The public outcry over tolls planned for the Downtown and Midtown tunnels has illuminated a harsh reality: The state is nearly tapped out of money to build roads.
As a result, state and local leaders are searching for solutions to a transportation funding crisis that has put Virginia on course to run out of money for new construction in five years.
At the urging of Hampton Roads mayors, the leaders of some of Virginia's largest cities will meet in a summit next month to discuss the challenges and to find a unified voice to address these issues with legislators.
State officials, meanwhile, now know that a proposed $5.50 to $11 toll on cars to fund a new U.S. 460 won't fly. So they've announced a restructured financial plan to possibly cut the tolls nearly in half and start construction early next year.
"The Midtown Tunnel project became the poster child for the notion that the commonwealth desperately needs a sufficient, sustainable, reliable revenue stream for transportation needs," Norfolk Mayor Paul Fraim said. "It's been neglected for way too long."
The state gas tax, a primary funding source, has not been raised in 25 years. Efforts to raise the sales tax and dedicate it to transportation have failed.
Meanwhile, maintenance costs for an aging road system are eating deeper into the transportation budget at a time when mega-road projects are needed to ease growing congestion.
Sean Connaughton, Virginia's secretary of transportation, says that if nothing is done, money left for new projects will be gone by 2017 or 2018.
City mayors and county chairmen from what's known as the Golden Crescent region along Interstates 64 and 95 between Hampton Roads and Northern Virginia will hold an unusual summit in Henrico County on June 5.
"We believe our regions working together can effectively influence the General Assembly to address the transportation crisis," an invitation from the Hampton Roads Mayors and Chairs Caucus stated.
Fraim expects that the group will need to gather more than once to identify the shared concerns and develop a consensus on a strategy.
"Local government leaders are ready to take a strong stance," he said.
Local leaders talked Thursday at the Hampton Roads Transportation Planning Organization's annual retreat about getting details of the funding crisis out to the city councils and the public to help spur action.
TPO staff presented numbers to illustrate the depth of the need:
To raise enough money for a $1 billion project that has 50,000 daily users would require either a $4.30 toll; a 9.6 cent regional gas-tax increase; a 0.5 percent regional sales-tax increase; or a combination of a $1.45 toll, 3 cent regional gas tax hike and 0.2 percent regional sales tax increase.
The price tags for the bridges and tunnels needed in Hampton Roads run in the multibillions.
"Citizens here are more reactive" than proactive, said Thomas Shepperd, chairman of the York County Board of Supervisors. "We're not doing a good job of advertising the problem because Joe and Jane Citizen doesn't seem to understand the problem."
"Until citizens give the legislators support and coverage, it will be hard for them to vote for something they think citizens don't want," said Shep Miller of Norfolk, a member of the Commonwealth Transportation Board.
Voters and legislators have resisted raising taxes, which is why the state has turned to the public-private partnerships to build big projects such as the expansion of the Midtown Tunnel.
Elizabeth River Crossings, in partnership with the state, will begin construction later this year on a parallel Midtown tube, improvements to the existing Midtown and Downtown tunnels, and extending the Martin Luther King Freeway. Tunnel tolls will start at $1.84 during rush hour beginning in January 2014.
The next local public-private project in the pipeline is rebuilding U.S. 460 on a new alignment as a limited access highway to provide relief to Interstate 64 and the harbor bridge-tunnels, encourage economic development, provide better access to the ports and improve hurricane evacuation.
Three private proposals for the 55-mile project put tolls at $5.50 to $11 for cars and as much as $75 for tandem tractor-trailers.
"If we don't keep the tolls low, people simply won't use it, and it ends up the investment potentially would not be worth it," Connaughton said. Unlike the Midtown Tunnel, there would be free alternatives to the toll road, including I-64 and the existing U.S. 460.
The state's analysis shows that for the first 10 to 15 years, not enough cars and trucks would use the road to even cover the debt payments, said Dusty Holcombe, deputy director of the Office of Transportation Public-Private Partnerships.
The state has committed $500 million in transportation funds and as much as $250 million in state port funding to the project, which is expected to cost $1.5 billion to $2 billion.
"We don't want to invest this type of money if it's not going to provide relief to I-64," Connaughton said.
So instead of a traditional public-private deal, the state announced last week a new structure that would cut the cost of financing the project, thereby lowering the toll to more like $3.85 to $5.50 for cars and triple that for trucks.
In the new arrangement, the private company selected to build the project would also help secure funding, but the debt would then be transferred to a newly created nonprofit corporation so no private equity, or profit on equity, would be required.
Costs would be reduced further by having VDOT maintain responsibility for operations and maintenance. Additionally, the highway department would set toll rates and increases.
Holcombe said it's the first time the state will tackle this kind of modified public-private partnership.
The three private proposers will have to submit new plans based on this approach by September. The schedule shows a contract would be finalized with one of them by the end of the year, and construction would begin next year. The project would be complete and tolls would begin in 2018.
Debbie Messina, 757-446-2588, firstname.lastname@example.org