I-81 Tolls Make Sense

The prospect of establishing a funding source for improving Interstate 81 is getting lots of attention in Richmond during the current session of the General Assembly. One of the top three legislative priorities the Lynchburg Regional Business Alliance has adopted is funding for I-81 redevelopment.

On Dec. 3, the Virginia Department of Transportation (VDOT), the Office of Intermodal Planning and Investment and the Virginia Department of Rail and Public Transport released their I-81 Corridor Improvement Plan Executive Summary. In it, VDOT provides great detail of their findings from the I-81 study, highlights why improvements are necessary, identifies $4.3 billion in recommended improvements (with the plan recommending $2.04 billion in improvements for the next seven to 10 years), financing options and an economic impact analysis. We know many people have expressed either concern over tolling, and that message has been heard loud and clear. The intent here is not to discuss the political reasoning for one proposal or the other; it is simply to determine what would improve the interstate in the most cost-effective and quickest manner.

In brief, the first bill would raise the overall gas tax in the commonwealth and allocate a certain percentage of this revenue for I-81 improvements. After doing some research, however, this proposal is not best suited to improve the interstate. First, this would only allocate a few hundred million dollars out of a $2 billion to $4 billion dollar project.

Additionally, in a Senate Transportation Committee meeting at the beginning of this session, Finance Secretary Aubrey Layne and Transportation Secretary Shannon Valentine stated there has been an increase in ridership on the commonwealth’s transportation system with a net-neutral gain in fuels tax revenue. Meaning, even with more vehicles on the road, the state is not seeing more funds through the current fuel tax system. This is a cause for concern; with more fuel efficient vehicles on the roads, a fuel tax will not be able to fund our transportation projects, especially on I-81.

Second, even if the fuels tax is raised statewide, there is no guarantee these funds pan out accordingly. Based on the past few years’ data, there could still be more drivers in the commonwealth in the future with net-neutral gains in the revenue. Furthermore, this proposal may be a fuels tax on just the I-81 corridor, putting the onus for funding the improvements on the residents who live in that region, not the 60 percent transient/out-of-state users of the road. Finally, with debt financing, this proposal would have a AA bond rating. Bottom line, a fuels tax will not raise enough funds for improving I-81.

This brings us to the second proposal, the tolling and annual pass system. There are many misconceptions on this topic, and our hope is to educate, inform and shed light on these bills. First, there would be six toll gantries spread across the road at increments on or around 50 miles. These gantries are not the tolling booths of old; rather, these structures allow traffic to keep their speed while driving down the interstate, allowing vehicles to not cause congestion to pay the toll. A driver would receive a bill from the commonwealth totaling the cost of the miles used. It’s important to note that these tolls would also be the cheapest east of the Mississippi River, at 17 cents per mile for Class 6 or higher trucks and two-thirds of that for other vehicles.

The annual pass would allow a vehicle operator to purchase a pass that offers a discount on tolls imposed on I-81. The language in the bill says this pass would cost a “reasonable fee” but should “not exceed the amount of a full length round trip” on the road. If a pass is purchased, the vehicle may have unlimited access to the interstate for the entire year, at a discounted price.

With “more than one-third of all trucks and nearly 50 percent of the State’s value of goods transported along this 325-mile corridor” and connections with “five other interstates … 21 cities and towns, 13 counties, and 25 colleges and universities between the Tennessee and West Virginia border,” it is important that financing options be able to capture funds through any and all traffic on the road, including residential, commuter and truck drivers, plus travelers from out of state (Quotes taken from the VDOT study on I-81). Conversely, the tolling option allows all motor traffic to fund the improvements on the road they travel on in a non-discriminating way. These options will also “generate enough revenue to meet the $2.04 billion need with debt financing.” (This proposal would allow the commonwealth to receive AAA bond rating for debt financing, quotes taken from the VDOT study on I-81).

The question legislators should consider is this: does the state impose a fuels tax mainly taxes Virginians or capture funding from the 60 percent of traffic that comes from out of state? If overwhelming majority of I-81 traffic is from out-of-state residents, why should only Virginians pay for the road?

With this data in mind, the Alliance endorses House Bill 2718 and Senate Bill 1716, which are bipartisan and would implement a tolling and annual pass system, along with establishing the I-81 Corridor Improvement Plan because we see it as the best way to improve the interstate.

Faraldi is director of government relations for the Lynchburg Regional Business Alliance. Email him at CFaraldi@lynchburgregion.org.