 billion price tag is as follows:

    Senior Debt (Private Activity Bonds) – $675 million
    TIFIA loan – $422 million
    Equity Contributions – $272 million
    Public Funds – $408 million
    Toll Revenues – $268 million
    TIFIA Capitalized Interest – $43 million

    1. Of the $2 billion price tag, the Commonwealth’s contribution is already $408 million and the Feds kicked in a $465 million TIFIA loan. That’s already $873 million.
    2. In fact it seems the only costs the private entity was on the hook for were the “Senior Debt” and possibly “Equity Contributions” (these terms confuse a lowly engineer such as myself), which add up to $947 million.
    3. The operators were guaranteed a 13% profit. If instead of their contribution, the state was able to finance bonds at even half that interest rate, 6.5%, I estimate the Commonwealth could save an additional $120 million.
    4. I don’t think any rational person in HR is opposed to tolls on principle. In fact, I think the people of this region may historically be the most accustomed to them. Put reasonable tolls on the crossings. Something along the lines of $.25 or $.50 for off-peak and double it during the peak period.

    In conclusion, once you really drill into the numbers it becomes slightly curious why a private partner was needed in the first place. It seems at least on the surface that an improved, state-owned, tolled facility is possible despite the Commonwealth’s financial distress. The question remains whether this ruling will hold up in the SCoV. I suspect not, as affirmation of this ruling could serve as precedent for dismantling of the entire law.

    1. reed fawell III Avatar
      reed fawell III

      I am glad we’re looking into the numbers. I hope others do too, including Don. These numbers will tell quite a tale for sure.

      And another thing is for sure. Any Government that can’t build and maintain its roads, bridges, and tunnels, is severely broken. Such a government that fails its citizens on such a basic level is not worth having.

      The fact that we are talking about the USA here, a country that just a few years back was the richest nation in the history of the world. is astounding.

      And have you read the latest? Soon more Chevrolets will be built in China than in the USA. Who would have guessed that ten years ago. But, of course, without roads, we won’t need Chevys any more anyway.

    2. reed fawell III Avatar
      reed fawell III

      Also, I agree with you on the toll issue. That’s not the main point here.

    3. reed fawell III Avatar
      reed fawell III

      “The operators were guaranteed a 13% profit.”

      I wish someone guaranteed me a 13% profit as an “operator.”

      I suspect that the “operators” in Virginia always get rich, irrespective of whether the Public / Private road, or whatever, they “operate” goes flat broke.

  9. reed fawell III Avatar
    reed fawell III

    The Judges’ ruling points to the issue of government overreach. This overreach is a growing problem. What is happening here is this.

    1./ government spending is now outstripping government taxing systems.
    2./ government refuses to address the spending problem by cutting back waste, eliminating programs that do not work, or streamlining those that do.

    So what is the alternative beyond taking heat for raising taxes yet higher?

    One alternative is for government to monetize public assets. These are assets under it control. Things that citizens have paid for thought taxes.

    Likely there are many ways to monetize these public assets. One way to do this is to charge for using public assets that were heretofore free.

    So for example, DC is looking for ways to charge for parking on public streets in residential neighborhoods. Non residents using metro pay X. Plumber doing repair on house or babysitter pays W. Some propose the owner of the house fronting the street pays Z.

    This charging for public street parking in residential neighborhoods as if it were a private parking lot is supported not only by some locals officials but also by those trying to shut down cars in the city. To do this government needs a private company to finance, build and operate a high tech system if it is to hijack of publicly funded residential streets for parking fees. The private company charge big fees up front for a host of services and then percentage cuts for operating the system with the government getting the rest. Its built on radar ticket model being used to collect big revenues.

    This in time will skyrocket costs all around in ways to numerous to mention here. But start with plumber and baby sitter charges to lost revenues of those moving out of the city, leaving ever fewer people in the city to pay ever higher government expenses under such a regime. Same for impossible tolls getting into and out of the city or to work.

    So this is only beginning. My point is that this Newport News transaction should not be looked at in the typical way. Rather its the canary in the coal mine, a harbinger of things to come.

    Like of example, in DC and Maryland and likely soon in Virginia too, you cannot put what you buy in a plastic bag without paying a nickel tax. Everywhere you turn likely soon their will be more fees to pay, or charges of all sorts, given what our governments are going to have to do so long as they refuse to act responsibility to change their spending and governing habits.

