How to Fund I-81 Improvements: Six Principles to Consider

Photo credit: Roanoke Times

Governor Ralph Northam is pitching another plan to raise money for improvements to the Interstate 81 corridor: (1)  Increase the statewide diesel tax to pay for transportation projects across the state, and (2) impose a regular gas and diesel tax along the I-81 corridor to raise revenue directly for I-81. The combined measures would raise about $150 million a year for I-81, a fraction of the $4 billion in identified needs, reports the Roanoke Times.

The proposed budgetary amendment comes in response to flailing efforts by lawmakers to find a funding solution for western Virginia’s increasingly congested and accident-prone traffic artery. All previous efforts have floundered because they offended one constituency or another. The root problem, of course, is that everyone wants more money for their roads, but everyone wants someone else to pay.

The political horse-trading approach seems not to be working. Perhaps it’s time to step back from the deal-making and articulate some basic principles that people can buy into in the abstract. If we can gain agreement on the principles, perhaps we can take a fresh look at devising a workable solution. Herewith are some principles worth considering:

User pays. The impulse of politicians is to grab revenue from any source available, a practice that over time creates vast networks of subsidies and cross subsidies that are too complex to unravel and fully understand. A “fair” system (insofar as any tax system can be deemed fair) would charge vehicles for the maintenance and construction of I-81 in direct proportion to which they benefit from those expenditures.

Some state funding justified. As an interstate highway, I-81 is part of a national highway system connecting U.S. metropolitan areas and expediting interstate commerce. That critical function warrants some federal and state funding support, just as all interstate highways do. 

Some local funding required. However, as occurs elsewhere, local governments along Interstate 81 have co-opted the transportation capacity of the highway. A tremendous amount of the congestion along I-81 comes from local traffic. Other regions should not be expected to subsidize local traffic generated by land use patterns that off-load the cost of building and maintaining local transportation networks to the state. Reforming local land use — the clustering of development around Interstate interchanges — needs to be part of any long-term solution for I-81.

Trucks need to pay more. Heavy tractor-trailers cause significantly more wear and tear on highways than light vehicles. While trucks do pay more in taxes than cars, the revenues generated are not sufficient to make up the difference in pavement damage. The tax system should ensure that tractor-trailers pay the full share of long-term costs of maintaining Virginia’s state and interstate highways.

Maintenance versus congestion. As a general principle, every vehicle should pay its fair share of maintaining the Interstate. Vehicles add to wear and tear whether they use the highway during rush hour or 3 a.m. The question of addressing congestion — too many vehicles on the road at the same time of day — is a separate issue and, ideally, requires a different solution. The virtue of variably priced tolls, as unpopular as they are, is that they charge highway users for contributing to congestion and encourage some trucks and motorists on the margin to shift to other roads or other times, or, thinking the unthinkable, share rides with others.

Local alternatives. Traffic congestion is not uniform up and down I-81. It is worst in the metropolitan areas — Winchester, Harrisonburg, Staunton, Roanoke, Blacksburg, and Bristol — where motorists use the Interstate as a local highway. Where practical and economically justified, these communities should prioritize improvements that increase the carrying capacity of roads and highways running parallel to I-81. It is far cheaper to expand the capacity of roads built to local street standards than expand the capacity of a highway built to Interstate standards.

In an ideal world, Virginia would scrap its jury-rigged transportation funding formula and replace it with a system aligned with these principles. Doing so would make the job of finding an I-81 funding solution a lot easier. But barring such a revolutionary change, we should at least endeavor to apply these principles to the I-81 corridor.

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31 responses to “How to Fund I-81 Improvements: Six Principles to Consider

  1. I blame a lack of forward progress on the counties and their leaders that abut I-81. They have steadfastly blocked several proposal approaches and not advanced any of their own except to “let the State pay for it”.

    It’s time for some leadership and if the folks down that way don’t like it – tough! I-81 has been an unmitigated disaster for more than a decade and it’s way past time to do something and having the locals pay their share, and the state pay their share and the truckers pay their share is way better than doing nothing.

