State and Regional Transportation Funding
(Update in Progress March 2014)
Funding highways and transit is a core state responsibility. The Northern Virginia Transportation Authority has a responsibility to invest regional transportation funds on highway and transit projects of greatest regional significance.
Passage of HB 2313 in 2013 means that over the next six years Virginia will have about $3.5 billion in new state funds and Hampton Roads ($1.3 billion) and Northern Virginia ($1.9 billion) will have new regional funds that they didn’t have before.
The challenge is two-fold
- Invest wisely. First to ensure that new (and existing) state and regional funds are invested wisely.
- Recognize New Funding Is only First Installment. Second, to not lose sight of the fact ultimately more funding will be needed. While these new funds will most definitely make a difference, maintenance and construction backlogs are huge and beyond the ability of this new infusion of funds to address. However, to secure new funding in the future, the state and regions must invest wisely today.
The Northern Virginia Transportation Authority is currently assembling a package of highway and transit projects for FY 2015 to FY 2016 regional transportation funding.
HB 599 enacted in 2012 required that highway and transit projects be evaluated for their ability to reduce daily congestion and to improve regional mobility during a homeland security incident. However, HB 2313 was amended in conference to excuse transit projects from the rating process.
VDOT is currently developing the necessary software to evaluate highway and transit projects on their ability to reduce congestion and improve homeland security evacuation. However, the Authority is hiding behind the letter of the current law, ignoring the intent of HB 599 and balking at the notion that potential transit investments demonstrate an ability to actually reduce congestion.
The rankings are not binding and the Authority is free to select any project regardless of its congestion-reduction potential or regional significance.
The Alliance believes this highway-transit double standard needs to be changed. In the meantime the Alliance believes that an entity such as the Authority seeking to build public confidence that public tax dollars are being wisely invested should test both highway and transit projects for congestion-reduction potential. In this case adhering to the “letter of the law’ is not enough.
To see a list of projects currently being considered for evaluation and eligibility for FY 2015-FY 2016 regional funding, click here.
State Level Outlook
Enactment of HB 2313 provided a much needed, long overdue infusion of maintenance and construction dollars. As a result –
- Virginia’s $33.2 billion Six-Year Transportation Financial Plan (FY 2014-FY 2019) is 24% larger than the previous plan (FY 2013 to FY 2018)
- For the first time in many years state sales tax revenues have replaced federal revenues as the single largest source of revenues. (This is particularly important given the federal highway program’s uncertain future.)
- FY 2014 Commonwealth Transportation Fund revenues are 11% higher than FY 2013.
For more informationon Virginia’s Six-Year Transportation Financial Plan and Budgets, click here.
Northern Virginia Regional Outlook
Since it’s formation in 2002 the Northern Virginia Transportation Authority had no regional funds at its disposal so it mattered not which projects it put in its regional plan. In the latest update (TransAction 2040) localities submitted over 200 highway, transit, bicycle and pedestrian projects for consideration for the REGIONAL plan. All were evaluated and accepted as being regionally significant.
Passage of HB 2313 means that the Authority is now responsible for investing $300 million annually. (Note: Actually, under HB 2313, 30% of these funds are distributed to each of the Authority’s 9 member jurisdictions in proportion to the amount of regional revenue collected within each jurisdiction. The 70%-30% split is another example of how politics continue to play a major role in transportation in Northern Virginia. Transportation needs are not proportional to individual jurisdictions. That split combined with the fact that by law over time each jurisdiction is required to receive back transportation benefits equal to the amount that it contributes in regional funds makes it even more difficult to address major regional needs. In contrast, in Hampton Roads all regional funds go into one regional pot dedicated to regional significant investments.)
The extent to which the Authority is able to focus on projects of greatest regional significance as opposed to local needs remains to be seen.
The Authority’s initial attempt to assemble a package of highway and transit projects for FY 2014 pay-as-you-go and bond funds produced mixed results. A number of the local-government-recommended candidates for regional transportation dollars included local bus shelters, buses, and trail lighting. Some where ultimately eliminated, others made the final cut.
For more information on projects selected for FY 2014 regional funding and the Authority, click here.
Highway and Transit: Different Standards Apply
Another element in HB 2313 that may need to be addressed is that to be eligible for regional funds highway projects need to be evaluated for regional significance and their ability to reduce daily congestion and improve mobility in times of a homeland security incident. Transit investments simply need to add capacity. (Regional funds cannot be used for maintenance or operation of highways or transit.)
In Northern Virginia about 85% of all daily trips depend upon the region’s highway network. Only 5-6% depends upon its transit network. (Note: During rush hours, transit usage is considerably higher, but only 20% of all daily trips are commuting trips.)