    And in so imposing these charges those governments are going to levy the highest charges on our activities they disfavor the most. Now the time has arrived in our National Capital where likely soon it will become ever more costly to own and park your car because the government needs you money to pay its bills. Although the excuse is that driving in the city is a bad habit.

    We see this now happening with all our out of control institutions. Its the same script for higher education that refuses to change its ways too. As its cost rise, it finds every more ways to soak its students, and taxpayers. Where will it end? We now seem unable to hold people in responsible places accountable.

  10. larryg Avatar
    larryg

    The TIFIA are loans that have to be paid back and almost always a TIFIA loan is paid back with tolls.

    How much the tolls are – are not what folks believe is reasonable but what it takes to pay off the debt.

    I find it amusing that people did not have same sense of outrage when the CBBT was built – and had, of necessity, a high enough toll so as to pay off the bonds.

    what the numbers show is that Va does not have the money to build the tunnels UNLESS bonds are floated – that have to be paid back.

    Reed compares this to student loans but this is the very opposite because ultimately the people paying for the road are the people who use it – and no subsidies save for the loans. the proper comparison would be student loans where the student has to pay back all of it with no taxpayer subsidies.

    then Reed, as usual, takes something like Tolls – which have been around a long time even in Virginia and turns it into a prediction of an American Apocalypse …. the ruin of American… because there will be tolls on tunnels and student loans… geeze Reed!

    Chevrolets in China? I thought it was Obama was a “socialist” for bailing out GM ?

    I think we can safely discuss the merits of tolls without worrying about the demise of American myself.

    1. reed fawell III Avatar
      reed fawell III

      Actually, Larry, soon all of General Motors Divisions will likely be making and selling more cars in China than in US, sucking jobs out the United States.

      Secondly, nobody disputes the need in some limited circumstances for tolls. That is a red herring in this discussion.

  11. larryg Avatar
    larryg

    re: government “overreach”.

    what realistically is the alternative to adding new tubes to the HR region WITHOUT govt involvement?

    is there a feeling that Va has the money but just wants to screw the good folks of HR?

    what should Va do instead? Should they just get out of it altogether and put out an RFP and if no one answers it, just walk away?

    what should Va do?

  12. Darrell Avatar
    Darrell

    What should VA do? Well for starters they could try following the state Constitution. See, this is why I quit voting for republicans. They always have to sneak around in the shadows and abuse their power.

    The damn tunnels were originally put together by a GA created Tunnel Commission, JUST LIKE THE ONE THAT LATER BUILT THE CBBT. A political subdivision of the state, not some good ole boy hook up. The obvious answer to the tunnel should have been for the GA to re-create the commission…or maybe think regionally by expanding the Chesapeake Bay bridge commission to be responsible for ALL the bridge tunnels instead of the local TPO mayors.

    Unfortunately it’s probably too late for that. Toll revenue bonds would create a problem for the state budget, especially if this whole scheme blows up. The idiotic tax plan the GA just passed sucked dry the citizens cash and positive support for any future projects. And what investor would take a risk on any bonds coming out of Virginia or it’s cities after this debacle? The only positive I can see coming out of failure is it would be a fitting memorial for all the local my way or no highway politicians who Third Crossed citizens and investors alike.

    1. larryg Avatar
      larryg

      re: ” The damn tunnels were originally put together by a GA created Tunnel Commission, JUST LIKE THE ONE THAT LATER BUILT THE CBBT”

      was putting tolls on the CBBT the right thing to do or should have RoVa paid for the CBBT?

  13. reed fawell III Avatar
    reed fawell III

    DARRELL, you said; “originally put together by a GA created Tunnel Commission, JUST LIKE THE ONE THAT LATER BUILT THE CBBT. A political subdivision of the state, not some good ole boy hook up. ”

    Darrell, could you elaborate on how “some good ole boy hook up” works in Va? And also how it might be at play on this Hampton Roads project, or some other project in your region, or elsewhere in state? For example, I take it that a “good ole boy hook up” is a good deal less formal than the Tunnel commission, a political subdivision of state, yet gains state benefit.