  2. Virginia culture is incapable of building efficient interstate roads through clustered Va. towns and villages. Done in tandem, the two ruin each another, always. If you try in Va., what you will have left is going to almost surely be one big humongous mess. Hence, though Jim’s solution theories are enlightened, don’t bet on their success.

  3. I would like to see the number of people who use I-81 compared to the number of people who use METRO — and allocate the money proportionally. Seems only fair.

    • While you’re comparing I-81 traffic to Metro traffic, it might be helpful to know (a) how much it costs to operate and maintain I-81 versus Metro, and (b) how much I-81 motorists pay in gasoline- and automobile-related taxes versus how much Metro riders pay in fares.

  4. Largely because of pushback from citizens groups, Fairfax County imposed an additional real estate tax on properties within Tysons to fund some of the costs of in-Tysons (90%) and outside-of-Tysons (10%) transportation improvements, excluding transit costs. Properties with higher values, e.g., the parcels closest to the four rail stations, will pay more. But presumably their properties will benefit more from the funded projects and the density that these projects enabled.

    Why shouldn’t special tax or service districts be established in the cities and towns bordering I-81 entrances/exits to capture some of the value that location next to the freeway provides? If this tax plan is working in Fairfax County, why can’t it be used elsewhere where property owners get special value and benefits from their next-to-I-81 location?

  5. Not mentioned in the reports I’ve seen so far – this or something similar was almost included in the final conference report on the budget, which would have been a shameless way to sneak these past the legislative process and short circuit debate. I’m not crazy about this process, but at least it will produce a direct roll call vote on this one proposal. But as with several other things Northam is trying in this “Reconsideration” session, whether it fits the rules is a stretch and it may die on a procedural ruling.

  6. Regarding Density transfers:
    I commented in Clogging Corridors:
    Regarding PEC’s recommendations that state act more aggressively to protect U.S. 29’s capacity from encroaching development, including: reduce access points … Downzoning by-right rural densities. Strict local access management plans. Re-evaluate approved not yet built projects. Develop strategy to find conflicts between land use and transportation plans. Use Entrance Corridor overlays to establish and enforce strict access management standards.

    And as to concerns expressed about property rights and local governments’ needs focused on growth along their main transportation artery;

    Perhaps to accommodate fairly all these concerns a land use density transfer program might be considered, on a county or even regional basis. Under the program, higher density mixed use development locales could be designated. These would be founded on a wide variety of best practices factors. And owners outside the locale but with vested rights (such as along Route 29, for example) could sell or shift those rights into a development locale where they otherwise would not exist. This has been done in numerous urban situations. For instance, to encourage the preservation of threatened historic structures, or to allow the construction of something desired that otherwise would not work financially or legally. In the preservation case, the owner is allowed to sell his historic site’s unused density to a different site where it can be used without harm and indeed for public benefit. Done right, such transactions under such programs can create a great deal of “value out of thin air”. This thin air value can be put to great private and public good. A farmland tract housing development density or strip commercial use thus generates far greater value for public and private good at far less cost in a planned higher density mixed use zone.

    The intent is to leave all parties far better off while protecting the rightful interests of each, whether its livability, commerce, profit, environment or whatever.

    See: Clogging Corridors Posted on July 14, 2012

  7. Re: I-95 in Prince William/Spots/Stafford and I-81.

    A POX on BOTH.

    But very different problems.

    In our region – it’s a simple thing – way too many people take a job in NoVa then pick a home in the exurbs and intend to drive solo everyday and wonder why things are chock-a-block.

    On I-81 – the truck traffic – some is through and a fair amount is in Virginia but that truck traffic – anyone who has traveled I-81 in the last few years knows what it is like. The trucks take both lanes and the cars que up behind them in “trains” 5, 10, 20 cars long and everyone just sits until some idiot who can’t stand it tries to weave his way through it while others try to block him.

    I’ve driven many of the interstates in the US – and I don’t think Virginia is particularly different to be honest. FHWA sets the rules and they’re standardized for virtually all interstates but it IS up to the States individually to decide how much capacity they want to provide.

    There’s a certain irony in the interplay between trucks and rail. The enviros want more stuff moved by rail. That was the rallying cry on I-81 for a number of years for “fixing” I-81… just force all that stuff to be shipped by rail not truck!

