Down the Transportation Rabbit Hole

by James A. Bacon

Senate and House of Delegates conferees have nearly nailed down a compromise over the state budget. The main obstacle: some $700 million in additional debt to offset the costs of tolls in Northern Virginia and Hampton Roads. Jim Noland with the Times-Dispatch has the story.

The absence of funding to pay down the tolls on the Dulles Toll Road, revenues from which are being tapped to pay for the Rail-to-Dulles project, and the Midtown-Downtown tunnels in south Hampton Roads is a deal breaker for senate Democrats. “You ain’t got 21 votes in the Senate for a budget — period,” said Sen. Richard L. Saslaw, D-Fairfax, whom Noland described as “angered.”

“I suggest you go back and find the … money,” he said. “Or tell the governor he ain’t going to have a budget.”

The Republican approach to the financing of transportation has always been incoherent: No new taxes. Period. Even if the 17.5-cent-per-gallon motor fuels tax has been severely eroded by inflation. Even if tolls, like those on the Dulles Toll Road, are extracted to pay for totally unrelated projects like heavy rail. Even if it means sucking money out of the General Fund, which has traditionally been reserved for programs that don’t have dedicated revenue streams. Republicans have totally abandoned the idea of “user pays” financing for roads and highways.

Now we know that the Democrats’ position on financing transportation is equally inconsistent and incoherent. That wasn’t so obvious this session, as Democrats did champion the idea of indexing the motor fuels tax for inflation. Anything that preserves the gas tax as a funding source is to be desired because it hews to the user pays paradigm. But this latest brouhaha suggests that the Dems aren’t any more interested in User Pays than the GOP. If they were, they wouldn’t be threatening to shut down the budget over $700 million in extra transportation subsidies — especially these subsidies.

(As an aside, I’m not sure where Nolan gets that $700 million figure. The proposals that I’ve seen would provide $450 million to the Rail-to-Dulles project, while the figure mentioned for the Norfolk-Portsmouth tunnels is more like $125 million. Regardless, the principles are the same.)

The Rail-for-Dulles funding is pure Alice in Wonderland. More than half of Phase 2 capital costs would come from toll revenues extracted from commuters on the Dulles Toll Road. Those revenues would be used to pay off bonds borrowed by… not the state but the Metropolitan Washington Airports Authority. Under the Dems’ plan, the state would provide $450 million to offset interest payments on those bonds, thus providing relief to the toll road commuters. And where would the state get the money? By borrowing it from somewhere else.

Is that really the way we want to do business in Virginia? No! (The only possible defense for these jury-rigged subsidies is that the Rail-to-Dulles financing is so FUBAR that it’s probably beyond salvaging by any rational  means.)

The situation in Hampton Roads is only slightly less demented. Presumably, the money for the Hampton Roads tunnels would offset tolls that the McDonnell administration was preparing to impose this summer — more than two years before the contemplated improvements were put into place. I do agree: It isn’t fair to ask Hampton Roads commuters to pay for a facilities that don’t exist yet. But the answer isn’t dunning taxpayers from around the state to subsidize a project they will never use! The answer is restructuring the deal financing so tolls aren’t imposed until the new facilities open.

Madness. Utter madness.

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  1. DJRippert Avatar


    You are missing the forest for the trees. Maybe even the trees for the bark. The Democrats put forth a gas tax indexing bill. That was their proposal. It is, by far, the best proposal made in the last few years. The Republiclowns defeated it. They have no alternative. None. They want to borrow money with no idea how it will be repaid.

    The Democrats are blocking the budget for two reasons – first, the transportation funding problem has not been addressed due to Republiclown negligence and the will-nilly borrowing of the “pseudo balanced budget” McDonnell administration will cause major fiscal heartburn in the Commonwealth long after Bob M is off to greener pastures. The Dems will use the budget stalemate to force the GOP to explain itself. Good.