  14. larryg Avatar
    larryg

    the interesting thing about the folks who built and operate the CBBT is that they are faceless and unelected…..much like other organizations that we typically rant about.

    http://www.cbbt.com/history.html

    so my question is how is this such a seemingly well operated organization that as far as I can tell does not cost the taxpayers of Virginia, including RoVa one red penny… and it is solely paid for only by the people that use it.

    why is that not a good way to operate any tunnel or bridge in Virginia?

    special question to Reed: Is the CBBT “overreach” of govt?

    special question to Darrell: Would a CBBT type organization be better than the current HR MPO – and why?

    1. Neil Haner Avatar
      Neil Haner

      Any Midtown/Downtown tunnel project, be it state, private, regional MPO, etc, that involves tolls is going to get massive pushback, far more than in any other case of a tolled road in Virginia, for one major reason: they are installing tolls on existing, currently free crossings.

      Think about it: tolls on the CBBT, Chesapeake Expwy, Downtown Expwy and Powhite, Coleman Bridge, Pocahontas Bridge, etc… all were originally part of the highway or bridge.

      Tolling the Downtown and Midtown, in the eyes of the average Norfolk or Portsmouth resident, is an ex post facto levy. A Portsmouth resident took a job in Norfolk 5 years ago under the assumed condition that their commute was toll-free… and now the state/ERC/ has pulled a bait-and-switch.

      No one would care if they were building a brand new crossing and tolling that (as they did to the Jordan Bridge, which no one used or uses anyways), because the poorer commuters would still have the old free tunnels to rely on. But instead, they’ve wiped out all free, reasonable crossings from Portsmouth to Norfolk without any local government officials having to vote on it.

      1. reed fawell III Avatar
        reed fawell III

        This comment of Neil’s goes to the heart of the matter. Why the issues raised here with the HR MPO are not all about “Business as Usual.” Nor is it all about taking advantage of new unexpected opportunities. Rather, to a material degree, its about fixing shortcomings in a current system of building public infrastructures, and doing so in a fair effective and long term way.

        The 1965 article noted below by john davis raises some of these concerns. And alludes to the Robert Moses model of regional authority. So its useful on a number of fronts, although it deals with a structure that strikes me a far more serious and efficient and far less prone to abuse than the current HR MPO structure might suggest.

        Given the direction of current State finances, these issues appear to be of growing importance. I wonder if there’s a serious study is out there on the real time experience with MPO structures.

        1. larryg Avatar
          larryg

          part of Darrell’s heartburn is about the concept of a regional MPO that is essentially controlled by the elected officials from each jurisdiction that is a member of the MPO.

          this is the situation with virtually all MPOs in the USA. MPOs are relatively new critters that require regional cooperation and consensus on projects regional in nature and many people do not like this idea but this is the way it’s going to be and if you think about it – you simple cannot get forward progress these days on infrastructure that encompasses regions rather than just local jurisdictions.

          the NoVa region is running off the same structure – MWCOG and the TPB…that’s where all regional road planning is done.

          Each region receives a Federal and State allocation of funds and each region has to develop a long range plan that is fiscally constrained – it cannot contain any projects that do not have identified funding.

          there is no more money. you get what you get allocated and you cannot have a transportation plan that has more projects than your allocated monies.

          the public does not understand this but the MPOs do.

          they have to prioritize and this forces them to make choices – an dthey do so essentially by majority vote for the region.

          that’s the way the process works.

          1. reed fawell III Avatar
            reed fawell III

            That’s very helpful, thanks.

  15. larryg Avatar
    larryg

    OOPS.. I DID ERR on the red penny:

    ” Construction and operations have been funded
    almost entirely from toll revenues collected on the facility. The
    State provides less than $1 million annually for operations.” (from a 2005 JLARC extract: http://jlarc.virginia.gov/other/CBBT_RGAExtract.pdf

    and the CBBT does have some issues of concern – longer range… as documented in the multiple JLARC reports on their website.

  16. john davis Avatar
    john davis

    The link below to a 1965 UVA Institute of Government newsletter provides a bit more information on the formation of the Elizabeth River Tunnel Commission (ERTC) and how it funded the construction of the first Downtown and the MidTown tunnels. Note the commission used Toll Revenue Bonds for this purpose. The news letters also discusses several other “commissions” set up by the Commonwealth.

    http://www.coopercenter.org/sites/default/files/autoVANLPubs/Virginia%20News%20Letter%201965%20Vol.%2041%20No.%2011.pdf

    Its also interesting that the 5 ERTC members were appointed by the Governor: 1 from Portsmouth, 1 from Norfolk County, 2 from Norfolk City and 1 a state resident from an area other than Hampton Roads.

