The Crossover Conundrum

History of Crossover (in $1,000s)

by James A. Bacon

Once upon a time, the Highway Maintenance Operations Fund was flush with cash. Between 1986 and 2002, the Virginia Department of Transportation was able to transfer millions of dollars from the HMOF into the Transportation Trust Fund, which pays for new construction projects.

Those days are long gone. In Fiscal Year 2002, the Commonwealth Transportation Board approved the first transfer from the highway construction fund, $3.6 million, to the maintenance fund — a practice known as crossover. Since FY 2008, crossover transfers have averaged $418 million annually. Transfers are projected to increase to $600 million yearly by  2017.

Growth trends: vehicle miles traveled (blue), lane miles (orange) and motor fuel tax revenues (green) in 1988 dollars.

Basically, there are two reasons why crossover is necessary, Jose Gomez, director of the Virginia Center for Transportation Innovation and Research, told the CTB during a strategic planning session in Portsmouth last week. First, revenues from the motor fuels tax has been steadily eroded by inflation in the  price of asphalt and other construction materials. And second, Virginia’s highway system is aging and requires increasing maintenance resources to keep up.

Here are some of the scary numbers he presented:

  • 1,116 lane-miles of interstate highways are in poor condition.
  • 5,032 lane-miles of primary highways are in poor condition.
  • 27,166 lane-miles of secondary roads are in poor condition, or 34% of the secondary system
  • 1,730 bridges are structurally deficient

Looking ahead, 4,600 structures are in danger of becoming structurally deficient within the next five years, and an increase in Vehicle Miles Traveled (only temporarily in abeyance since the recession) will add to the wear and tear on the system.

For solutions, Gomez didn’t have much to offer. Eliminating the practice of taking subdivision streets into the secondary road system would save about $1 million yearly, he said. But even after 10 years, that would save only $10 million a year, a tiny fraction of the sum needed. Another option is devolution: transferring responsibility for secondary roads to localities. But politically, that’s a non-starter because localities are convinced that VDOT will not provide them with enough money to maintain the roads properly, much less to whittle down the backlog of bad pavement and structurally unsound bridges. Until VDOT can afford to pay more, it will be stuck with the secondary roads.

There was widespread sentiment among CTB members that the transportation system simply needs more money, but that belief was coupled with an acknowledgment that their job was to work with the resources they had, no matter how meager. Concrete ideas were in short supply. In fact, about the only proposal of any kind  came from L. Aubrey Layne, Jr., an executive with Great Atlantic Management in Virginia Beach, who asked, “Do we have the ability to shrink the system?”

No, came the answer from Rick Walton, VDOT’s chief of policy and the environment. The state cannot abandon a road unless it can show that a public necessity no longer exists. As long as a single family depends upon a road, it’s practically impossible to shut the road down.

The strategy session ended without any meaningful proposals to emerge from the group. But Transportation Secretary Sean Connaughton closed with an important point. “If people admit it or not, we’ve … de facto devolved the system.”  If counties want to build more secondary roads, they’ll have to foot the tab themselves. “There has to be a major reform of the program.” What that reform might be, he did not say.

This article was made possible by a sponsorship of the Piedmont Environmental Council.

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17 responses to “The Crossover Conundrum”

  1. Is Aubrey Lane a member of PEC?

  2. ” localities are convinced that VDOT will not provide them with enough money to maintain the roads properly”

    I guess it depends on how much of the 17.5 cents the counties think are their share.

    What I advocate is this.

    Make a decision as to how much of the 17.5 that VDOT will keep and how much the counties will get – and give them the secondary roads – and let them decide how they will spend their share of the gas tax.

    Give the localities the ability to put a 1 or 2% local option tax on gasoline per referenda… (like other local option taxes).

    VDOT needs to get out of the local road business and counties need to get into that business so that when they make development decisions they also own the transportation consequences and that would include the subdivisions.