    The rails do move a lot of stuff… they are pretty much maxed and there has been an attempt to add capacity to rail in Virginia but don’t you know – a whole nother group of folks have come out against the rail!

    It’s was like poking a hornets nest!!!

    Oh, and while we’re at it – all this talk about “socialism”. I cannot imagine a more socialist thing than public roads! We take property from folks (fully compensating them we say……) – and we then provide those roads to anyone rich or poor for one set price… (except where there are HOT lanes and other tolls). so… don’t matter if you are a CEO at Dominion or some independent contractor Dominion hired to tidy up their board room – both of them end up behind a truck on I81!

  8. A little history.
    In 2013 the Republican controlled House and Senate and that lousy Republican governor McDonnell increased our sales taxes (the biggest tax increase in VA history) and put a tax on fuels at the wholesale level. It was sold as Fixing the transportation problem… Here it is less than 6 years later and evidently we have a funding problem,,,again.
    A Pox on all those tax raising no dam good republicans…

    • I’d like to know if the recent “conformity made me do it” state tax hike now qualifies as the biggest tax hike.

    • Heckfire, just like ALL THAT MONEY we have already spent on poverty – we still got poverty! Ditto with the road ‘problem’. Despite ALL THAT MONEY we have spent towards “fixing” roads, we have FAILED to “fix” the problem and now they want MO MONEY to “fix” it.

      When are we going to elect folks who will NOT raise our taxes and force the State to live within it’s means?

      This is socialism on STEROIDS!

  9. Top-Gun is right on target. In Virginia, the Democratic and Republican elected official are thoroughly corrupt, grossly ineffective, and proven themselves so for the last several decades.

    To the degree there is any competence and honesty at all with the Virginia state government, it’s by reason of a relatively few civil servants and lower level bureaucrats, including some of real ability and character. We all know who those few people are.

  10. Will Northam’ s tax proposal disproportionately affect any protected classes? He should study that before he proposes a tax increase.
    Mayor Stoney is taking the heat from Richmond’s citizens of color for tax increases in the Richmond Free Press. There the people know their city is getting ready to crush the lower income folks with disproportionate property taxes.
    We all need to play the interesectional game appropriately. Laws, regs, and taxes cannot disproportionately affect the chance the ruling class doesn’t stay in power to provide the mandated handouts.
    I can’t wait for the flow chart of what applies to you based on your sex (or gender, they are now unattached), age, color, religion, citizenship status, sexual orientation, income, weight, height, eye color, hair color, attractiveness, intelligence, criminal history, amount or type of blackface performed, moonwalk ability,… to be released.
    As a cis, white, male, identifying as male, with no previous blackface performance history, and a lack of moonwalking ability, I am reasonably certain I will be at the bottom of the flowchart and will be deeply entrenched in the “providing class”.

    • I would say on this one, no, transportation taxes are either direct user fees (with a premium charged to people with gas guzzler vehicles) or are spread through the economy in the cost of goods transported. This is not “soak” the rich, as is proposed by our non-homeowner child mayor.

      • I think a “user fee” should address road usage not choice of vehicle in terms of gas mileage. If anything – we are penalizing those who already pay more gas tax with gas guzzlers and essentially subsidizing those with more fuel efficient cars.

        Our problem is that when folks buy more fuel efficient cars – they pay less gas tax and that results in a shortfall on state transportation revenues.

        The only way to fix that is to collect more taxes and it ought to fairly allocate them to those that do use the roads .

        Tolls are actually a more direct nexus – you pay the toll no matter what you are driving. The only break you get is if you have passengers which results in less vehicles on the road.

      • Soak the rich in Richmond? That’s rich. Richmond has an area of less than 60 square miles of land. Soak the rich and the rich will leave. Hell, they could walk out. Even a bluebird like Cuomo knows better ….

        https://www.investors.com/politics/editorials/cuomos-budget-rich-high-taxes/

  11. Here’s some details not mentioned here, not the least of which says Virginia will come close to doubling the gas tax!