    1. reed fawell III Avatar
      reed fawell III

      Thanks, john Davis, this is excellent article.

      1. reed fawell III Avatar
        reed fawell III

        See comment above to Neil Haner’s 1:03 post.

    2. larryg Avatar
      larryg

      awesome reference! 1965! thanks for sharing!

      Virginia’s planning districts were formed in that same timeframe:

      http://en.wikipedia.org/wiki/Virginia_Planning_District_Commissions

      In Va, many Federally-mandated MPOs are more or less the same planning districts….

  17. larryg Avatar
    larryg

    so it seems: ” The two-lane Downtown Tunnel replaced an automobile ferry system, and, in conjunction with the Berkley Bridge (as part of the Norfolk-Portsmouth Bridge-Tunnel project), was the first fixed crossing directly between Portsmouth and Norfolk across the Elizabeth River. It was financed and built by the Elizabeth River Tunnel Commission with toll revenue bonds and was completed in 1952. The ferries continued in operation until 1955, serving the passenger traffic unserved by the tunnel.”

    the tunnels in HR were orignially built with bonds to be repaid from tolls.

    I guess what goes around, comes around.

    Reed says this is an “overreach of govt” but the history shows that this was the practical approach that govt used to build more infrastructure.

  18. larryg Avatar
    larryg

    the 1965 Newsletter supplied by John Davis is an EXCELLENT READ.

    it implies it was written by Weldon Cooper himself which makes me want to learn more about him given his very significant role in Va governance.

    basically he lays out the difference between general obligation bonds and revenue (toll) bonds in terms of why the State chose to not do General Obligation Bonds and basically the concept of pay-as-you-go vs debt-financed infrastructure – that the state holds the debt on – vs the authority for a particular infrastructure project. he points out that the interest payments are higher for revenue bonds but it insulates the state in case they go belly up (in theory).

    so… most of the big infrastructure projects “back in the day” were turned over to state authorities created expressly for each project.

    the irony is that they did their job so well for some projects that the tolls were deemed no longer necessary ( a huge mistake in my view from both the perspective of user pays but more practically in terms of where the money would come from for future needs if not accumulated from the tolls).

    but we’ve sorta come full circle because the state obviously feels that it does not have the fiscal capacity to build new tunnels with state bonds and they want either an authority or a private entity to take on the bonds so the state can preserve it’s bond borrowing capacity for other things.

    if you think about this – it makes sense to rely on tolls to pay back bonds rather than taxes. the tolls basically put the burden of the costs on the people who are using the facility and not all the taxpayers and it’s very similar to the rationale used back in the 1950s and 1960s.

    Virginia could have chosen to tax-finance the CBBT instead of tolls.

    would that have been a better choice? taxes rather than tolls?

  19. Darrell Avatar
    Darrell

    Guess you all never watched the screaming going on between the local MPO politicians who wanted the HRBT expanded against the build Third Crossing crowd.

    These bridges should be STATE assets just as the Ports should be. That means paid with state money that has already been blown for political points. Which is why our state’s bonds are limited out.

    Those faulty spending decisions compound the problems and limit options. What ends up happening is the local fiefdoms, and now governors, come up with all kinds of outlandish schemes of questionable constitutionality to advance projects on the fly. That kills proper allocation of funds in a timely manner, investor interest in projects, and public involvement in the decision making process. AND we get a local long range transportation plan that is anything but constrained.

    The MPOs should be restricted to land based transportation projects of a localized nature. If for no other reason than to protect Virginia’s citizens from billions of dollars in payoffs and lawsuits.

    1. reed fawell III Avatar
      reed fawell III

      Darrell –

      Apparently Terry McAuliffe agrees with your last sentence, saying:

      “Let me tell you, it’s a lot easier to raise money for a governor. They have all kinds of business to hand out, road contracts, construction jobs, you name it.”

      See video clip at: nationalreview.com/campaign-spot/344820/being-governor-will-be-great-terry-mcauliffes-business-career

  20. larryg Avatar
    larryg

    Well.. I respect Darrell’s view though probably don’t agree with it given the history of the CBBT and the tunnels which all started out as Ferries and then tolled tunnels and I remember when they still had tolls on them and of course the CBBT still has tolls on it – and JLARC has expressed concerns that lowering the toll for daily uses may undermine it’s longer term finances.

