McAuliffe Provides More Relief for Hampton Roads Tolls

by James A. Bacon

The Commonwealth Transportation Board voted Wednesday to make good on Governor Terry McAuliffe’s campaign promise to lower the tolls on two Elizabeth River tunnels. Tolls still will go up but less rapidly than provided for in the $2.1 billion public-private partnership agreement for the Downtown Tunnel/Midtown Tunnel project. Relief for the tolls, which will pay for upgrading tunnel links between Norfolk and Portsmouth, will cost the state $82.5 million over three years.

The CTB approved using $57.2 million in unallocated transportation funds and $24.3 million in bond funds to pay for the toll relief. “This is a good first step,” said McAuliffe, who addressed the board shortly after the vote. “This buys us some time to do what we need to do.”

Bacon’s bottom line. So much for the basic facts. Now for the analysis. Writes the Daily Press: “Both McAuliffe and Layne said they did not like the agreement the state had entered into with the Elizabeth River Crossings project.” But McAuliffe said the state was bound by a contract he described as a “bad deal.”

The contract was indeed a “bad deal” insofar as it jacked up tolls — up to $1.84 one-way for automobiles during peak periods — before the tunnel and highway improvements were complete. Without relief, Hampton Roads citizens would be paying for a benefit they do not enjoy. McAuliffe is right to seek redress.

But if Layne agrees that the agreement was deficient, why didn’t he say something when he served as a Hampton Roads representative to the board back when the CTB was voting to finalize the deal? I don’t recall him challenging the McDonnell administration during board meetings. Indeed, he was a steadfast champion of the project. Perhaps he had disagreements but expressed them in private channels of communication. If so, the question  arises, what good is the Commonwealth Transportation Board? If it’s not a forum for hashing out transportation policy issues, what is it? Will the CTB serve the dictates of the McAuliffe administration as slavishly as it served those of the McDonnell administration?

The only real value I see in the CTB is that it provides some transparency into transportation policy and decision making. We learn what big projects the current administration is pushing. We see presentations on issues that the Virginia Department of Transportation and the Department of Rail and Transit are wrestling with. But as a forum for actually debating issues, it’s useless.

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26 responses to “McAuliffe Provides More Relief for Hampton Roads Tolls

  1. re: the tradeoff between paying before and towards a new tunnel – vs borrowing more money up-front and and having to pay back the cost plus interest.

    what’s your choice?

    pay me now or pay me later?

    the idea of pre-paying for tunnels is not unique:

    ” The cost to cross the Chesapeake Bay Bridge-Tunnel will increase by an average of 10 percent on Jan. 1.

    The toll for passenger cars, now $12, will go up to $13 during off-peak periods and $15 during peak periods, defined as Fridays through Sundays between May 15 and Sept. 15.

    ….
    Christopher G. Stuart of Hampton joined John W. White and John W. Salm III of Northampton County in voting against the increase, which is intended to fund acceleration of construction of a parallel tunnel at Thimble Shoals.”

    so again.. the question is do you want the tunnel sooner or later?

    what did McAucliffe effectively do?

    he effectively took money from other Virginian’s to pay for a tunnel most will never use – this is over and above Hampton Roads existing allocations they already receive – their fair share of transportation taxes generated state wide and in their region.

    People down Hampton Roads way might feel this is a good thing right now but what happen when the shoe goes on the other US 460 or Cville bypass foot?

    In effect, what McAuliffe did was the same thing that people have expressed concerns about the HOT lanes – he gave tax money to a private company to essentially have the state subsidize a toll road.

    I don’t have a problem doing that if the money comes out of regional money – they can decide how they want to spend their allocations.

    but having the state arbitrarily picking some projects for subsidies is not a good thing.. Now you’re going to see NOVa, Fredericksburg, Richmond, etc asking VDOT for more money for their projects.

  2. Larry, you raise excellent philosophical questions regarding (a) pay-me-now versus pay-me-later and (b) does this proposal benefit Hampton Roadsters at the expense of other Virginians? Too bad the CTB didn’t discuss them.

  3. And what about the drivers who use the DTR who are facing tolls that could be as high as $17 to pay for the Silver Line that will, in turn, enable huge increases in density, leading to even more traffic congestion?

    As Larry puts it so well, that’s the Virginia Way!

  4. well not exactly, I’ve pointed out that New Jersey investigates the MTA for potential abuse and NoVa and Va elected leaders are too feckless to do that with MWAA and that’s a fault of NoVa voters who re-elect local and state folks who do nothing about it. It’s the “Va way” that blue Va should reject.

    we blame Kaine for MWAA and DTR but where are the NOVA elected?

