Backlash from drivers, trucking industries and anti-toll organizations has put a potential funding source for road improvements in jeopardy as several states acquiesce to the groups' concerns.
In Virginia, Gov. Ralph Northam signed Senate Bill 1716 and House Bill 2718 into law on April 3 that relies on increases in gas taxes and truck-registration fees to finance long-sought improvements to Interstate 81.
Lawmakers passed the bills after first rejecting tolls, a funding source that was opposed by trucking and other anti-toll groups.
“For too long, we have discussed action to make Interstate 81, a major transportation artery, safer and more reliable for all who travel on it and I am pleased we have finally arrived at a solution,” Northam, a Democrat, said in a statement. “This historic package will ensure $2 billion in improvements to this important corridor are implemented, while also generating critical revenue for interstates across the Commonwealth.”
The taxes and fees funding the legislation are expected to be leveraged with bonds and low-interest federal loans for improvements along the 326-mile interstate.
I-81 is Virginia’s longest interstate, and it's a critical part of the east coast’s freight network. The majority of the route is two lanes in each direction, but its capacity is constrained by rolling terrain that rises above and falls below the highway, especially when accidents occur.
The corridor flows through 12 counties, and has 90 interchanges and major connections with I-66, I-64, I-77 and I-581. It experiences more than 2,000 vehicle crashes annually with 26% involving heavy trucks.
The state developed a capital improvement and funding plan in December 2018 that first sparked opposition to tolling.
The Alliance for Toll-Free Interstates applauded Virginia’s plan to fund improvements on the route through mechanisms other than tolls.
“We know Virginians want to improve I-81, and are willing to pay for it. But how they pay for it matters and they let that opinion be known,” said Stephanie Kane, ATFI’s spokeswoman. “We are glad the governor abandoned his push for tolls in favor of more common-sense transportation funding methods.”
ATFI is also tracking efforts to place tolls on interstates and highways in Indiana, Connecticut, Rhode Island, Illinois, Alabama, Mississippi and Kentucky, Kane told The Bond Buyer Tuesday.
In Texas, State Rep. Matt Krause. R-Fort Worth, has filed House Bill 1951, which would require voter approval of new toll projects. Entities in charge of such roads would have to remove tolls once bonds have been paid off, although there are provisions for extending the user fees.
Other states have encountered criticism about tolling, and the alleged overuse of the charges in some areas.
In Florida, in response to drivers’ complaints about the rising use of tolls, state lawmakers filed several bills this year that would reduce collections by a number of agencies with outstanding debt.
Senate bill 898 and House Bill 385 would dissolve the Miami-Dade County Expressway Authority and transfer its bonds and toll collections to a new agency, with new leadership, called the Greater Miami Expressway Agency. The bills would prohibit the new agency from increasing tolls until 2029 and would require a two-thirds vote of the governing body to increase rates, instead of the current simple majority vote.
The bills would also require that all drivers with SunPass transponders receive a 25% rebate when any toll is incurred. SunPass is used widely throughout Florida by expressway authorities, the Florida Department of Transportation and the state Turnpike Authority.
The legislative push to curb tolls in Miami-Dade County began in recent years, when local lawmakers passed bills in 2017 and 2018 aimed at trimming costs for local drivers frustrated by increasing charges imposed by overlapping state and local agencies.
The Miami-Dade County Expressway Authority filed a lawsuit last year contending that the legislation passed in prior years impaired its contract with bondholders. The suit is pending.
This year’s effort to reduce drivers’ costs has caused concern among Florida’s seven other expressway agencies and four transit authorities, who are members of a statewide organization called TEAMFL and think they could be the subject of similar bills in the future.
“The toll changes mandated by [the Miami-Dade bill] may have significantly broader implications and consequences, perhaps unintended, which may weaken our state’s ability to issue future debt and use tolling to make the infrastructure investments, which will be so badly needed in support of continued strong economic growth,” a white paper on the legislation by TEAMFL said.
The organization is also concerned about Senate Bill 1406, which would ban all of Florida’s expressway authorities from collecting tolls if speeds fall below 40 mph. The bill doesn’t make an exemption for expressways tied to outstanding debt.
If SB 1406 passes, it would have “massive negative implications on bond toll covenants,” TEAMFL said.
The Florida Legislature is also considering several other bills that would affect toll collections during the current session, which ends May 3.
Last month, the American Trucking Associations along with three industry carriers filed an appeal of a federal district court’s dismissal of their suit challenging Rhode Island’s truck-only toll plan as unconstitutional.
The suit, originally filed in July 2018, contended that the RhodeWorks initiative discriminates against interstate trucking companies and impedes the flow of interstate commerce. The case was dismissed March 19, and the ATA filed its appeal March 28.
The ATA said the court ruling did not address the merits of its constitutional claim, and held only that ATA’s challenge could not proceed in federal court.
“Since RhodeWorks was first proposed, the trucking industry has been strong and united in opposition to this extortionate plan,” said ATA President Chris Spear. “While we are disappointed the district court’s decision means further delay in seeing these tolls rolled back, our appeal of the dismissal of our case on a technicality should demonstrate to the state that this fight is by no means over.”
In Virginia, push back against tolls arose during a study lawmakers ordered last year to determine what improvements were needed to I-81. It included a mandate to consider tolls as a source of funding, along with others.
The plan said $2 billion in capital improvements were needed, plus $200 million for operational enhancements such as speed enforcement and additional parking for trucks.
For financing, the plan recommended tolling trucks and non-commuters, or funding the plan with a regional motor vehicle fuel tax and a retail sales and use tax collected in the counties along I-81.
The Alliance for Toll-Free Interstates said putting charges on the interstate would increase shipping costs for goods, suppress consumer activity, waste revenues on bureaucratic administration, double-tax businesses, divert traffic onto local roads, and negatively impact residents and communities located around toll facilities.
“By using financing mechanisms other than tolls, Virginia is using funding strategies that allow the commonwealth to maintain control of implementation and enable more money to go toward improving interstates rather than wasting money on tolling bureaucracies,” ATFI’s Kane said. “This is smart policy, and other states should take notice.”
Dale Bennett, president of the Virginia Trucking Association, said in his comments on the plan that his group believed that tolling would be unlawful under the U.S. Constitution because it represents an impermissible burden on interstate commerce.
In response to the governor signing the tax and fee funding bill, Bennett said it would address improvements by raising funds from all highway users.
“Under this plan, the trucking industry is stepping up to the plate to pay a large share of the cost of improving I-81 and other interstates in Virginia,” he said. “The proposed plan significantly impacts the trucking industry and our customers, but it is more efficient and less harmful than tolling existing highways.”
Despite opposition to tolls, the funding mechanism was included in bills filed for this year’s legislative session. When lawmakers balked at the funding, Northam proposed amendments to increase the regional gas tax and impose statewide increases in taxes on diesel fuel and truck registrations to fund work on I-81 and other areas of the state.
Northam said using taxes and fees created equity by bringing Virginia’s truck registration fees and diesel and road tax rates in line with other states along the 855-mile I-81 corridor, and it ensures all users contribute to funding road work in the state.
Delegate Tony Wilt, R- Harrisonburg, whose family is in the trucking business, said funding I-81 improvements was a top priority for him. He voted against the bills when they proposed using tolls, but later voted for them when the plan was changed to taxes and fees.
While Wilt said the bill will still pose additional costs on his family’s trucking business, “there is absolutely a cost to all citizens and businesses along the corridor if we continue to do nothing.”
“This plan is a more equitable approach than some previously considered and will fund improvements that result in more efficient traffic flow and a decrease in the terrible loss of life so many families have had to endure,” he said.
