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Raging Roads

While politicians focus on potholes, a bigger problem emerges: How to fix a broken highway-funding system.

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This ferocious winter presents just the dawning of a very big problem. Some 28 inches of snow may have depleted the state's snow-removal budget, although Virginia Department of Transportation officials say there's enough short-term money in maintenance budgets to deal with potholes.

The big issue is what happens with road maintenance years from now. Without a radical change in how the state funds transportation, drivers will be dealing with far worse than a few bumps on their morning commutes.

The reason is a looming financial crisis that's been on the horizon for at least a decade. A tax-averse political environment has hindered the highway department's ability to build and fix roads, continuing a process that started years ago. Gasoline taxes haven't been raised in 23 years. With inflation, every tax dollar raised is worth about half of what it used to be, contributing mightily to the state's $4.2 billion budget gap, and the dwindling resources at VDOT.

In a recent report released by the Brookings Institution, a Washington-based think tank, senior fellow Robert Puentes sums up the situation as dire. “Beginning next year Virginia will have scarce funding for primary, secondary, urban and unpaved roads,” he writes, and “there aren't many options for dealing with this problem. It all comes down to the gas tax.”

For a vision of Virginia's highway future, conjure up a scene from a post-apocalyptic movie. Imagine impassable roads, sagging bridges, many traffic deaths and thousands of dollars in disposable income spent on front-end alignments and tire repair — not to mention lost industry. Road conditions, says Hugh Keogh, president of the Virginia Chamber of Commerce, “affect the quality of life and the attractiveness of Virginia as a business location.”

It's a message that doesn't appear to be gaining traction in the General Assembly, or with Gov. Bob McDonnell, who was elected on a jobs-first campaign platform. Dominated by numerous anti-tax zealots, the legislature has consistently shot down attempts by Democratic governors Tim Kaine and Mark Warner to find new ways to pay for transportation, including tax hikes. McDonnell, a Republican, has pledged not to raise the gasoline or other taxes.

Instead, McDonnell wants to push drawing transportation fund revenue from uncertain schemes. One is offshore oil development, even though it isn't certain how much is off the state's coast or that it would take about a decade under the best conditions for the money to start flowing. Another proposal — putting tolls on the southern entrances to interstates 95 and 85 — also is fraught with problems. One is legal. McDonnell simply cannot erect state toll booths on federal highways. He could if the tolls went to fund only maintenance on those interstates.

Ironically, McDonnell and the legislature's stance appears to be at odds with Main Street Virginia. Keogh notes that the state's per-gallon gas tax, about 17.5 cents, hasn't been raised in 23 years. George Hoffer, an economics professor at Virginia Commonwealth University who specializes in transportation issues, says the Consumer Price Index comparisons show that what $1 bought in 1986, when the last gas tax hike was approved, costs $2.17 today.
 
“The [Consumer Price Index] has more than doubled and the highway department is taking in a lot less than it did 24 years ago,” Hoffer says. Meanwhile, the state transportation department is being gutted; since 2002, its work force has dropped from 10,500 to 8,500 people, with another 1,000 positions scheduled to be cut by this summer.

During the last two years, the state's six-year plan for highways and railroads has shrunk by more than $4 billion, or 36 percent. But immediate maintenance needs in metro Richmond and Central Virginia aren't in danger, department spokeswoman Dawn Eischen says. Not including interstate repairs, as of the end of January, the Richmond District, which includes 14 counties and cities, has spent only $7.1 million of $17.5 million budgeted for maintenance in the current fiscal year.

The easiest fix for the state's road problems would be simply to raise the gas tax. “We need long term and sustainable infrastructure and a hike in the gas tax is the fairest way to get it,” Keogh says. The Chamber backs a gas-tax increase of from 5 cents to 10 cents per gallon, to 22.5-27.5 cents a gallon. Each penny of gas tax increase yields $50 million in tax revenues, he says. Longer term, “fixing our roads will take $1 billion a year each year for 20 years,” Keogh says. Virginia's neighbors all pay more taxes for gas, including 26.6 cents per gallon for North Carolina, 23.5 cents for Maryland and 20.5 cents for West Virginia.

What's more, if the state can't raise enough revenue to match federal highway requirements, Virginia could lose the federal share of highway funding. Considering that motorists already pay 18.4 cents per gallon in federal taxes, Virginians would wind up paying for other states' road projects.

But simply raising gasoline taxes is not a good long-term solution, Hoffer says, noting “that just raising the gas tax is perverse.” The reason is that as this decade unfolds, more cars will not be propelled by gas but by electricity or by a combination. Previous decades relied upon heavy sport utility vehicles, which are widely regarded as out-of-style gas hogs. Simply raising the gas tax on hybrids would be both self-destructive and unfair to conversation-minded owners of less-polluting cars, he says.

Possible solutions include either requiring drivers to pay a fixed charge of perhaps $9 a month or using advanced technology such as tracking devices, global-positioning machines to assess a variable congestion charge per mile. Hoffer believes that these could be installed in cars just as cheaply as GPS devices are now. They would work similarly to the on-board sensors that allow drivers to pass through toll plazas. The state would track your mileage every month and send you a bill. You wouldn't be charged for out-of-state travel unless there was an agreement with that state.

If you didn't pay your bill, the state would have the power to shut down your car automatically. “This feature could end a lot of high-speed chases,” Hoffer says. Advantages would include having the device charge less if you drove at uncrowded times. It also could advise you to take less-congested roads while offering you a tax break.

There are unresolved privacy issues, he says: “What happens if you are cheating on your wife or going to a strip club? I suppose some privacy provision could be included.”

Though it might sound like Big Brother, early variants already are being applied on high-occupancy lanes in Northern Virginia. Puentes of Brookings says that Hoffer's idea has been tested in Oregon and “it's exactly the right way to be going.” One problem, he says, is that the technology won't really be available for wide use for about 10 years.

Until then, it seems certain Virginia's road system will go bust, observers say, without a significant change in the tax structure.

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