A Business-Like Approach to Paying for I-87

Proposed route of I-87 linking Raleigh and Norfolk.
Proposed route of I-87 linking Raleigh and Norfolk.

Sen. Frank Wagner, R-Virginia Beach, is the Republican candidate you’d almost forget was running for governor were it not for the occasional newspaper article like the one in today’s Richmond Times-Dispatch. He doesn’t have Ed Gillespie’s financial resources, and he lacks Corey Stewart’s penchant for controversy. But he’s out there, plugging away. As a long-time legislator, his ideas deserve a hearing.

Some of his ideas make sense. He is a fiscal conservative disinclined to gamble with big spending schemes or tax cuts that could disrupt the state budget. “This is not the federal government,” he said at a recent reception in Mathews County. “We cannot print money. We have to balance budgets day in and day out every day.”

But some of his ideas need work. His proposal for jump-starting the economy is to increase transportation spending. Because he’s a fiscal conservative, he would finance that spending through a tax hike, shifting to a sliding scale in which gasoline taxes are higher when the retail price of gasoline is lower, and taxes are lower when the price of gasoline rises.

In the article, Wagner elaborated on his thinking about transportation as a driver of economic development:

Virginia’s transportation network does not foster economic growth, he said, and the state will fall further behind North Carolina without major improvements. For one, North Carolina is planning a highway to connect Raleigh and the research Triangle to Norfolk and the port.

“That’s what business-people do,” Wagner said. “They make strategic investments and expect a return on that investment.”

Another thing business people do is conduct cost-benefit analyses before they make big investments. If anyone has conducted a reputable cost-benefit analysis of Interstate 87 between Raleigh and Norfolk, you can’t find it on the website of the Triangle’s Regional Transportation Alliance (TRA). (If someone knows of such a study, please let me know.) By way of justification, the RTA offers gassy language about investment that would accrue to North Carolina communities along the route (without acknowledging that communities not on the route might see investment shrink) and make it easier for tourists up north to reach the Raleigh area.

The singular virtue that I can see in I-87 is that half the proposed route is already constructed to Interstate standards. Supposedly, the 213-mile Interstate would cost only $1 billion to build. By eye-balling the map, I’d guesstimate that North Carolina would be responsible for building and maintaining 90% of the length. If North Carolina wants to waste its money, well, what the heck, maybe Virginia should be willing to throw in a few bucks to open up a new route for truck shipments from Virginia ports.

But that’s all back-of-the-envelope thinking. The acid test of whether such a project would be an economic boon or drain is whether it could support itself through tolls. Is there sufficient demand for a Norfolk-to-Raleigh connection — perhaps from trucks emanating from the Port of Virginia — that it could pay its own way? If so, and if private sector concessionaires were willing to put their own money into a public-private partnership, I’d be inclined to support the project. Conversely, if business people look at the project and decline to invest their own funds, then I’d be inclined to think that I-87 is just another boondoggle backed by civic boosters angling for Some One Else’s Money.

If Wagner really wants to do like business people do, perhaps he should get business people to pay for the project — and not raise Virginians’ taxes.

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9 responses to “A Business-Like Approach to Paying for I-87”

  1. Steve Haner Avatar
    Steve Haner

    With 25 years as a legislator serving in “positions of increasing responsibility.” as they say, Wagner deserves more than a hearing. If governors were chosen like real CEO’s, he’d arguably deserve the job. But nobody gets the job based on deserving it. I’m voting for him, but then I go back to his first race so of course I am. Life is not always fair and politics is never fair, but Frank adds some realism to a discussion that veers into strange territory. All things being equal, I think a governor is well served by coming up from the Assembly or even local government.

    I’m not sure Frank was endorsing that particular project as much as he was noting that North Carolina is good at strategic thinking, and that’s an example. Looking at the map you posted, if Virginia were thinking like that Route 58 would already be interstate quality all the way to 95 and 85, and with none of your stinking tolls. But the I-87 proposal would also boost the port, as you noted, so Va should be looking at it.

    1. You may be right, Wagner may not have been endorsing the I-87 project as a project for Virginia. (I would be shocked, though, if Norfolk and the Port of Virginia aren’t backing it.)

      My main point is to critique Wagner’s reasoning for spending money on transportation projects.

  2. Peter Galuszka Avatar
    Peter Galuszka

    This is really interesting since I have worked for newspapers in Norfolk and Washington NC and lived in both.
    Actually, there isn’t much along the Interstate route except for pinelands and farm fields (and solar panel fields). There is a steel plant (or used to be) on the Chowan River and pulp mill near Plymouth.
    As far as opening port-related truck traffic from Norfolk to Raleigh, it may not make that much sense in that there isn’t all that much manufacturing in Raleigh (although there is plenty farther west) where I-87 would connect. There have already been major upgrades to U.S. 64 to improve beach traffic to the Outer Banks.
    Another problem is that I-87 skirts some of the poorest, least educated parts of N.C. So there isn’t exactly a skilled workforce waiting there.

