NV REGIONAL TRANSPORTATION FUNDS GUTTED

     For years, in every way possible, I worked with many in this region to document the depth and breadth of Northern Virginia transportation needs.  In 2013, all the work paid off when we were ready with a carefully crafted $400 million a year NV regional funding package that got put into the statewide package.  Regional funding would go beyond state funding and be controlled right here at the local and regional level.  We finally could begin to move on the backlog of 1000s of smaller projects to deal with bottlenecks, problem intersections, and transit links to reduce congestion and improve safety from neighborhood streets to major arteries.

      Incredibly, dealing with those long-standing needs was gutted in 2018.  On a party line vote, the House majority took over $100 million a year and re-directed it to meet Virginia’s share of Metrorail’s newly acknowledged capital maintenance needs.  Even though new sources of revenue for rail maintenance had passed the Senate with wide support, not a single member of the House majority would vote on behalf of Northern Virginia.

      Many projects – big and small – throughout the 39th District must now wait for years because, understandably, the Fairfax County Board is determined to keep faith with the priorities on the list they adopted in 2014 rather than re-prioritize.  The 2018 deep cut stopped Fairfax from updating the 2014 list, which had been planned because enough work had been done and there was confidence in the amount of new revenue coming from the 2013 General Assembly action. 

     A rigid list was not what I envisioned in working over many years to provide a significant means of local funding.  Local funding was intended to be the most flexible and responsive to public input, to on-the-ground impacts of local land use decisions, to recognized safety concerns, and to creative big bang for buck solutions.  I am determined to restore regional funding lost in 2018.

EXPRESS LANES AND TRANSIT   

     While tolls on the signs, appear to be prohibitive, the truth is that 55% of all users of the Beltway and I-95 express lanes ride free because they are in carpools and vanpools.  Moving as many people as possible in as few vehicles as possible is key to reducing pollution and congestion.  This is why express lanes became a major factor in Northern Virginia’s transportation network.

     84% of those who pay to use the Beltway and 70% who pay to use I-95 express lanes spend less than $20 a month.  They typically only use the express lane if they have a personal emergency and it’s a relief to have the option so they’re not late for an important meeting or picking up the kids from daycare. 

      We must continue to expand options to get cars off the road.  It starts with walkable development and bicycle routes.  Carpools and vanpools are the first layer of transit, which is the only way to serve commuters living in our sprawling suburban stream valley development.  The next layer is bus service where collection points, park and ride lots, or urban concentrations can support adequate ridership.  The third layer is the backbone of fixed routes served by Metrorail and VRE.  Each level is enhanced  when local governments create park and ride lots and establish local feeder bus service to create an integrated network. 

GAS TAX REVENUES FALLING

     If transportation had continued to be funded at the level established when I was Secretary under Governor Baliles, we wouldn’t be dealing with such a huge backlog of unmet needs because $3.5 billion more would have been spent from 1995 to 2005 on transit and road improvements.  The fuel tax had funded over half the state’s construction budget – by 2013 it was less than 1/6. Because of this fall-off, conditions got so bad statewide that in 2013, we finally had the votes to pass a major funding reform package.

     However, the package did not raise the fuel tax – as almost every other state has at least once since 1987.  It only addressed part of the problem by changing the tax to a tax on the price of fuel not on the number of gallons purchased.   Much needed new revenue for maintenance, construction, and transit came from increasing the retail sales tax  – a tax that only 5 other states use for transportation. 

     While I strongly support  initiatives to increase the use of fuel efficient vehicles as essential for the environment; nonetheless, the road infrastructure used by a fuel-efficient vehicle is the same as the gas-guzzler it replaced.  Until we have a means to track the number of miles traveled by every vehicle and tax accordingly, I believe a tax on gas/diesel sales is still the best way to charge road users since:

• Over 20% of Virginia road users are not residents;
• The vast majority of vehicles are still gas/diesel-powered; and
• For the first time between FY16 -FY18, Virginia fuel tax collections actually dropped (-0.6%) even though the vehicle miles traveled went up (3.2%).

NORTHERN VIRGINIA’S FAIR SHARE

     Construction funds must be constitutionally protected.  If they aren’t, under Virginia’s legislative structure, they again can be diverted to maintenance simply with language inserted in the State Budget as they were starting in 2002.  Budget language over-rode the 1986 state law that put construction funds in a separate Fund and diverted money needed predominately by Virginia’s urban crescent was diverted to statewide maintenance.  By 2008, no construction money was left to fund any improvements beyond required state matching funds on federal projects.