    ” Virginia taxes gasoline at 22.4 cents per gallon and diesel fuel at 23.7 cents per gallon. Under Northam’s amendments, the state tax on diesel would rise to 40.5 cents per gallon over a three-year period.

    The diesel tax levied by states along I–81 averages about 64 cents per gallon. Diesel tax rates range from 27 cents per gallon in Tennessee to more than 71 cents per gallon in New York.In addition to state taxes on motor fuels, there are federal taxes. The federal tax is 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel.

    I support the increases. I-81 is in serious need of more lanes and this article points out that money will also go for I-95 and Northern Va and Hampton.

    The irony is that many people who have bought more fuel-efficient cars have been paying LESS total gas tax than they did before and it’s resulted in less total revenues for the state to pay for roads.

    Here’s the article by the way. Did not see it in those “mainstream media” outlets:

    https://www.fredericksburg.com/news/transportation/northam-recommends-raising-taxes-to-improve-interstates/article_6e52baef-08ca-5dbe-9870-cab4298cbd34.html

  12. Funny thing is that in Virginia adding more lanes to interstates only makes matters there far worse, and its been going on now for 50 years. You’d think by now the geniuses in Virginia would have taken notice of that fact, and looked elsewhere for solutions that solve problems instead of making them far worse. No such luck. Virginia’s elite remain stupid as a stump, and smart like a fox. It’s a deadly combo, the elite does fine, everyone else goes nowhere fast or slow.

    • 50 years ago Virginia had 4.6m people (in 1970). Today (in 2018) we have 8.5m. More people = more cars = more driving = the need for more roadway. Nobody jumps up and down about Virginia needing more electrical generating power than it needed 50 years ago. Nobody complains about Virginia needing more wastewater treatment than was needed 50 years ago. Why?

      Because the method of allocating electricity, water and sewer charges is direct and in proportion to usage. We need to do the same for roads. Vehicle miles traveled by road using in-car GPS devices. Money charged for both maintenance and expansion (if necessary). Monies used for the roads where the charges occurred. If you don’t like the high cost of the combined expansion and maintenance charge for Rt 81 … drive elsewhere, drive off hours or don’t drive at all.

      VMT for all roads, all over Virginia, applicable to all vehicles. No exceptions.

      • Hate to agree but sadly experience now makes it necessary to admit that there is truth to what Don says. So, assuming that is today’s reality, how do we force Shenandoah Valley locals off of I-81. And do it so that I-81 then can competently and inefficiently do what I-81 does best, what it was originally designed, built and paid for, to do – namely, to move interstate traffic though Virginia to America’s Southeast, Northeast, and Northwest, and quickly more all such traffic, autos and heavy truck traffic alike.

        This sharp limitation of local traffic on I-81 is critically important. Why?

        I-81 is the last north south interstate in Virginia that works. If Interstate I-81 fails as an interstate, then the entire Atlantic Seaboard is harmed. Ironically, the Shenandoah Valley will be the region that will be harmed the most. Essentially, the valley will be ruined, with no way to recover.

        However, it I-81 is done right, returned to its orginally purpose, that of interstate travel, including truck travel, the valley will enjoy a renaissance. Locals can feed off the revival in three primary ways.

        First, they can service that interstate truck and auto traffic passing through the valley.

        Second, they can build local facilities that directly hooks into and takes advantage of that wonderful long distance transportation artery they have newly created.

        Thirdly, using the density transfer techniques briefly described above, they can finance highly efficient parallel local roads that serve cluster higher density new development that also reserves large amounts of land in today’s open spaces within the valley that respects and continues the Valley’s irreplaceable beauty, culture, and history.

        Then we have a win win solution for everyone.

        • Lets correct a bunch of typos in the 3rd and 4th sentences of 1st paragraph of the above comment by using all caps:

          “And FIX IT NOW SO THAT I-81 CAN do WHAT I-81 USE TO DO SO competently and EFFICIENTLY do, what that INTERSTATE ROAD was originally designed, built and paid for, AND DID – namely, to move interstate traffic RAPIDLY though Virginia to America’s Southeast, Northeast, and Northwest. SO NOW WE NEED RESTORE THAT FORMER COMPETENCE, so that today I-81 can more quickly AND PROFITABLY move all such traffic, autos and heavy truck traffic alike.

