“Jac” Cales’ PPTA Monkey-Wrench

calesBy Peter Galuszka

For four decades, James A. “Jac” Cales Jr. was a fixture on the judicial halls of Hampton Roads, albeit not one to take himself too seriously.

As Portsmouth commonwealth’s attorney for a decade in the 1970s, he would lean back in his chair, his hands folded over his stomach and nod vigorously when a defendant in a drug case admitted something incriminating. He later served for three decades as a General District and Circuit Court judge, retiring officially in December.

So, it may be fitting that on May 1, while filling in temporarily, Cales issued what could be the most important decision of his long legal career. It is a decision that is turning Virginia’s transportation funding on its head.

Cales decided that a plan to have a private developer toll users for $2.1 billion in tunnel upgrades in crowded Hampton Roads is unconstitutional. Only the state has the power to tax and that’s what tolls really are, Cales ruled.

If his ruling holds, a number of critically important highways that involve privately operated facilities, such as parts of Interstate 495 in Northern Virginia, Route 895 near Richmond and a proposed $1.3 billion toll road from Petersburg to Suffolk, could be affected. State contracts for all of them could be voided.

If so, it would be a huge defeat for Gov. Robert F. McDonnell and earlier governors who have made good use of the Public-Private Transportation Act of 1995 to push ahead with highways that the tax-averse state otherwise was too short of money to build.

Cales’s case involved legal challenges to using the private toll road concept to pay for upgrades at the Downtown and Midtown Tunnels underneath the Elizabeth River connecting Norfolk and Portsmouth.

The key issues are electronic tolls that are supposed to kick in next February. Off-hour tolls for cars are $1.59 and go up to $1.84 during rush hour. Trucks would have to pay $7.36 during peak times. Business officials and commuters, many working in blue-collar jobs, are angry about the new expense. The tunnels used to be toll affairs years ago and the fees were much lower.

The pressure is on to void Cales’s ruling, lest it result in massive scrambling of road plans. Transportation Secretary Sean Connaughton, a big fan of the PPTA, warned of serious possible repercussions when he met with lawmakers Monday. “This is not consistent with almost 240 years of building toll facilities in the commonwealth of Virginia, Connaughton told the House Appropriations Committee, according to the Richmond Times Dispatch.

Cales’s ruling is due to be appealed to the State Supreme Court, but in the interim, he has refused to stay his decision. One possible outcome is that the state would be stuck with a lot of expenses that have already been paid, such as $706 million for the Elizabeth River tunnels. In all, the state could be on the hook for $3.5 billion.

The General Assembly would also be forced to perform a heavy-duty rethink of how it funds roads.

But that may be a good thing. The PPTA, heralded as a rare pioneering effort for Virginia, has been used far beyond its intended purpose. It was supposed to be a way to supplement traditional road funding. Instead, skin-flint legislators who hate “taxes” have used the PPTA as a way to fund roads through tolls instead with private companies assuming much of the risk. Democrats and Republicans alike liked this scheme of having your cake and eating it too.

The outcomes have not always been good. A relatively short toll road southeast of Richmond, the Route 895 Pocahontas Parkway, has been so underused and underfunded that it was sold off to Australia’s Transurban firm, which recently announced it was selling it to a consortium of European banks because it wasn’t making money.

14 Responses to “Jac” Cales’ PPTA Monkey-Wrench

  1. Judge “Jac” Cales is proving himself to be a wise man as well as good judge.

    These tolls are proving themselves to be valuable crutches for irresponsible government and for the private interests that drive that government on the backs to working citizens. This proliferation of tolls is a public threat.

  2. Not only are the tolls high, but they are included on one tunnel that isn’t even going to be improved. Add to it the built-in allowable rate increases, and just about anyone can see this is a bad deal for us in Hampton Roads.

    It should have been clear prior to the signing of the agreement that this was unconstitutional. I hope the Supreme Court sees it the way Cales does.

    • They are going to do improvements/upgrades/overhaul the Downtown Tunnel. It’s only the Midtown that’s having new lanes constructed.

      Now, there’s an imbalance as to funds generated by each toll relative to the work being done (as in most revenue will come from the Downtown but most work is at the Midtown) but that’s another story.

  3. Again – how hard is this? Isn’t Coles saying the taxes / tolls would be fine if levied by the General Assembly?

    Are you now going to tell me that the GA wouldn’t approve the tolls? If so, Coles is dead on.

  4. DJR,
    Good point, but it is Cales not Coles.

  5. Interesting. Pending before the United States Court of Appeals for the Federal Circuit is Corr v. MWAA. Key issues before the court are: 1) whether a toll imposed on the Dulles Toll Road to fund construction of the Silver Line is a tax; and whether MWAA is a federal entity. The Virginia Constitution prohibits delegating taxing authority to a non-elected body.

  6. the question is – what do the good citizens of Hampton want to do about the need for new tunnels?

    to date, what I have heard is what they don’t want to do.

    so .. it’s EASY to oppose something but what path would citizens support?

    the impression I get is that they do not want to pay for the tunnels via tolls or taxes and they want to state to pay for the tunnels.

    to which I would say – most every community/region in the State wants that deal but if you consult the six-year plan – even the new one that benefits from the tax increases, the money is not there and we already know that the state cannot borrow the money without having it’s credit downrated.

    So I just ask again.. how do Hampton Citizens want to pay – at least part – of the cost? And if you don’t start paying tolls now, how will anyone being able to borrow the money to build tunnels?