    1. You’re right that most of any truck traffic from the Port of Virginia would be heading to destinations west of Raleigh, particularly in North Carolina’s industrial Piedmont. Sad to say, but there’s nothing much in northeastern N.C. to develop.

  3. LarrytheG Avatar

    Wagner is out of step on transportation in the 21st century.. in my view. It’s a cockamamie plan that basically taxes everyone more – to pay for his pet project… in a day and time when VDOT has gone to Smart Scale to rate projects on bang-for-the-buck and projects , in part , specifically to get away from projects like Wagner is favoring.

    Those kinds of roads are now expected to be PPTA toll roads. If they are truly needed, people will pay tolls to use them.

    If this is an example of how Wagner thinks about things.. he’s just as bad as Gillespie , just in a different way!

  4. Steve Haner Avatar
    Steve Haner

    Drove up to NoVA Saturday and back Sunday. Going up the tolled express lanes on 95 were open southbound and were dead empty much of the time, while those of us going northbound covered 15 miles in an hour. That really built up my faith in that approach…..Look, they are Lexus lanes. Fine for rich folks or people who can bill the tolls to their clients or employers, but a budget buster for the kind of real working people many claim to care about.

    Now, I’m all for the approach of scoring roads based on congestion, utility, etc, and all for focusing dollars on the best ROI. But the “I” should come at least for the most part from a much more reasonable user fee, the fuels tax. Wagner is a voice in the wilderness, telling people they are going to be sorry all those future Hampton Roads projects have tolls that high, and they would be better off with a mix of tolls and fuel taxes. He will be proven right. Just more political cost shifting.

  5. LarrytheG Avatar

    the all-you-can-drive fuel tax is not a true “user” fee. People who choose to live further from work and drive solo daily – actually require much bigger and wider roads.. that cost out the wazoo.. to build and maintain.

    There is no fiscally sustainable way to expand those major roads anymore unless you tear down the adjacent developed property – then rebuild every bridge and overpass.. which is what VDOT actually did – one last time on I-95 to NoVa.. If they have to do it again – it’s estimated to costed over 5 billion dollars and so they decided to take the HOV and make it into HOT.

    I use the toll lanes.. sometimes for free when I have passengers and sometimes I pay – it’s my choice – and it’s worth every penny and if I was a daily commuter – I’d carpool/vanpool/bus to conserve money and time and use the HOT lanes for free.

    If I’m traveling to another city – I’d GLADLY pay to not get mired in the daily carnage .. as many folks from outside of the DC area do – they gladly pay the tolls to get around the DC mess.

    increasing fuel taxes on everyone to widen roads for solo commuters is a de-facto subsidy. If you CHOOSE to live a long drive from work and you CHOOSE to solo drive – every day – then that’s on you – not others.

    I favor tolls the very same way I favor the airlines charging higher rates for the higher demand periods. and any situation when there is high demand for something… cost needs to be part of the equation.

    If airlines charged fares like people favor roads – they’d have twice as many planes,, much higher fares on everyone, and most of their fleet parked during non-peak periods.

    Roads work the same way.

  6. I am certainly aware of Frank Wagner, and I tend to agree with him fairly strongly with the fuel tax increase. Now then the infamous Dominion rate freeze? Gotta cut him some slack I guess. I suspect he is a strong future candidate if not this cycle.

  7. LarrytheG Avatar

    Smart Scale is a sea change for Virginia Transportation that determines the “value” of every proposed project. If that project fails to meet minimum thresholds for cost effectiveness , it fails to get funding – no matter what the gas tax rate is.

    So the question is for a road like I-87 – is – relative to it’s cost what value does it provide ? You can’t make it more valuable by increasing the gas tax.

    Significantly – Smart Scale DOES allow Economic Development as a criteria – especial in less urban regions.. BUT – you have to SHOW that it actually WILL deliver bang-for-the-buck economically – a true analysis .. much more than political cheerleading.

    But Smart Scale makes it much more difficult was a project like I-87 to go forward.

    And if you’d like an example.. A new lane and bridge over the Rappahannock for I-95 near Fredericksburg has failed that test – twice!

    anyone who has been on that section of road is scratching their head.. but the thing to remember is that it competed against other projects for the limited money that was available and it lost to other projects that had a higher value proposition.

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