    When you approve a subdivision and you know how much it will cost to maintain and operate (snow plowing,moving ,etc).. then the county should be able to decide if that cost is a legitimate cost to all taxpayers in the county or not.

    Right now.. people who do not live in subdivisions are effectively subsidizing their roads …but they’re doing it with their 17.5 cent gas tax.

    secondary roads that serve subdivisions and commercial development are a far bigger slice of the costs than Gomez said.. look at the numbers:

    1,116 lane-miles of interstate highways
    5,032 lane-miles of primary highways
    27,166 lane-miles of secondary roads

    how much of the maintenance dollar are spent on secondary roads when they have 5 times the mileage of the interstate/primary roads?

  3. is there a chart for maintenance costs in real dollars and/or real dollars per capita… has that gone up and if so by how much?

  4. Larry, no, there is no such chart. But Gomez’s presentation is online. Here’s the link. Also, Connie Sorrell provided a lot of info on maintenance in her presentation.

  5. I lived in Nebraska for several years. New development generally occurred outside cities. Developments would be responsible for their own internal roads, unless and until they produced sufficient tax revenues of various kinds to support local streets. At which point, the city would annex the development. Main roads were handled by the state of Nebraska.

  6. Groveton Avatar

    “First, revenues from the motor fuels tax has been steadily eroded by inflation in the price of asphalt and other construction materials.”.

    Ahhhh … yep.

    So, the problem has been in existance for 25 years. VDOT knows it’s the “first” problem. And the General Assembly does nothing.

    And you wonder why I call them “the Clowwn Show”.


  7. well… a majority of States have also refused to increase taxes – and Most republicans have refused to do it not on in Va… many other states.. and Congress.

    I guess Groveton will have to admit that it is Republicans and Conservatives who are opposed to providing NoVa with the ability to upgrade, eh?

    and if they succeed in replacing Obama and getting a majority in Congress, you can kiss a gas tax increase goodbye for a long, long time.

  8. and I’ll point out, once again.. there are no laws or restrictions preventing NoVa from presenting transportation referendums to it’s citizens.

    and there has been a law on the books that allows Fairfax to institute an income tax – for transportation only purposes.

    Arlington just increased taxes on businesses to pay for transportation.. so that option is open also….

    Transportation Districts and CDAs are further options – employed in other areas like the Fredericksburg Area…

    Toll Roads… also.. Fredericksburg is proposing a local toll road… for a “bypass”…

    Cordon Tolls are also possible… to price parking more fairly.

    Clearly – what Groveton and Fairfax are looking for are for folks outside of Fairfax to fund their “needs”.

    that would be just like Hampton Roads is hoping for.. and for that matter other localities… many are looking to the “state” to fund their needs and dare not recognize that the “state” is taxpayers…

    if taxpayers are ultimately who will fund roads – and they are…

    and some are fine with the roads they have and don’t want more and others like Fairfax are not happy – then Fairfax should take that bull by the horns…and take on some of that “home rule” they keep saying they want.

    What more do they need if they already have the right to tax ?

    is what is holding them back the ability to have “new” or “different” taxes when they already have a dozen or more that they can increase?

  9. Groveton Avatar

    LarryG – For the hundredth time … if NoVa passed a law taxing its citizens for transportation we would suddenly get none of the gas tax money (despite paying the gas tax). Beyond that, the payments for maintenance is made by lane mile without any regard to the number of cars which travel those lane miles. Yet another rural vs urban rip off.

    When the institutionalized theft of education funding slightly reversed one year – what happened? Little Timmy Kaine decided not to honor the formula.

    Nobody is going to vote themselves more transportation taxes until we get to keep all the transportation taxes we already pay – with no input from Richmond as to how those monies should be spent in-region.

    This has virtually nothing to do with Republicans vs Democrats. You keep confusing national politics with state politics. This is, and always has been, about urban/suburban vs. small town/rural.