    The Dems are also well underway on an urban/suburban strategy. They will combine the bizarre social legislation put forth by the GOP with a loud accusal of transportation negligence to consolidate votes in Virginia’s growing urban and suburban areas. They will cede votes in Virginia’s shrinking rural and small town areas to the GOP. Obviously, this is a winning political strategy so long as they can fan the fames of resentment against the GOP in urban and suburban Virginia. Making transportation a major issue in the budget stand-off is a very good way of bringing attention to the GOP’s incompetence on transportation.

    This is being well played by the Dems.

    Finally, there can be no doubt that the Dems are licking their chops as they think of a Bolling – Cuccinelli primary with both having to out-bizarre the other as each tries to woo the votes of the lunatic fringe who vote in the Republican gubenatorial primary. If the Dems can find a way to put forth a single candidate (as the GOP did with McDonnell) they will be in the cat bird’s seat for the next governor.

    1. You may be right about the Dems’ political calculus. You may be right that it’s a winning political strategy, although I wouldn’t be so sure because the gas tax is a political loser. But you’re using a different frame of reference from the one I’m using. From a public policy point of view, the Democratic strategy (just like the Republican) is unprincipled and incoherent.
      The brownie points they gain by indexing the gas tax, the Dems promptly lose by proposing massivesubsidies for toll users — with more borrowed money.

      1. DJRippert Avatar

        The gas tax is a political loser right up to the day that people start getting $300 EZPass bills each month. Then, all of a sudden, the question becomes, “Why am I paying so much to drive while people in places like Richmond don’t?”. The answer comes quickly – because the jackass Republicans have opposed the sensible approach of keeping the gas tax in line with inflation.

        Bye, bye Republiclowns. Bye bye.

  2. larryg Avatar

    I’m not understanding at all the “buy down” idea for tolls but I admit it’ in play in HR, NoVa and US 460.

    in terms of rural verses urban.

    Geography favors the rural in the house. The Senate could well tilt more urban but methinks this sounds a lot of the US Congress these days. UGH!

    1. DJRippert Avatar

      Not sure how geography plays into the house or the senate. They are both elected by population. Demographics favors the urban and suburban areas (with the single exception of a couple of white flight counties around Richmond).

      The Republiclowns have made their bed with a shrinking demographic. They have catalyzed their demise by putting forth one bizarre social engineering idea after another.

      The Republicans in Virginia are doomed and the economically successful areas of the state will be all the better for their departure from power.

  3. The problems with Dulles Rail were caused by the failure of our elected leaders to vet the project up front. But then why should they? This was rail that would fix traffic problems. No further investigation was needed.
    No effort was made to figure out how the project would be funded – in real terms – and not in fantasy ones.
    Several years ago, I was joined by a couple people in a frank conversation with then MWA chief Jim Bennett. We discussed financing and tolls, expressing concern the project could be so costly that it would require toll increases to levels that, in turn, would create drivers to start bypassing the DTR. Besides the increased traffic problems on other streets, too high of tolls could risk MWAA’s ability to pay off the rail bonds. We were assured MWAA had studied this issue and concluded tolls could be increased above $7.00 before there would be any significant, long-term drop in riders. Needless to say, we are talking tolls well above $7.00. This is a mess. But a mess largely caused by local elected officials. They were in the best position to keep the rail project under control. But they didn’t.

    1. DJRippert Avatar

      Nobody complained about the Beltway HOT lanes (perhaps, except me). Nobody whined that people would bypass the beltway and use surface streets after the “free” beltway go so congested that it became useless. Nobody griped about the $5 – $10 tolls per trip.

      Funny how the Dulles Toll Rd and some tunnels in Tidewater have caused such a furor.