Currently, the Authority is investing about 55% of regional dollars in the highway network and about 45% in public transit. The issue is not roads versus transit and no one suggests that the distribution of funds should be directly in proportion to actual use or mode split. However, traffic congestion and time lost sitting in traffic are arguably the single greatest threats to Northern Virginia’s economy and quality of life. At some point the standard by which transportation investments are measured must be higher than simply “adds capacity.”
New HIstoric State and Regional Transportation Funding - Background
It only took 27 years.
For the first time since 1986, the Virginia General Assembly in 2013 approved new, long-term transportation funding.
HB 2313, a compromise package enacted with bi-partisan support in both Houses, and inspired by Governor Bob McDonnell’s leadership provides $3.5 billion in new state funding and $2.6 billion in new regional funding for Hampton Roads and Northern Virginia over the next five years.
For the legislative background, including recorded votes, click here.
For an overview of HB 2313, click here.
Private Sector Leadership:
Successes like the enactment of HB 2313 don’t just happen. Public officials needed to know of the strong support for new transportation funding and the Alliance helped fulfill this need.
Since 2006 the Alliance has led a coalition of Northern Virginia business organizations (Northern Virginia Business Transportation Coalition) in petitioning the Virginia General Assembly to enact new long-term state and regional funding.
In 2007 the Alliance and the Coalition were instrumental in securing the passage of HB 3202 which provided hundreds of millions of new regional transportation funds to Northern Virginia and Hampton Roads. Unfortunately the Virginia Supreme Court declared much of that legislation unconstitutional (one major exception being new state transportation bonds).
However, the Alliance and the Coalition continued to press for new funding.
In 2011 the Alliance, 27 other Northern Virginia business organizations, the Fairfax and Prince William County Boards of Supervisors, and the Northern Virginia Regional Commission 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 more information on transportation funding initiatives in the 2012 and 2011 Virginia General Assembly sessions, see below.
2012 General Assembly Session:
The 2012 Virginia General Assembly adjourned with no serious progress on transportation funding.
Governor McDonnell and the GOP-controlled House of Delegates proposed a package of initiatives that included increasing the portion of the retail sales tax dedicated to transportation from .5% to .75% over an 8-year period and selling naming rights to transportation infrastructure. The evenly split Senate proposed indexing the gas tax to the Producer Price Index for Highway Construction Materials.
The House defeated the Senate proposal, the Senate defeated the House proposal and the session ended the same as the previous 26 sessions with no new long-term transportation funding.
For a description of Governor McDonnell’s initial 2012 Omnibus Transportation Funding Bill, click here.
For a description of the Senate’s initial 2012 proposal, click here.
On the plus side HB 599 and SB 531 directing VDOT to evaluate Northern Virginia highway and transit projects on their ability to reduce congestion did become law.
2011 General Assembly Session:
During the 2011 General Assembly session, the Alliance supported Governor McDonnell's $3.2 billion transportation package. While not the new, reliable, long-term funding Virginia's transportation program needs, the $3.2 billion infusion helps jump start and complete hundreds of delayed projects.
For more information, click here.
What You Need to Know about Transportation
1) Virginia operates the nation’s third largest state highway network with 68,000 miles and 12,000 bridges. Only Texas and North Carolina have bigger systems.
2) Virginia's highway network is aging and in a growing state of disrepair. VDOT's latest pavement surface analysis finds that 19.7 percent of Virginia's interstate lane miles and 22.4 percent of its primary roads lane miles have poor or very poor pavement surfaces. More alarming is the fact that 35.2 percent, or 27,808, of Virginia's 79,000 lane-miles of secondary road pavements are deficient.
3) Northern Virginia has added more than 1,000,000 people in the last 25 years and more vehicles than people.
4) Demand on Northern Virginia’s network will continue to increase. In the next 25 years, Northern Virginia is projected to add 350,000 households (43%), 651,000 jobs (53%) and 918,000 people (42%).
5) A constitutional amendment protecting the Transportation Trust Fund from being diverted to the General Fund will not protect construction dollars being diverted to maintenance and thus will not solve the problem. The TTF and HMOF should be separate with no transfers allowed. This would stop the drain on the TTF and force the General Assembly to fund maintenance.
6) Public-private partnerships (PPTAs) are not enough. Private firms will only build new roads that can make a profit. Since most transportation projects are not profitable, PPTA options are limited. Most PPTAs requires some public funds. Virginia currently lacks funds to support an aggressive PPTA program. At best, PPTAs are estimated to be capable of meeting 20% of Virginia’s needs.
Commonwealth Transportation Fund (Transportation Revenues and Allocations)
What different funding options generate
VDOT Budget FY 2013
Commonwealth Transportation Fund Six-Year Financial Plan (FY2014-FY2019)