      Without constitutionally protecting construction funds, efforts to guarantee a fair share are meaningless.  In 2017, the 1985 formula that I had played a key role in passing was re-examined by VDOT analysts.  They found that its focus on automatically increasing funding for local roads by annual population growth is, indeed, still the best reflection of need.  However, unless construction funds are constitutionally protected, a fair share of zero is zero.

BACKGROUND:
SUMMARY OF THE 2013 FUNDING BREAKTHROUGH

     The 2013 General Assembly passed a package of new transportation funding that added approximately $1.3 billion a year statewide. The major driving forces behind this long overdue break-through were:

• Everything else had been tried, including over-reliance on borrowing taking 80% of the transportation borrowing capacity for the next 25 years.
• By 2017, there would be no state money to get 80-90% federal funding for major projects. Federal gas taxes Virginians had paid would go to other states.
• Seriously deteriorating maintenance finally got rural legislators to the table.
• Virginia lost its rank as the best place to do business solely because of congestion in the urban crescent.

The compromise wasn’t simple. The bottom line is:

• What passed provides the sustained annual funding that study after study underscored we must have to address the backlog of basic needs.
• Northern Virginia gets control and serious funding.  
• Although the gas tax was not increased, Gov McDonnell’s proposal to eliminate it did not pass.

     Over $300 million a year will be raised in Northern Virginia and constitutionally those funds must be spent on transportation in Northern Virginia.  If it is not, the NV taxes are repealed.   Funds must be used for road or transit improvements that reduce congestion.  70% or over $200 million will go to region wide projects.  Northern Virginia – not Richmond – will control what these projects are.
     The rest goes back to the NV locality where it was raised. This local 30% also must be spent to address congestion.  In addition, each local government also must commit locally raised funds (equal to a 12.5¢ real estate tax on business properties), which can be spent more broadly for any non-maintenance purpose.  Fairfax County will control approximately $100 million a year for transportation – half from the bill we passed and half from the required local funding.

     State local road construction didn’t resume until 2016, due to the state taxes being phased-in and an initial $300 million in state funds that went to fund rail to Dulles.  The State had spent zero on local road improvements starting in 2009.
     Transit funding was significantly increased across the board.   State transit support will more than double from the current $130 million.
     The 17.5¢ per gallon gas tax that’s been in place since 1987 wasn’t increased.  But it will be replaced (starting January 2015) with a tax on the wholesale price so that revenue grows with inflation.  The bulk of the new state revenue comes from the tax on car sales going from the current 3% to 4.15% by July 2016 and from raising the sales tax on non-food items across Virginia from 5% to 5.3%.
     In Northern Virginia and in Hampton Roads, the sales tax increases to 6%, with the additional amount going to fund transportation in the region where it is raised.   Northern Virginia also will use a 2% hotel tax and a 15¢ per $100 tax on real estate sales.  These three taxes along with the real estate tax on business properties, the value of car purchases, and the gas tax are an attempt to spread the burden of over all road users and factors that increase congestion.
      Click here for a concise description of NV local, regional, and state funding structure and the promise of regional funding before it was gutted.

ADDITIONAL HISTORIC BACKGROUND

     The links below take you a few presentations I’ve prepared* over the years (*unless otherwise credited.)  Unfortunately, they are as important today as when I first developed them.  They are in order of relevance to understanding the problem rather than by date.              

1. The gap between transportation needs and funding got much worse since I developed this Basic Gas Tax Revenue Chart in 2001. It would look the same today, only the gap would be much wider and the fall-off in gas tax revenue would be much greater.   It represents how far behind we are and how long it will take for the 2013 funding to address the need. 
2. Demand Up Supply Down since 1986 shows the un-balance of traffic growth always exceeding (in order) the growth in transit ridership, car ownership, licensed drivers, and population.  Increased traffic was double population growth and ten times more than expanded road capacity.
3. The cost of highway and street construction rose 89.1% between 1986 and 2006. (Source: U.S. Department of Labor’s Producer Price Index for Highway and Street Construction. The 40% in Fairfax County’s chart above is the general Consumer Price Index)  
4. Although, as Secretary, we’d cut construction time by 20% and increased employee efficiency by over 30%, a decade later, Governor Warner discovered fully 1/3 of the projects promised by the previous Governor had to be cut because funds never had existed to fund them.  Nine separate audits re-structured accurate reporting of on-time and on-budget performance rather than politically convenient promises.  Part of this financial management reform can be found by going to dashboard.virginiadot.org.  These reforms have produced over 80% on-time, on-budget performance in recent years.