    I guess I would have thought that if McDonnell felt the way that Darrell (and many others down that way)… feel that when he got the increased tax passed he would have parceled out money to pay for tunnels instead of tolling.

    Given that much of NoVa is now tolled and more planned on south I-95 and tolls on US460 and on the Outer belt if it goes forward, I think the State has decided there is no way they can afford to build these projects without tolling.

    The money is not there.

    it sounds like even Darrell might agree with that assessment though I’m sure if he does not he’ll correct me.

    Terry McAuliffe is likely blowing it out some orifice in my view give the fact that the current Gov just got through what has been characterized as the largest tax increase in Va history ( dunno if it’s really true) … and conservative GOP in Va has promised to “primary” every single GOP general assembly elected who voted for it.

    I always believed that if we were going to increase taxes for transportation that it would have to be a GOP – that the GA would never, ever do it for a Dem.

    It also looks to me that nothing would happen down in HR without the State’s involvement. They just did not have the money in their allocations to build anything so the State has ended up putting more towards that region than what they’d normally get in their allocations even with the tax increases.

    Finally, build more capacity into the infrastructure primarily to handle rush hour volumes has become unGodly expensive and the State has now bought into the idea of using tolls to manage congestion rather than just building more and more just to meet peak hour demands.

    not only in HR but in NoVa and south I-95 to Fredericksburg. All will be dynamic tolled to manage congestion.

    I just think the handwriting is on the wall and the fact we just had this major tax increase and we stayed on the toll track convinces me even more.

    cars are getting more and more efficient and that portends future fiscal problems unless we go to a fifty-cent or dollar additional gas tax.

    tolls are the lesser of the evils..

  21. larryg Avatar
    larryg

    tollroad news gives this quote: ” He said the Virginia constitution does not allow the General Assembly to delegate unfettered toll setting powers to the executive branch.”

    and… ” Patrick McSweeney the winning attorney tells us that it spells trouble for all public private partnerships in the state, and also for the Dulles Toll Road. ”

    so… it sounds like VDOT cannot themselves operate toll roads nor can they enter into a PPTA arrangement to operate them.

    I’d say more than the tunnels and Dulles Toll Road are at issue here.

    I’d say that every single existing toll road in the state from the CBBT to the Richmond Downtown Expressway are at issue plus all the earlier tunnels that were originally tolled.

    It’s hard to believe that all this time – that VDOT and the State administration never had the right to set up and operate toll roads.

    but perhaps this is a necessary backtrack and it’ll be interesting if the SCOVA tell s the State to shut down ALL toll operations on all roads across the state.

    Cuccinelli’s perspective on this is going to be interesting. So far, he’s showing some lukewarm support for the administrations position but perhaps the lawyers are right and the required Constitutional and legislative steps were never enacted and we’ll have no tolls of any kind in Virginia!

    this is going to be GOOD at the General Assembly level!

  22. Bob Bruhns Avatar
    Bob Bruhns

    Certainly Virginia’s executive branch, in the form of Senator (then Governor) Tim Kaine, handed MWAA unfettered power over tolls on the Dulles Toll Road. It took Congressional action to get the MWAA bunch to do anything but play their own games, and they still are still playing every game they can think of.

    I think MWAA’s tolling power was upheld in a previous court test, but it seems to me that this new ruling changes the situation enough that MWAA’s control of the tolling of the Dulles Toll Road will have to be reconsidered.

    Were the line item prices of highway and bridge contracts always hidden the way the line item prices of our rail monster are, or is this secrecy a new twist that was introduced by Public-Private Partnerships? Where is the check-and-balance, when nobody checks the price?

  23. larryg Avatar
    larryg

    re: can the state create an authority than can toll?

    tell me what the fundamental difference is between CBBT and MWAA in terms of their legal ability to set toll and operate toll-financed infrastructure?

    how would a court rule MWAA tolling illegal but say that CBBT tolling is legal?

    re: PPTA – there is a problem and it has been pointed out but how would anyone know for ANY govt or govt-contracted agency how money was being properly spent or not?

    what would you do different from what we do now?

  24. Hydra Avatar
    Hydra

    It seems to me that the judge is correct.

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