Regional transportation authorities ruled unconstitutional

The Virginia Supreme Court dealt a crippling blow to the region’s transportation plans on Friday when it ruled that the General Assembly cannot delegate taxing power to nonelected bodies.

The ruling means that the seven taxes and fees the Hampton Roads Transportation Authority had planned to impose in May to finance about $9 billion in road projects cannot be collected.

Because it did not strike down the state’s right to create it, the high court left open the possibility that the authority could survive. But the court placed responsibility for raising revenue to finance the road projects squarely on the shoulders of state legislators.

The unanimous ruling hit the General Assembly like a bomb, leaving lawmakers in Richmond dazed about what to do on the complex and politically charged issue of transportation.

They also were uncertain whether a new plan could be pieced together before the legislature’s scheduled adjournment March 8. Many lawmakers said they would spend the weekend digesting the decision before settling on a next step.

Art Collins, acting executive director of the Hampton Roads Transportation Authority, characterized the ruling in stark terms.

“We just went back 12 years,” he said. “We have no valid transportation plan now. It is just nuclear – that’s the only way to describe it. There is no reading between the lines. They said you can’t do it.”

Gov. Timothy M. Kaine, who met Friday afternoon with House and Senate leaders, said there was clear consensus that the General Assembly should call a special session to address transportation later this year.

“It would be very hard to wrestle with this over the course of the next week,” Kaine said.

Many Democratic lawmakers said the ruling was a repudiation of the House Republican leadership, which had sponsored the road bill last year that left the decision about raising taxes and fees in the hands of the regional authorities.

“I think the message from the court opinion is pretty clear,” Kaine said. “If we’re going to wrestle with the transportation infrastructure, then General Assembly members have to go up on the board and vote and not hand that responsibility off to others.”

Upon learning of the decision, Del. Lionell Spruill Sr., D-Chesapeake, uttered a triumphant “Yes!”

“First of all, I didn’t vote for it anyway,” Spruill said. “My question is, 'How can a city tax another city?’ So I was right. I voted against it because it’s not right for a group of cities to form an authority to tax another city.”

If lawmakers were uncertain about their next move, Virginia’s two most populous regions were reeling.

In Hampton Roads, there now appears to be no clear path to address nagging problems of congestion at tunnels and bridges, especially the Hampton Roads Bridge-Tunnel.

Long-range road-building plans – already years behind schedule and growing in cost – will be set back again unless the Assembly can act quickly, regional planners said.

Plans for widening Interstate 64 on the Peninsula and at the chronically congested High-Rise Bridge in Chesapeake, as well as a safer U.S. 460, a hurricane evacuation route and the third crossing at Hampton Roads, were again in limbo.

Norfolk Mayor Paul Fraim, the authority’s chairman, said he plans to meet with Kaine on Monday to discuss the region’s next move.

“It’s a setback,” Fraim said.

Opponents of the authority, who have long argued it was constitutionally dubious, rejoiced, saying the high court supported their long struggle to force lawmakers to ask all Virginians, not just the large metropolitan regions, to pay for road improvements.

The groups have also said they would support tax increases if the General Assembly first approved a constitutional amendment protecting the money for any use other than congestion relief. Numerous efforts to accomplish that have failed.

“We are ecstatic about it,” said Robert Dean, head of the Virginia Beach Taxpayer Alliance, which supported the suit against the authorities.

“We relied heavily on the common sense of the Supreme Court,” Dean said. “It’s a great day for the taxpayers of Hampton Roads and Northern Virginia. Now what the General Assembly needs to do is go back to the drawing board and listen to the taxpayers who have to fund these projects.”

Sen. Frank Wagner, R-Virginia Beach, said: “We have serious transportation problems in Hampton Roads. Everybody knows that. This was the solution to fund those transportation problems.”

The court ruling “doesn’t make the cost go away. What it does mean is we’re going to have to come up with a creative plan to get those projects back in the mill and move them forward again,” Wagner said.

If the worries of Hampton Roads were heightened, they were much worse in Northern Virginia, where the authority has already begun collecting taxes and fees to support is regional projects.

Christopher Zimmerman, chairman of the Northern Virginia Transportation Authority, called the ruling a “severe setback.”

The authority, which is in the process of hiring staff, has already approved a $497 million plan that includes $50 million a year for Washington’s Metro system, $25 million a year for the Virginia Regional Express, and numerous road projects.

“We put that all in place this year, and now that is all at risk,” Zimmerman said. “The General Assembly needs to act immediately. This is a problem they can fix. … Without a fix, the NVTA will be out of business.”

Zimmerman said he did not know how much tax revenue the authority had collected to date, but none of it has been spent.

The Supreme Court ruling dealt directly with the Northern Virginia Transportation Authority but also applied to Hampton Roads.

The court specifically ruled on two major issues: whether the law that created the authorities was constitutional, and whether the state constitution prohibits lawmakers from delegating the power of taxation to a political subdivision, such as an authority, to address transportation issues.

The law was part of HB3202, a landmark bill that legislators spent months crafting in early 2007 after previous efforts, including two failed special sessions, ended in a stalemate over higher taxes.

A controversial portion of that transportation bill – the levying of expensive fees on drivers convicted of major driving infractions – was overturned by lawmakers earlier this year after strong public protest.

The regional authorities were created as a compromise intended to appease rural lawmakers who don’t want to raise state taxes to help traffic-clogged regions and urban legislators who were betting their constituents were willing to shoulder higher bills if they could be used on local projects.

The bill also contained provisions that require stronger transportation planning to deal with urban sprawl, and a $3 billion bond offering to raise cash to support statewide programs, especially maintenance, which is consuming increasing amounts of cash needed for construction.

The court did not rule on those features, allowing them to remain in effect. But its comment on the authorities was unambiguous.

In enacting HB3202 last year, the court said, “The General Assembly failed to adhere to the mandates of accountability and transparency that the Constitution requires when the General Assembly exercises legislative taxing authority permitted by the constitution.”

If higher taxes are needed, then it’s the responsibility of the General Assembly to raise them, the court said. They cannot delegate their taxing authority to a nonelected body, such as the NVTA.

The Assembly also may not indirectly impose taxes on citizens without a majority of the legislature agreeing, the court said. The ruling was written by Justice Bernard Goodwyn , who was appointed to the court this year and had been a Circuit Court judge in Chesapeake.

Friday’s ruling stems from a suit filed in July by the Northern Virginia authority in Arlington County Circuit Court seeking to clarify whether the bonds it wanted to issue were valid and whether the taxes and fees were constitutionally sound.

Kaine, Attorney General Bob McDonnell and House Speaker William Howell, R-Stafford, who sponsored the bill, signed on as plaintiffs.

The Loudoun County Board opposed the issuing of the bonds, and a group of citizens, led by Del. Robert Marshall, R-Prince William, filed suit against the bonds.

The lower court later held that the Northern Virginia authority was “within the legislative powers of the General Assembly” and did not violate the state constitution.

It also said the regional fees and taxes raised to pay for the bonds are “valid and legal and meet the requirement of the Constitution of Virginia.”

The Supreme Court’s ruling overrides that judgment.

 Staff writer Julian Walker contributed to this report. 

Tom Holden, (757) 446-2331, tom.holden@pilotonline.com