How realistic are the revenue assumptions of Hampton Roads transportation planners? Del. Leo Wardrup, R-Virginia Beach, argued yesterday that the region’s transportation plan is based on faulty assumptions about how much the region’s drivers would be willing to pay at the tollbooth, reports Tom Holden with the Virginian-Pilot.
Using low toll rates, [lawmakers] said, forced Hampton Roads planners to seek a larger increase in transportation funding from the General Assembly when it met in special session in September. The “ridiculously low tolls” forced the General Assembly to turn down tax or fee increases intended to close a transportation funding gap, said Del. Leo Wardrup, R-Virginia Beach and chairman of the House Transportation Committee. …
Regional officials had pleaded with lawmakers to approve $275 million in new funding for 30 years and authorize imposing tolls on existing and new facilities to help finance six major projects.
This is an interesting debate. When financing major transportation projects, planners must make realistic assumptions about toll revenues. How many people will use the tolled facility, and how much will they pay? The original investors in the Dulles Greenway found out what happens when optimistic toll projections fall short — they got taken to the cleaners. Over-optimistic toll projects also led to the restructuring and privatization of the Pocahontas Parkway southeast of Richmond. In sum, there are good reasons to be cautious.
But Wardrup also may have a point. If toll projections are too low, a different problem is created. Either projects don’t get built that could have been, or the special interests lobby for state subsidies that may not be needed.
I have no idea whether Wardrup is right or wrong, whether the postulated tolls are too low or too high. But I think his comments open up an important debate. Before any region of Virginia talks about raising billions of dollars in taxes, there must be a clear understanding of what the real demand is for the proposed transportation improvements. By “real” demand, I mean what value real people in the real world would put on the improvements, as measured by their willingness to pay tolls. If users aren’t willing to pay what it costs to build a road, is there any justification for building it?
As I’ve argued in other contexts, the business and political elites value their time more highly, therefore they are more distressed than ordinary Virginians by traffic congestion. Trouble is, they want everyone to share in paying for improvements. That’s just wrong. That’s why transportation improvements should be structured so that those who benefit from them pay for them.