    • Larry, I don’t disagree with your last statement. We get the government we deserve. Kaine gave away the store, but he is hardly the only former elected official who had fingers in the pie. The business community also has a creed: Never rock the boat even when you are being screwed. About the only time this did not apply was when the Tysons landowners split and refused to agree to a new tax district. The county imposed a service district in response, an act that extended the taxes to residents. It what TE fairly complains about.

      • Kaine could not do any of that without the acquiescence, indeed support from a wide variety of NOVA elected – local and GA.

        your leaders were and are part of it.

        Here’s a question for you – right now you have along with Hampton Roads an additional one percent tax for transportation – tell me how much money is being generated and one it is going to be spent on.

        how many people in NoVa are actually paying attention?

        • Wrong – Kaine did not seek any approval or ratification from the GA on the transfer of the DTR to MWAA. A number of members of Congress agreed with the transfer, but the GA was not consulted. A lawsuit by drivers was filed and dismissed.

          In 2012, Cuccinelli stated Kaine was within his authority to transfer the road. But Kaine still did not seek legislative approval for the transfer.

          There is considerable anger at the tolls and the neighborhood cut-through traffic it is generating.

          • Do you think the GA needs a “request” or “approval” for something they do not like?

            how come the GA weighs in on the Medicare Expansion and said squat about the DTR?

            Cucinelli can go after UVA professors and sue over ObamaCare and can’t do anything about MWAA? really?

            “considerable anger” USUALLY results in SOMETHING at the GA level.. and it’ usually strongly supported by the elected from the area where the problem occurs..

            these are lame excuses.. there’s been a LOT of WATER under the Kaine bridge and nothing done since then except blame Kaine.

            Perhaps ya’ll get what your elected leaders intended and you deserve?

      • also – Kaine is yesterday…

        McDonnell the guy who opened up the rest areas that Kaine closed did what with the MWAA:

        http://www.washingtonpost.com/local/trafficandcommuting/mcdonnell-appointees-for-metropolitan-washington-airports-authority-remain-in-limbo/2012/07/22/gJQATeoo2W_story.html

        How come McDonnell and Cucinelli didn’t direct some of their firepower at MWAA? How come, as far as I can tell, not a single NOVA local or GA elected has sponsored inquiries and investigations and legislation to deal with MWAA?

        how come no NOVA local or GA -elected has been voted out of office over failure to do something about the tolls?

        Easy to blame Kaine – but that was more than a decade ago.. and as far as I can tell – no effort by NoVa to deal with it.

        How come McAuliffe sought “relief” for Hampton but not DTR?

  5. My understanding is that there are but 4 colleges in Va that offer Physician Assistant Degrees.

    I wonder for McAuliffes next initiative he might propose taking the MedicAid money and using it to create jobs for Virginia young people by

    1. funding more physician assistant programs in Va. 4-year and Community Colleges

    2. – offer to pay for all tuition and expenses if students will agree to 5 years of service in a local Community Clinic for people on MedicAid?

    even if the MedicAid money goes away in the future – it’s a win-win for Va.

  6. James A. Bacon wrote:

    The contract was indeed a “bad deal” insofar as it jacked up tolls — up to $1.84 one-way for automobiles during peak periods — before the tunnel and highway improvements were complete. Without relief, Hampton Roads citizens would be paying for a benefit they do not enjoy. McAuliffe is right to seek redress.

    I strongly agree regarding tolls for unimproved Elizabeth River crossings.

    People have every right to question tolls for something for which they are not getting any benefit (yet), even if more capacity is “coming right up.”

    As for a private concession vs. “regular” (VDOT tax-funded or VDOT toll-funded) improvements, I am pretty indifferent.

  7. the question is where do you get the money to buy a new tunnel?

    Now you could take it out of HR’s annual allocations and leave practically nothing left over for other transportation needs.

    so how do you do that?

    well one way is to take out a loan but that’s got limitations also in terms of how much you can borrow and how much interest you have to pay on it.

    but then you have this problem – if you build up a fund ahead of time – it will cost you less that borrowing more at the onset and paying back interest.

    so which is a better deal for those who ultimately will pay tolls ?

    higher tolls for a longer period of time to pay back a bigger loan

    or higher tolls ahead of time to essentially buy down the amount that has to be financed – and reducing the pay back interest?