  13. You keep local traffic off Rt 81 by putting up the same kind of sky high tolls we have in NoVa. That will work but it’s still not great. Some people drive “for free” and some pay tolls in Virginia. In fact, everybody pays to drive but some pay twice. Everybody should pay road and congestion specific tolls and nothing else. How to get out of state people to pay? When you pull up to a gas pump in Virginia you don’t pay fuel taxes if your license plate says “Virginia”. If it has the name of any other state you pay the gas tax.

    • Don,
      In theory, I like your proposal. Everyone in Va. has a device in his/her car to measure VMT and that person gets billed periodically. For non-Virginians passing through, they pay fuel taxes at the gas pump. If your license plate says “Virginia” you don’t have to pay fuel taxes. How would that work with self-service, which is what almost all pumps are now?

      • Dick:

        Relatively cheap cameras in the pumps (or somewhere in the station) that read and recognize the license plates. The software doesn’t even need to get the actual license plate … only recognize it as a Virginia plate. The pump is then “told” to charge the untaxed rate.

        Don.

  14. re: local roads on I-81. That would be the original Route 11 before it was sliced and diced for I-81! In many places Rt 11 still exists and still does a good job for local traffic.

    The “service road” idea is actually still advocated.

    US 1 From Washington to Richmond is a parallel “bail out” road when a crash closes down I-95.

    I support the VMT traveled idea. We have the technology right now to do it but it will require big-brother to connect cars to servers to capture their miles… but heck if they can capture your license plate to send you toll charges why not – essentially tolls for miles traveled… ?

    But the other thing to keep in mind is that the “use” of the road – the “cost” … varies according to congestion levels. That’s the idea behind HOT tolls. It not only collects tolls based on congestion levels – they use the tolling to manage congestion levels by chasing cars off of it when it becomes too congested. As DJ says – when that happens, stay off that road unless you just have no choice and then – be prepared to PAY – either in terms of time lost or money spent. Pick your poison.

    • As I was crawling along I-95 yesterday, taking more than 2 hours to get from NoVa to Fredericksburg at 3:00 in the afternoon, I was wishing that I had chosen to pay the $20 for the HOT lane

  15. I sat in on a Bipartisan Policy Center (BPC) transportation funding meeting the other day. Eric Cantor was one of the panelists.

    Another panelist was former US Rep Pa. (repub) Bill Shuster. Re: the rural/urban perception divide, his comment was, although the rural Pa people feel they are ripped off by transport funding, studies show rural areas are getting 1.7x more value per transport dollar. In other words, he was pushing back on the perception that rural areas get screwed by gaso taxes etc.

    Nothing else was surprising to me. Everyone (Dems+Repubs) feels more funding is needed. But Repubs cannot stomach that higher MPG vehicles pay less gaso tax, so they are demanding change to miles driven formula. Also repubs seem to want extreme reliance on PPP’s, whereas for Dems it is one tool.

    You can watch BPC meeting recording here, and let me know if you hear anything better than I did.
    https://bipartisanpolicy.org/events/transportation-funding-options-for-a-sustainable-future/

  16. I think often there is a failure of imagination. These projects typically need a vision that everyone involved can buy into, indeed be excited about, and only then should everyone ask “Well, now, how do we get there?”

    For example, one can travel the world and find no two places more beautiful and critical needed for preservation AND development than the Shenandoah Valley, and Virginia’s Chesapeake Eastern Shore. Both have vital roads running through the center of them that now despoil one, and grossly under serve the other. Yet both of those roads should be the roads that generate the power that drives the renewal and renaissance of both regions. These projects Virginia very much needs now. They are prime opportunities that are are long overdue.

    So where is the imagination? Where is the drive and leadership. These elements, I believe, are all that are really missing in each case. With those three elements brought to the table, all else will fall into place.

    • Stated another way, in the world of real estate development, if the project is primed to happen by internal and external forces, and the right vision is found, and the proper plan is put together by the right people, the money will follow. We have seen this happen over and over and over again. Where would Maryland be today without James Rouse, and Donald Shaffer, for example?

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