  4. DJR. Big differences between the HOT Lanes and the Dulles Toll Road. First, Senator Omer Hirst (D-Fairfax County), who was key to the creation of the DTR, obtained public support for the toll funding plan, by promising the tolls would disappear once the bonds to build the road were retired. His promises to the public have been trampled by future generations of elected officials.
    Second, even if one were to accept the idea that Senator Hirst’s good-faith promise could and should be overturned, tolls on the DTR are being set at levels well above what are necessary to operate and maintain the DTR in order to fund a project, Dulles Rail, that does not benefit DTR users. They are being forced to subsidize an extremely costly project that is chiefly designed to allow massive increases in density for Tysons and, to some degree, Reston landowners. Traffic on the DTR does not improve long-term with the arrival of rail. The DTR drivers are being taxed for the benefit of others.
    Third, drivers using the HOT Lanes receive a benefit for their fee. They are guaranteed to be able to drive at least 45 mph. There is no similar benefit guarantee for DTR drivers.
    Forth, the arrival of HOT Lanes provides additional capacity for the Beltway that is being built. Given air quality restrictions in NoVA, there was no certainty VDOT would be allowed by the federal government to build more general purpose lanes on the Beltway.
    Fifth, I have heard VDOT and Fairfax County DOT people acknowledge some traffic on local roads is caused by the Beltway’s congestion. But again, the root cause of traffic congestion is local government’s approval of more development than can be handled by the transportation network. One simply cannot put 20 pounds in a ten-pound sack.

  5. larryg Avatar

    HOT lanes on DTR ? possibility? I agree with TMT. DJ is comparing toll apples to oranges.

    re: geography and House of Delegates.

    Exhibit 1:

    you count em…..

    Exhibit 2: how did the “social engineering” bills blow through the HD?

    answer: rural votes

    Exhibit 3: why should the rest of Va help finance the Metro Boondoogle?

    Answer: Cause the good folks of NoVa don’t know guano from shinola when it comes to realizing that their own elected don’t care if DTR drivers are screwed to pay for METRO – solution… bill RoVa or shut down the Va budget.

  6. “Cause the good folks of NoVa don’t know guano from shinola when it comes to realizing that their own elected don’t care if DTR drivers are screwed to pay for METRO – solution”
    Absolutely correct. The average RoVA voter at least knows what they want and expect their senators and delegates to fight for what they want. The average NoVA voter doesn’t take the time to understand what’s going on because we don’t take the time. We whine about being screwed by Richmond and then, in the very next breath, support legislation that screws themselves one more time. Case in point, Delegates Steve Shannon and Chap Petersen fought Governor Warner to get more funding for FCPS in exchange for higher taxes. Warner told the buffoons in NoVA that higher taxes meant more money for public schools, and the buffoons nodded “yes,” not realizing that Warner meant someone else’s schools. Steven and Chap had their legs cut out from under them when they were trying to get something for their constituents.
    I went to Key West this week. I say Harry Truman’s poker table at the Little White House. It made me think that the General Assembly is a poker game. The players from rural Virginia — the hicks from the sticks — know that their sophisticated counterparts from NoVA are idealogs who believe in higher taxes and government spending for the sake of higher taxes and government spending; or too scared to fight for their constituents; or, for those few who really understand, outnumbered. The RoVA poker players know that, if they hang in long enough, the NoVA legislators will fold — at least a critical mass will. The boys and girls from down south already know we are so desperate for rail that we agreed to put the burden for rail construction on DTR drivers. They have probably read the documents on rail, whereas we know deep down in our hearts that all our neighbors will take rail so that our drives to work will be 10 minutes. Why should they help us? How can the RoVans lose in poker with us on the other side? They can’t and they know it.

  7. DJRippert Avatar

    LarryG and TMT are experts at ignoring facts.

    It’s a simple and verifyable fact that the gas tax in Virginia has been frozen in cents per gallon for 26 years.

    It’s a simple fact that every state except Alaska has raised their gas tax to keep up with inflation since 1986.

    There are wealthy landowners in Los Colinas, TX. There are wealthy landowners outside Atlanta, Denver and Charlotte.

    The only obvious difference between Virginia and other states is the visible incompetence of the General Assembly.

    Now that incompetence is becoming visible as absurdly high tolls are being levied in the population centers of Northern Virginia and Tidewater.

    The Fairfax County BoS didn’t cause ridiculous tolls to be implemented in Tidewater regardless of how much LarryG and TMT would like to pretend otherwise.

    The problem in Virginia is, and has always been, our incompetent General Assembly.