  10. LarryG is right: Republicans are standing in the way of increasing the motor fuels tax, largely on the grounds that it is a “tax,” and therefore inherently bad. Virginia’s GOP would rather borrow billions than raise taxes. So much for fiscal conservatism. And so much for the idea that there’s no such thing as a free lunch. This is Obama-ism on a small scale.

    Groveton is wrong to attribute this way of thinking to the “clown show in Richmond.” As LarryG has pointed out on numerous occasions, the “clown show” has given NoVa the right to raise its regional sales tax and dedicate the revenue stream to regional transportation projects — with no intervention from the clown show. But NoVa residents wouldn’t have it. Turns out, they don’t like higher “taxes” either.

    The problem, I suspect, is not that NoVa residents (or Virginia residents generally) are dogmatically opposed to higher gasoline taxes, which are a form of user fee — they just don’t like taxes that they believe will continue a largely wasteful Business-As-Usual system for allocating those tax dollars to transportation projects that benefit the elites.

    I don’t see that anything can budge Groveton from his anti-Richmond perspective. But as long as he, and others like him (and there are a lot in NoVa) continue blaming everything on “Richmond,” there is little hope that they will devise workable solutions for their region.

  11. Groveton said: “Payments for maintenance is made by lane mile without any regard to the number of cars which travel those lane miles.”

    Groveton is accurately repeating what I reported from the CTB subcommittee hearing. Unfortunately, that information is inaccurate. (I have made the correction as an update to the article.) VDOT distributes maintenance dollars on the basis of need as measured by its asset-management system. Maintenance dollars are steered to where the needs are greatest, regardless of highway district.

    In defense of my reporting, I am not the only one who left that subcommittee meeting with the impression that lane-miles were the criteria. Shep Miller (board member from Norfolk) did, too. That was the entire basis for his line of questioning and his search for alternative metrics like population, Vehicle Miles Traveled, commercial traffic, etc. Other subcommittee board members seemed to share his understanding — at least, they did not correct it.

    I cannot understand why VDOT staff did not set Miller straight early on. All I can think is that the young woman in charge was a newly appointed interim director and may have lacked the confidence or forcefulness to correct Miller, a big, burly guy who had a way of dominating the entire meeting, including fellow board members who are successful businessmen and politicians in their own right.

  12. One more point regarding the NoVa sales tax for transportation: The regional sales tax revenues would not displace revenues from other sources. They would supplement those revenues.

    From what I can tell (now that I properly understand how maintenance dollars are allocated), the funding formulae for distributing maintenance and construction dollars are pretty fair. They could be tweaked, but tweaking them will not lead to a dramatic shift in the allocation of dollars.

    The money to watch is the $3.4 billion that the McDonnell administration is borrowing and how those funds are leveraged through the state Infrastructure Bank and public-private partnerships. In the early phases, it looks like Hampton Roads is making out big time, with two mega-projects getting funding: the Norfolk-Portsmouth Mid-Town tunnel and the upgraded U.S. 460. Charlottesville is getting a mega-project, the Charlottesville Bypass, that is *not* leveraged by a public-private partnership and that two-thirds of the population does not want. Of the two other mega-projects in the works, one is the Coalfields Expressway, and one is the I-95 HOT lanes — the only one in Northern Virginia.

    It will be interesting to see what other projects the Office of Transportation Public Private Partnerships comes up with, and how many of them are located in Northern Virginia.

  13. Richard Avatar

    As a semi-native northern Virginian, I’ll put my 2 cents in and say there has to be a Richmond solution, but Richmond doesn’t give N. Virginia its due. Roads can’t be strictly a local issue. The roads from Loudoun (and for that matter from W. Va.) run from Loudoun through Fairfax County and then through Arlington before getting to D.C. Fairfax has too much traffic already, so is it going to improve access to Loudoun? Arlington has the same issue with Fairfax and Loudoun. And Loudoun has the issue with W. Va and Md for that matter. Do the inner counties turn their land and resources into freeways for the outer counties? If that was the choice for Arlington or Fairfax citizens, and if they had to pay for it, of course they’re not going to do it. The logical “local choice” for the inner counties is to maintain the current highways but don’t build any new conduit highways, and anything new has to be mass transit or something that isn’t a conduit for the outer counties. Of course the outer counties have different priorities. That’s where state politics come in. The problem is that the state’s priorities (Richmond) are not population or economic based – it’s constituent based; in other words its politics, and in Richmond the politicians in Lynchburg Roanoke Warrenton Winchester and Culpeper have just as much say as the Arlington and Fairfax politicians.

