Too Much Money for Roads?!?

by Dick Hall-Sizemore

Although gas prices have receded substantially from the levels that sent everyone into a tizzy earlier this  year, Governor Youngkin has not given up on his proposal to lower gas taxes.  Now, however, his rationale for the cut is different.

According to veteran reporter Dave Ress, in an article that appeared in the Richmond Times-Dispatch, the Governor told a group of supporters in Virginia Beach recently that the gas tax should be decreased because it brings in too much money for the state transportation fund. The governor said that some level of tax needed to be retained as a use fee.

If the governor really believes that the state brings in too much money for the transportation fund, it seems strange that he let go unchallenged the General Assembly’s budget proposals to use $554 million in general fund appropriation to fund highway and bridge construction projects as follows:

  • Widen I-64 between the Bottoms Bridge exit in New Kent to James City County–$539 million (Item 447.10, Chap. 1 (HB 29) and Items 452 and 485, Chap. 2 (HB 30))
  • Extend Nimmo Parkway, Virginia Beach–$10,000,000 (Item 447.10, Chap. 1 (HB 29))
  • Replacement of Robert O. Norris Bridge–$5,000,000 (Item 452, Chap. 2 (HB30))

If there is so much money in the transportation fund, why would general fund appropriations be needed for these projects?

That there is too much money in the transportation fund probably comes as a surprise to the Virginia Department of Transportation (VDOT) and the Commonwealth Transportation Board, as well as to many localities. On VDOT’s website, VDOT opens its description of its SMART SCALE program with this statement: “SMART SCALE is a process that helps Virginia meet its most critical transportation needs using limited tax dollars.” (emphasis added). When Bacon’s Rebellion requested some information regarding the SMART SCALE program, a VDOT official commented, “There are always more requests for funding through the SMART SCALE program than there is funding available.”

The SMART SCALE program rates projects on many variables including congestion, safety, environmental, and cost-benefit. These are major projects. However, as many politicians point out, “For any voter, the most important road is the one that runs by his house.” There are programs in which funding is allocated for smaller, more local projects. It is in these projects that the limitation on availability of funding can perhaps best be seen.

One such program is the “State of Good Repair Pavement Program.” Under state law, 30% of the construction program is allocated to this program. As described by VDOT, the program “provides funding for the reconstruction and rehabilitation of deteriorated pavements on the Interstate, Primary and Primary Extensions (both Virginia Department of Transportation and locally maintained/owned).” Each highway district is allocated a portion of the funding available. In addition to using the funds to improve deteriorated pavement in the primary and secondary systems they maintain, the districts provide grants to cities and towns to improve the pavement in the primary highway extensions that run through those jurisdictions. These roads are usually the principal streets in these towns and cities. Any locality may apply for up to $1.5 million annually.

An examination of the recent history of this funding program in one district well illustrates how stretched this pool of funding is.

The Lynchburg Highway District occupies the bottom center of the state. It runs from Nelson and Buckingham counties on the north to Halifax and Pittsylvania counties on the North Carolina border in the south, and from Cumberland and Prince Edward counties in the east to the city of Lynchburg and Amherst County in the west. It is largely rural, with two medium-sized cities (Lynchburg and Danville) and several towns.

For FY 2019, there were seven applications from the Lynchburg District for State of Good Repair Pavement-Primary Extension grants, totaling $3.1 million. Funding was approved for two, for a total of $707,000. For FY 2020, there were 12 applications, totaling $3.0 million. None were approved. Nor were any of the 10 grant applications for a total of $3.1 million for FY 2021 approved. For FY 2022, there were nine applications from the district for a total of $2.9 million. Four for a total of $1.2 million were approved. (The source of this data is the VDOT Smart Portal, which contains lots of details about many of the state’s highway construction grant programs. Information regarding the FY 2023 grant applications is not yet available on Smart Portal.)

Over the course of four years, nineteen projects, with a total estimated cost of $5.6 million, have been left pending. From the perspective of the highway program, these are small projects, with most costing less than $500,000.

There can be several reasons that projects are not approved. Primarily, the applications are scored on a statewide competitive basis and the total amount of funding available is relatively small. For FY 2022, a total of $16.7 million was awarded statewide.

There is no question of the need for the funding, however. VDOT has a process for rating the conditions of highway pavement. On its rating scale, pavement must have a  Critical Condition Index (CCI) rating of 60 or above to be regarded as sufficient. For a project to be eligible for funding under the SGR program, it must have a CCI below 60. The CCI ratings for the projects not funded in the Lynchburg District ranged from 26 to 59. The majority of the ratings were below 50. (VDOT labels the condition of pavement with a CCI below 50 as “very poor.”)

Some jurisdictions are persistent. The town of Farmville has submitted an application for funding for a project with a CCI rating of 26 for four years running and been turned down each year. The town of South Boston submitted applications for a project with a CCI rating of 36 two years in a row. It finally got funding for a small section of the project in 2022, but the remaining, longer, section, with an estimated cost of $1.0 million, remains unfunded. It must be discouraging to these jurisdictions to lose out year after year.

If Governor Youngkin succeeds in his quest to cut the gas tax, this program and others that affect roads that residents use every day will have even less chance of getting funded. In Virginia Beach, the Governor said, “I want people when they fill their tanks to think about Senate Democrats.” If he has his way, residents all over the Commonwealth, when driving over their increasingly deteriorated roads, can think about Glenn Youngkin.