  8. DJR, the gas tax has nothing to do with Dulles Rail. If the gas tax had been indexed since 1986, not a single dime would go to fund the rail project. Phase I is funded by the feds (share capped at $900 M); Fairfax County (shared capped at $450 M and funded by the special real estate tax on commercial property in Tysons and some in Reston); and the Commonwealth of Virginia ($50 M appropriation and the rest from DTR tolls). This was the plan adopted. The plan authorizing high tolls was approved by the CTB, without objection from the Fairfax County BoS). In fact, the BoS requested a fourth rail station be added to the plan, pushing up the costs.
    County Executive Tony Griffin also wrote a letter to the then Secretary of Transportation Pierce Homer that promised to pay a share of any cost overruns, either from County bonds or from the General Fund. The BoS never contradicted his letter. However, the supervisors now take the position that tolls, rather than County funds, should pay for cost overruns. I suspect they are back-peddling now.
    The BoS did not ask for a higher gas tax to fund rail. They did not say our support for rail is conditioned on any total cap in construction costs. They did not insist on a competitive bid. They did not try to persuade the special tax district to fund more costs. They did oppose the construction of an underground station at Dulles unless MWAA paid the added costs itself. They also approved a revised Comp Plan for Tysons without also having any plan to fund transportation. They still do not have a plan. The BoS kicked the can over to the Planning Commission, which has no plan and appears to be stymied. Yet there is one rezoning plan approved and 17 others pending. The 50-year costs for road and non-rail transportation improvements, including inflation, but excluding interest and other financing costs , are $5.46 billion. That’s more than $2 million for every week between January 2012 and December 2051.
    Why should people living in Amelia County, for example, support higher gas taxes to fund Dulles Rail? Why should their delegate and senator vote to send money to Fairfax and Loudoun Counties?
    Virginia’s transportation planning process is flawed. The process is governed largely by lobbying and money is often spent on projects that do not provide significant improvements for the public. Transportation planning is not fully tied to land use planning. It also needs more funding. IMO, a plan that reforms transportation planning, includes a very tight adequate public facilities law and increases gas taxes and imposes cost-based development impact fees should be adopted. A plan without all of these attributes should not be adopted. Land use and transportation planning can be linked at either the state or local level. I’d prefer this to done at the local level, but counties do not want responsibility for local roads. Fairfax County’s transportation problems were created by Fairfax County elected officials.

  9. “There are wealthy landowners in Los Colinas, TX. There are wealthy landowners outside Atlanta, Denver and Charlotte.”

    Texas, Georgia, and Colorado have statutes authorizing development impact fees and adequate public facilities ordinances. North Carolina does not.
    Couple these together with higher gas taxes, and you will find more public support for higher revenues for transportation.

    1. DJRippert Avatar

      I agree with you on the impact fees and adequate public facilities ordinances.

      Who should enact those laws in Virginia? Jurisdictions or the state?

  10. DJRippert Avatar

    TMT resumes his “argument in parts” with … “Why should people living in Amelia County, for example, support higher gas taxes to fund Dulles Rail?”.

    Let’s have every jurisdiction keep all their tax money and pay for all their needs. That would be fine by me. No school subsidies, none of that crap. The state would only get enough money for the state police, a few major highways and the state government. All the rest would stay in region.

    A vote for that would pass with an overwhelming majority in Fairfax County.

    But that vote will never happen. Because people in places like Amelia County would never agree. More money flows out of NoVa and Tidewater than in. But you still hear the absurd, “T’aint payin’fer no NoVer roads” sewage.

    It’s the argument that gets pulled out when all other arguments have failed. Like now, for instance.

    The gas tax could be used for whatever the Clown Show wants. The problem is that it has been shrinking in real terms for 26 years. Once again, a fact. Not a supposition or a paranoid rant about Tyson’s landowners – a fact.

    Inflation is real whether the Clown Show wants to admit it or not.

  11. “I agree with you on the impact fees and adequate public facilities ordinances.” Bingo!!!
    If we had this law on the books or if Fairfax County linked development to specific transportation improvements as was done in Tysons, we might actually improve transportation in the county and the payment of higher taxes could believe they would see benefit for their money.

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