  14. Richard, I think you have just made an argument for certain transportation funding decisions to be made at the level of regional government. Clearly, some roads and highways transcend county boundaries and serve to knit a region together. There must be a mechanism to overcome the kind of county parochialism that you describe. On the other hand, as you note, there is no justification for politicians outside NoVa to meddle. Some sort of regional governance that has more teeth than Metropolitan Planning Organizations needs to be put into place.

  15. Groveton Avatar

    Jim Bacon lives in a fantasy world where Northern Virginians will add taxes to themselves under the simply idiotic argument that thay are not yet paying enough of the state’s tax burden. Ted Kennedy would be proud of Jim Bacon.

    Even if Northern Virginians were stupid enough to raise their own taxes (which they are not), they would still be subject to the random decisions of the Clown Show. Jim simply does not care to address the education funding formula double cross perpetrated by Little Timmy Kaine. This was indicitative of the fact that the Clown Show cannot be trusted. Only the good fortune of having Bob McDonnell take over kept the promise intact. Should Northern Virginians simply hope that there will be some right minded politician just about to take office every time the Clown Show tries another double cross? Spare me.

    If Northern Virginia started taxing itself for transportation our share of state’s transportation funds would evaporate. The Clown Show has proven it cannot be trusted.

    So, now we move to a regional transportation authority. Good idea. Here’s how that needs to happen:

    1. The Clown Show relinquishes all control of the maintenance for local/regional roads and all ability to tax for local/regional roads.

    2. The state gas tax is immediately reduced. Any increase to the gas tax requires a 2/3 vote of the Clown Show.

    3. The distribution of gas tax funds is done 100% by vehicle miles driven. Each regional transportation authority will have to decide how to spend its share of the gas tax. Each authority will also have to decide whether or not to tax its citizens an additional amount in order to fund transportation.

    4. All of these new apporaches (including a regional transportation board elected by the citizens in the region) will be memorialized in the Virginia Constitution.

    All of this would amount to … a reduction in Virginia’s absurd love of Dillon’s Rule. You see Jim, regional governance “that has more teeth” is, by definition, a dillution of the power of the Clown Show over our lives. And that, by definition, is a good thing.

    As for McDonnell sending money to Tidewater and Charlottesville … good! At least it’s not yet more gold plating of transportation in Richmond or more money down the drain in areas of the state that should be de-populating rather than building more infrastructure.

    As for the CTB going an entire meeting under a false premise … that why it’s called the Clown Show.

    Jim fancies himself a conservative. He wants Washington out of our hair. So do I. However, I can extend that simple argument to wanting the Clown Show in Richmond out of my hair too.

  16. Groveton Avatar

    “From what I can tell (now that I properly understand how maintenance dollars are allocated), the funding formulae for distributing maintenance and construction dollars are pretty fair.”.

    Why would this be a difficult accounting issue – both in retrospect and in the future. Janet Howell proved she can demand an accounting for a single year. Why isn’t this accounting a standard order of business?

    Is it conspiracy or incompetence?

    I’ll give you a hint as to my belief … I call it the Clown Show not the Evil Show.

    It’s incompetence.

  17. “Why isn’t this accounting a standard order of business?”

    I agree.

    every locality needs to know how much it generates in gas tax and how much it receives in construction, maintenance and operations infrastructure and services and as long as we don’t have this – the kerfuffles will continue.

    People need to know how much of the 17.5 cents VDOT keeps to do construction, maintenance and ops on roads of statewide significance..and localities need to know how much of what remains they get.

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