    Do you want to wait until Hampton accumulates enough transportation funding allocations to build the tunnels? That’s what many communities do. They put project on the six-year plan and wait a decade or more until their annual allocations have accumulated enough to start the project.

    NoVa got new lanes on I-95 by agreeing to let a private company toll them.

    Even then the State had to kick in about 400 million and another large chunk came form the TFIA infrastructure bank (which has to be paid back with tolls).

    I will admit that it appears the state was able to “front-end” the NoVa HOT lanes without tolling existing interstates and perhaps that’s a fair/equitable solution for Hampton ….

    • “NoVa got new lanes on I-95 by agreeing to let a private company toll them.”.

      Really? When was that referendum on the ballot in Northern Virginia? I think you’ll find that was decided in Richmond rather than NoVa.

  7. You keep saying Hampton (in this post and in the one a few days ago). Hampton has nothing to do with it. Maybe you mean “Hampton Roads,” which is the name of the region. But “Hampton” is it’s own independent city on the other side of the James River is not connected to either the Downtown or the Midtown Tunnels. Portsmouth and Norfolk are the cities involved.

  8. sorry.. it’s my lazy shorthand.. I’m keying from a laptop in a Van when I’m not paddling a river… this week.

    No.. I mean the region that is connected by tunnels.

    and I still “harp” on the fact that – that region – like other regions has no willingness to look at the fiscal realities of the tunnels and their own involvement in how to pay for them.

    virtually every locality in Va wants as much money as they can get from VDOT and the State – no matter how much their region actually generates in gas tax revenues – as if there is some other gigantic pot of money in Richmond that is available and did not come from gasoline taxes.

    there is no pot of money. The total revenues for transportation in Va is the sum total of all the gas taxes collected across the state.

    Even though NoVa and the Hampton Roads areas often claim that they deserve to be subsidized by the rest of the state – it’s a problematical strategy because:

    1. – there really is not THAT MUCH money being generated in RoVa to start with; the urbanized areas with their belts and tunnels are the biggest generators of gas taxes.

    2. – You’re really not going to collect gas taxes in RoVa and essentially zero fund their needs because of out-transfers of their tax revenues. It’s just not going to happen politically.

    The question the Hampton Roads folks have not answered realistically is how will the tunnels be paid for.

    so far they seem strongly opposed to any/all toll/tax approaches and insist that the “state” use it’s hidden vault in Richmond to pay for them.

    the latest attempt by VDOT was to try to get new tunnels STARTED NOW to be paid for by tolls …on tunnels that were originally tolled.

    the idea that a tunnel or a road is every “paid for” ignores the fact that roads/tunnels also need revenues for maintenance and operations AND some money to go to future improvements.

    this is how the CBBT has operated. You pay tolls on that facility – and you ALWAYS WILL because that facility will NEVER be “paid for”. It costs money to operated and maintain it – and future improvements if they are going to be funded will have to come from tolls – not taxpayers of Va.

    If the CBBT took the same approach as the Hampton Area about state funding – what would happen? Would a toll-free CBBT paid for by Richmond be the right approach?

  9. Why not say “Tidewater?” “Hampton Roads” is the term ginned up by a bunch of marketing schmoes.

    • As I understand it, ‘Tidewater’ refers to the land, ‘Hampton Roads’ to the water. Learned that from Garrison Keillor’s monologue when he brought his Prairie Home Companion roadshow to Norfolk in April.

      It’s all semantics, of course. A lot of folks still refer to it as ‘The Seven Cities.’

    • If there’s a NoVa then why not a SEoVA (pronounced see oh va). Or SEVA (pronounced see va).

      Actually, I’ve always liked Tidewater.

      • Darrell has said that the “proper” designation is Hampton Roads/Tidewater.

        I just shorten it to Hampton but we could agree on HRTR for Hampton Roads Tidewater Region or HRTRVA.. or some such.

        but I do follow the politics of roads, tunnels, taxes and tolls in HRTR, i.e. Pilot Online, etc and the impression I get from most commenters is that
        they believe that VDOT and the State should pay for the tunnel/bridge infrastructure and they are strongly opposed to a local regional tax for that purpose or tolls.

        I just see it as unrealistic and dead-end thinking… It’s easy to oppose and much harder to propose a path foward.

        What happened is that the region could not agree on how to fund their improvements or for that matter which improvements – a war rages on that also – so VDOT stepped in and tried to do a PPTA and now it’s going to get tied up in court or perhaps overruled and HRTR will be back to square one on how to go forward. just more wasted time NOT getting started on new tunnels….

        localities and regions in Va have been “conditioned” to believe that any/all transportation that they want or desire is a “core” state responsibility – no matter the fiscal realities!

        You can bet on it – after this last tax increase – given the apoplexic reactions of the right that we’re not going to see substantially more money that what we have now – and there is clearly not enough for tunnels and the state’s credit is already closed to maxed so that leaves the private sector path …. “evil” in the eyes of many AND it MAY NOT be an option much longer either as investor grade toll road studies are starting
        to see the reductions in VMT and when you’re figuring out 50-100 financing in that kind of environment – “investors” are not going to be chomping at the bit…

        Virginians need their own “Reality Check” when it comes to transportation. We have about 10 times as much want and need than
        we are ever going to be able to pay for much less be willing to.

        we have to confront this reality if we want to move forward and not literally gridlock the limited options that ARE left.

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