Prince William Hits Dead End on Transportation

Prince William County cannot afford to build the roads that voters approved in a $300 million bond referendum because declining real estate values have clobbered the county’s borrowing capacity, reports Dan Genz with “The public clearly wants these roads, and we don’t have a way to pay for them,” laments County Vice Chairman Martin Nohe said. “It worries me greatly.”

The county has scrapped improvements along Prince William Parkway and Route 28, as well as the next package of road-building proposals scheduled for 2010, which included the widening of Rt. 1.

The problem is that debt capacity is linked to revenue. County officials anticipated declines in property values of two percent and four percent for this fiscal year and next. Instead, property values tumbled 4.7 percent and 14 percent, producing a $51 million deficit next year. Revenues from the recordation tax and the sales tax also have declined, Genz writes.

County officials may be misrepresenting the situation somewhat (either that, or Genz is mis-reporting the situation). If I understand municipal bond financing correctly, Prince William could borrow more money — but its bonds would be downgraded from its current AAA rating. Presumably, PWC doesn’t want to start down the slippery slope of excessive debt and deteriorating bond quality — a commendable sentiment — but that’s not the same as saying it can’t borrow more.

The larger and more important lesson is this: PWC is bumping into the limits of what local governments can do to build their way out of congestion. The PWC board of supervisors is dedicated to preserving current inefficient human settlement patterns (scattered, low-density, disconnected), but it’s running out of options. At some point, supervisors will have to contemplate the horrors of higher densities, more contiguous development, more mixed uses, more pedestrian/bicycle friendly streetscapes and, horror of horrors, mass transit.

Of course, that’s pretty much what Sharon Pandak called for in her unsuccessful run against Corey Stewart for BOS chair, and the voters chose Stewart. The citizens of PWC appear to be in no mood to deal with reality. It’s easier to blame the VDOT, the state, the illegal immigrants — anyone else.

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8 responses to “Prince William Hits Dead End on Transportation”

  1. Larry Gross Avatar
    Larry Gross

    “The citizens of PWC appear to be in no mood to deal with reality. It’s easier to blame the VDOT, the state, the illegal immigrants — anyone else.”

    Actually, you could substitute other localities names for PWC also.

    It’s almost if people do not recognize that the more roads that you build, the more it costs to maintain them – and we have reached the point where our gasoline taxes barely pay for maintenance and there is no longer any left over for new roads.

    The second part is that these same folks .. somehow have it in their minds that the answer to the funding issues is to have the state give them more money by taxing other Virginians (but of course not them… or at the least.. they’ll get back from the state more road money than their locality actually generated in taxes).

    There are some answers.

    HB3202 allows road impact fees as well as public-private partnerships for new roads via TOLLs and CDAs and other methods.

    But the option that is no longer on the table (and really never was) was to have VDOT ride in on a white horse and “fix” it.

    One more thing – When Gilmore did the car-tax deal.. there was a lot of grumping on the part of localities because they were losing a revenue sources – but how many of those same localities made the case that they actually used that money to improve roads to start with?

    So instead of using a tax – on cars – to provide/maintain infrastructure for – cars – they did what with that money?

  2. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    The larger lesson is that politicians are the same all over. We go through this crap every year down here in Tidewater.

    “We don’t have enough money, so we need to increase taxes.”

    As real estate assessments jumped 50 percent a year, the cities were more than happy to accept the windfall. Even though wages weren’t increasing enough to offset the taxes. The avalanche started when ARM rate adjustments started kicking in to add injury to insult. They ain’t seen nothin yet.

    The cities not only want to keep their unearned profit, they want to increase it. Then there are the GOBers and their little tax and spend scheme for area transportation. And the RPV wonders why they have no credibility?

  3. Larry Gross Avatar
    Larry Gross

    It would seem though, that if the citizens approved referenda then they have agreed.

    That is, in theory, because the referenda is basically advisory as the BOS can choose to not carry out the wishes of the citizens – as evidenced in PWC where it probably was their AAA rating rather than not being to borrow at all.

    Referenda would be more honest and more transparent if citizens were also told where the money was going to come from – what the ramifications would be.

    For instance, they could be told that the roads would likely cause a 5 cent increase in the property taxes.

    As it is now, many of the referenda are non-nonsensical because it’s like asking citizens – “do you want have some more roads”? without saying where the pain will be.

    Also, PWC …. and Tidewater and Fredericksburg could ask it’s citizens via referenda if they would agree to tolls or even better give them the choice of tolls, taxes, or no improvements.

    You’re never going to please everyone but at least with a referenda everyone gets a shot at their own preference.

  4. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    Haven’t you been paying attention? Voters are ignorant.

    That’s why there are no meaningful referenda, no meaningful debate on issues, and.. gasp.. preference for negative campaigns with no substance. It’s a big waste of time address anything with the peasants. So the best thing to do is figure out a way around having the voter approve of anything. HB3202 comes to mind.

  5. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    While everyone is in a tizzy over deficits and budget shortfalls, you might want to take a look at the following website.

    It would seem that there is more to the foreclosure story than is being presented to the public. Like the fact that much of the developed world relies on ARMs, and falling global property prices are now beginning to catch up with the good ole USA.

    Increased taxes are the least of our worries. It’s the trillions that world pension funds have invested in these ‘risk-free’ investments that are now about to crap out. There aren’t enough bonds and gold in the whole world to cover all that soon to be worthless money. How does one go short on a theory of globalization? You ain’t seen nothing yet.

  6. Larry Gross Avatar
    Larry Gross

    hmmm..we’re seem to be thoroughly into the gloom and doom conundrum.

    sometimes I think people are ignorant and then sometimes I think it’s me and not them..


  7. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    I’m not always gloom and doom. 😉

    But when I see governmental agencies causing a Depression era run on their own investment funds, I tend to believe there is a great big set of teeth getting ready to bite somebody. If the government is in panic mode, imagine what’s really going on under the table at the overexposed pension funds.

    You see, the last recession we had, these big funds lost a lot of money. Seeking to get a better return, they switched to the tried and true, real estate. But they didn’t buy land like Ted Turner does. No, they bought the equivalent of toxic waste dumps in the form of high risk mortgages, in an effort to regain their losses from the previous recession.

    Now they are going to get bit at least twice. The mortgage debt that federal law says must be sold when it’s devalued, and a further loss in stocks they can’t get rid of without even larger writedowns. The big losers are the government workers, whose pension money is vanishing into thin air.

  8. Larry Gross Avatar
    Larry Gross

    If you want me to say that I believe the rich and wealthy own and operate this country for their own benefit and are not above being greedy to the point of harming our economy – go no further. I agree.

    And in my opinion – the crux – is this thing about companies having “free speech” – the right to buy candidates.

    I’m in favor of NO CONTRIBUTIONS at all allowed by companies or by stealth surrogates either.

    If we do not get special interest money out of our election and governing process – we are – screwed.

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