Virginia’s Transportation Funding Crisis
(Updated July 2010)
Alliance Position:
The Alliance believes the objective must be to secure new, sustainable, dedicated revenues totaling a minimum of $400 million per year for Northern Virginia, $200 million per year for Hampton Roads and $1 billion per year for statewide maintenance and construction.
In September 2009 the Alliance and 16 other Northern Virginia organizations adopted a resolution stating that all funding options should be on the table, that the Commonwealth's transportation funding crisis could not be solved without new dedicated taxes and fees, and that "no new transportation tax" pledges by political candidates are contrary to the Commonwealth's best interests. To read the resolution, click here.
For past Alliance Alerts involving transportation funding, click here.
Current Situation:
Virginia’s transportation fiscal health is poor and deteriorating. Years of failure by state officials to provide new sustainable revenue are now compounded by declining, recession-induced maintenance and construction revenues and rising costs. Decreasing federal revenues and increasing uncertainty as to at what levels and when federal involvement will be reauthorized further darken the picture.
The Virginia General Assembly’s Consistent Failure to Address Needs:
With the passage of HB 3202 in 2007, it was thought that modest progress had been achieved in securing new statewide and regional transportation funding. For information on the 2007 General Assembly session, click here.
However, on February 29, 2008 such hope began to unravel when the Virginia Supreme Court ruled the regional funding packages for Northern Virginia and Hampton Roads unconstitutional because the government entities (regional authorities) charged with enacting them were not elected bodies.
HB 3202’s benefits were further diminished when the 2008 Virginia General Assembly repealed the abusive driver fees without replacing the estimated $60 million per year they were expected to generate for statewide maintenance.
Efforts to restore lost HB 3202 revenues in the 2008 regular General Assembly session were unsuccessful. Governor Kaine then scheduled a Special Legislative Session on Transportation Funding that began on June 23, 2008. However, after meeting for five days over a two week period, the General Assembly adjourned on July 10, 2008 without taking action. For more information on the 2008 General Assembly regular and special sessions, click here.
Despite state and federal transportation revenue declines in excess of $2 billion, and the cancellation or delay of hundreds of projects, the Virginia General Assembly adjourned the 2009 and 2010 sessions without providing a dime in new transportation funding.
For more information on the 2010 General Assembly Session, click here.
For more information on the 2009 General Assembly session, click here.
Highway Maintenance and Operating Funds Continues to Decline:
Virginia's highway dollars are concentrated in two funds -- the Transportation Trust Fund (TTF-for construction) and the Highway Maintenance and Operating Fund (HMOF). State law gives maintenance needs first call on all highway dollars.
In 2002, HMOF funding was inadequate to meet needs and $3.6 million was transfered from the TTF for maintenance. This year, $527 million will be transfered from construction to maintenance leaving only $ million in state construction dollars for the entire Commonwealth.
Nearly $200 million in federal construction dollars are also being diverted to maintenance.
As a result, not only will Virginia not be able to provide for the transportation construction projects once envisioned, but will likely result in even more delays and cancellations of construction projects needed to get Virginia moving again
For more information on past and projected diversions, please click here.
Construction Costs Continue to Soar:
Since 2003, the Producer Price Index (PPI) for inputs for highway and street construction increased 77%; quadruple the rate of the Consumer Price Index (CPI) at 19%. Other examples of cost increases are even more dramatic:
- Diesel fuel up 333%
- Iron and steel scrap up 247%
- Asphalt paving mixture up 108%
Far from saving taxpayers money, our legislators’ inability to address critical transportation funding shortfalls is costing taxpayers hundreds of millions of dollars in higher construction costs -- not to mention hundreds of millions of hours idling in traffic, lost family time and sleep.
For more information, click here.
VDOT Budget Revenues Free Fall:
In August 2009, Secretary of Transportation Pierce Homer announced revised projections showing that over the next six years, Virginia’s state and federal transportation revenues are expected to decline by $4.6 billion. Of this amount, more than $3 billion will be from the Virginia Department of Transportation’s (VDOT) budget.
For more information, click here.
For More Information: To learn more about transportation funding click on the links below:
Statewide and regional funding needs
What you need to know about transportation funding
What different funding options generate