WASHINGTON — A $300 million bond issue designed to keep tolls down on the controversial Dulles Toll Road may be in jeopardy as the Virginia General Assembly votes on a proposed budget that does not include the authorization for the debt.

Virginia Senate Democrats agreed last week to a tentative deal removing the bond authorization from the commonwealth's budget after Republicans in the General Assembly and GOP Gov. Robert McDonnell united in opposition to the bonds.

The Dulles Toll Road's revenue is the key component backing bonds to pay for the Washington Metrorail's new Silver Line, an extension of passenger rail service out to Dulles International Airport.

Construction of the Silver Line has been underway since 2009. The Metropolitan Washington Airport Authority said no start date for the next phase has been set.

The original budget proposed by the state Senate, whose 40 members are evenly split between Republicans and Democrats, included $300 million of bonds to defray the need for steep toll increases on the road. The tolls could rise as high as $6.75 by 2020 and $10.75 by 2030, according to the MWAA. Disputes over the validity of the tolling led to a lawsuit contesting the use of toll revenue to pay for the rail project, claiming it's unconstitutional. A citizens' advocacy group from Reston, Va., published a scathing report in late January questioning the road's revenue estimates. A lower court dismissed the suit, but the decision has been appealed to the U.S. Court of Appeals for the Federal Circuit.

The bond authorization was stripped from the budget last week by lawmakers negotiating in special session since the Virginia General Assembly adjourned last month.

The move came after Republican lawmakers and the McDonnell administration made it clear they would not support the money's inclusion in the $85 billion budget, which would not take effect until the end of June 2014 if approved. The GOP controls the 100-member House of Delegates by a better than two-thirds majority.

The governor also previously expressed strong opposition to an expensive underground rail station proposed for Dulles Airport, leading to a revision in the Silver Line plans that now call for an above-ground station.

Bob Chase, president of the Northern Virginia Transportation Alliance, said his group supports the toll road financing of the rail extension, but is not comfortable endorsing a specific course of action on the bond proposal.

"We support the project," said Chase, whose group advocates for project funding across northern Virginia. "I think the question is, where does the money come from? I don't know the answer to that,"

Chase worries about the potential for rising toll rates, but said he doesn't question the practicability of the core business model. "Is it a legitimate source of funding?" he asked of the toll road. "Absolutely." But if the tolls climb to $6.00 or more as suggested by the MWAA's own projections, it could drive vehicles to stay off the road and endanger the entire financing structure. "I'm not sure that's sustainable," Chase said.

The General Assembly is scheduled for a final vote on the budget April 17, where Democrats may still defeat it if votes in the state Senate are along party lines.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.