    I’m appalled at the lack of financial awareness that is present in these discussions about the “fairness” of paying tolls before the project is built.

    if you actually put the question in terms of which option would provide lower and shorter term tolls.. would people STILL resent paying tolls ahead of time?

    if so… so be it… but right now – it’s obvious from the dialogue in HR that people consider prepaying tolls as the worst option.

    VDOT was attempting to get the tunnel for the lowest cost – to buy-down the total by pre-paying and the public did not like it but no one even attempted to present the two options to the public and McAuliffe basically stepped in and did something “popular” but ultimately will cost the people of HR – more.

  8. Tolls make sense for roads, bridges or tunnels when the money is used to construct, rebuild or provide extra maintenance for such facilities. Tolls also provide economically rational pricing signals, both to drivers using, and to landowners bordering, the tolled facility.

    Tolls should not be used to pay for other infrastructure. It would be wrong to toll tunnels in HR to build other roads or transit in the area. It’s is wrong to toll the DTR to fund the Silver Line. Then tolls send irrational economic price signals to drivers and landowners.

    It is sensible to bond future toll revenue to help pay for the construction of the tolled facility. But the bottom line is: the facility needs to built before users can be tolled. Once you abandon this principle, it becomes a form of theft under the coercive power of government.

  9. TMT – did you save up for your house ?

    most people understand the concept of setting aside money for a large purchase later on to keep from having too large a loan, too long a loan period or onerous interest charges.

    the same is true with new toll roads.

    what is the most cost-effective way to build a new toll road that will minimize the tolls?

    Did you read this:

    ” Chesapeake Bay Bridge-Tunnel tolls increase next year

    The Chesapeake Bay Bridge-Tunnel tolls will increase by about 10 percent next year.

    …….

    The fee changes are part of a financing plan to build a second Thimble Shoal Tunnel – one of two spots on the bay crossing where traffic from its dual bridges converges and dips into a mile-long tube under water. The second tunnel would allow traffic to continue in two lanes in each direction and offer an alternative if one of the tubes must be closed.”

    okay – so a question for you.

    Is what the CBBT doing – wrong?

    • Fair question, Larry. I would say this: Politically speaking, it’s a lot easier to bump up tolls 10% to accumulate money for a new project that to increase the toll by a factor of three or four (or to impose tolls where there were none before).

    • So how did the DTR get built? It’s my understanding the Commonwealth, which did not have sufficient funding to build the road sans tolls, issued revenue bonds that constructed the roadway and were paid off through tolls on the DTR. Other roads were not tolled to build the DTR. Why is Hampton Roads different? I don’t get it.

      • hmmm… it sounds like.. Va could not afford a 16 mile road so it got built by private means.. then could not collect enough tolls to pay the debt…went bankrupt, restructured the loan

        .. and now it’s a cash cow?

        but increasing tolls to pay for a new tunnel in Hampton sounds just like increasing tolls to pay for a new tunnel on the CBBT.

        is what the CBBT doing as wrong as what folks think the Hampton Tunnel was doing?

        is there a difference between collecting tolls to pay for an expansion of an existing road – rather than a new road?

        • The DTR never went bankrupt. As I understand it, the original bonds were repaid. The Greenway, which connects with the DTR, did go bankrupt.

          My point remains. The DTR was built with bond money backed by tolls on the DTR. No one tolled other facilities to build the DTR. Now we are tolling the DTR to pay for the Silver Line – something government documents show will not provide any traffic congestion reduction benefits for the toll payers.

          What was done to build the DTR was a reasonable policy. But tolling one road, bridge or tunnel to build something else raises serious questions of basic fairness.

          Look at the Express Lanes being built on I-95. The existing HOV lanes remain untolled. Once the HOT lanes open, they will be tolled. Isn’t this the fair approach? It just is not fair to toll facilities to build others.

          • re: ” Look at the Express Lanes being built on I-95. The existing HOV lanes remain untolled. Once the HOT lanes open, they will be tolled. Isn’t this the fair approach? It just is not fair to toll facilities to build others.”

            HOV still goes free, right? so what’s not fair?

            but you’re still sliding sideways on my question.

            If the CBBT increases tolls so they can build a second tunnel to provide additional capacity …

            why can’t tunnels in Hampton be expanded the same way?

            If you have a road that is congested and needs additional lanes -and you have two choices – the first is to wait for years, decades – and the second is to collect tolls and add lanes.. is the toll option “unfair”?

          • Larry, I grant you construction time. And it is possible that tolling other facilities could speed construction of a new facility. But I still struggle to see how it is fair to toll facilities unrelated to the one being built or expanded when we didn’t do the same for the DTR. In fact, had tolling of other roads to fund the DTR been proposed, I suspect it would not have been approved.

            I could see the creation of some overarching transportation authority that operates multiple facilities with tolls going to support and expand such facilities. But then, with full disclosure and voter approval. But it’s still wrong to toll the DTR drivers to build the Silver Line, especially since latter is subsidized for fares.

          • ” Larry, I grant you construction time. And it is possible that tolling other facilities could speed construction of a new facility. But I still struggle to see how it is fair to toll facilities unrelated to the one being built or expanded when we didn’t do the same for the DTR. In fact, had tolling of other roads to fund the DTR been proposed, I suspect it would not have been approved.”

            “fair”.. isn’t it more of a choice between getting something r sooner cheaper and later more expensive?

            “I could see the creation of some overarching transportation authority that operates multiple facilities with tolls going to support and expand such facilities. But then, with full disclosure and voter approval. But it’s still wrong to toll the DTR drivers to build the Silver Line, especially since latter is subsidized for fares.”

            the toll road authority is the way that Florida and Maryland are going.

            Maryland is basically paying for the ICC with other road tolls – on the premise that in doing that they could build it now and catch up on tolls later… rather than never build it or wait decades.

            Florida basically uses tolls from existing roads for seed money for new toll roads…

            in terms of the public understanding…

            it’s a real uphill climb on education.. you can see this with the Hampton Tunnels… and I’d suspect that if you did ask the question that a certain number, perhaps a large number would vote to NOT toll early to get someone sooner.. the’d just vote to take their congestion lumps…

            basically they don’t trust the process.

  10. politically – yes – but do the toll payers understand who ultimately pays more for the new tunnel than they would have if they had prepaid it?

    tough sell politically … agree…

    isn’t this an example where the cheaper option is rejected out of what essentially is ignorance?

    If someone put a dollar cost on not buying down the loan amount and broke it out into a cost per toll.. would it make any difference?

    probably would not .. right?

    this is why some (not all) in VDOT continue to maintain an arrogant and contemptuous attitude towards the public… in general.

    They simply do not believe you can talk honestly to the public so they concoct these PR messages…that ….. sound like PR messages…

    😉

  11. larryg wrote:

    this is why some (not all) in VDOT continue to maintain an arrogant and contemptuous attitude towards the public… in general.

    This is not your father’s Virginia Department of Highways (VDH), known by many across the Commonwealth as “the Highway Department.”

    But like it or not, VDOT is a statewide agency, and it is ultimately answerable to state elected officials. For those reasons, it maintains a statewide perspective, even though it is much more responsive to the concerns of county elected officials than it was as recently as the 1980’s.

    • VDOT is changing, but slowly. FC DOT has been given the go-ahead to administer (including the decision-making) traffic calming projects without prior VDOT clearance so long as state guidelines are followed. It seems to be working well.

      And I agree that VDOT has a statewide focus because that is its statutory mission. Most counties don’t want control over their local streets.

  12. re: ” Most counties don’t want control over their local streets.”

    but they want to make land-use decisions that affect their streets then have VDOT fix it….

    but what would you think if VDOT had a meeting with the BOS and the BOS did NOT KNOW:

    1. – that the secondary roads in the Secondary Six year plan are selected by the BOS –

    2. – that the ones NOT IN the secondary 6-year plan were the ones the BOS did NOT select?

    3. – that don’t know the difference between the State 6 year plan (decided by VDOT – with “input” and the Secondary 6 year plan which is largely the project selected by the County?

    4. – that the BOS does not know which State road projects are funded or not in the State 6yr plan?

    This is how bad it is.. it takes a full election term on a BOS for SOME of them to START to understand this, others NEVER get it.

    VDOT is the Transportation Daddy War-bucks from Richmond and the counties are all Little Orphan Annie clones…!!!

    and all of them believe that VDOT Daddy Warbucks gives other countries and jurisdictions money that should go to them!

    It’s downright sad and scary just how little many BOS in Va know about VDOT’s process for roads and how it differs between Primary and Secondary.

  13. Maybe I’m overly optimistic, but I think Fairfax County is starting to get it. While the County runs from the idea of controlling its own streets, it seems to understand it can no longer simply approve construction projects and presume VDOT will fix things. It doesn’t do much good to kick the can down to Richmond when the County does not have the ability and strength to kick the can outside the Fairfax County boundaries.

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