ABINGDON, Va. — Paying for $2 billion in needed improvements along Interstate 81 could include charging tolls for passenger cars and commercial trucks, sales and fuel tax increases or some combination of those, according to a draft plan.
State transportation officials unveiled details of the I-81 plan Monday during a public hearing at the Southwest Virginia Higher Education Center in Abingdon. The draft plan proposes funding 72 previously identified safety and congestion improvements along the 325-mile route between Bristol and Winchester. The study was ordered by the General Assembly to identify needed improvements and an independent funding source separate of the state’s annual transportation budget.
When the study began in the spring, the funding conversation mentioned taxes in the corridor area and potentially charging tolls to large, commercial vehicles. The draft plan, which will be forwarded to the Commonwealth Transportation Board, includes tolling cars.
“The study actually named tolling heavy commercial vehicles, but it didn’t prohibit us from looking at a myriad of different sources,” Virginia Secretary of Transportation Shannon Valentine said after the meeting.
“This way, it allows us to compare, contrast and see what kind of funding options might be possible,” she said. “As we worked with the trucking industry, they have been very firm about their belief that everyone should have some skin in the game in supporting improvements along the corridor. We want to make sure, as we go through this, to see the value of different financing options.”
As presented, the current options include a 0.7 percent increase in the retail sales and use tax, which would generate an estimated $105 million annually, a 2.1 percent increase in regional fuels tax, which could generate about $60 million annually, and a variable toll rate, which would generate between $135 million to $155 million per year.
If applied, the tax hikes would raise the sales and use tax from 5.3 percent to 6 percent in all localities touched by the I-81 corridor. It could raise the tax on fuel in those areas from 5.1 percent to 7.2 percent, according to Deputy Secretary Neal Donohue.
The draft plan includes “time of day” tolling — charging higher rates at peak travel times during the day and lower rates overnight, plus offering commuters an annual pass designed to reduce costs.
Study figures are based on charging commercial trucks 17 cents per mile, which equates to $55.25 per truck trip the entire length of I-81 in Virginia. The study shows that every year I-81 handles about 11.7 million trucks carrying $312 billion in cargo and supplies.
The tolling idea has considerable opposition.
Brett Vassey, president and CEO of the Virginia Manufacturers Association, told transportation leaders Monday night that tolling would not only hurt businesses, it might prompt manufacturers to leave the state. Vassey said his organization represents 5,000 manufacturing firms with 230,000 workers.
“We’re committed to working collaboratively to identify and prioritize projects, technologies and policies that will improve safety and expand capacity along the I-81 corridor,” Vassey said. “However, we cannot support tolling of existing interstates and/or truck-only tolling.”
Vassey said the overwhelming majority of manufacturers along I-81 receive raw goods and ship finished products via commercial trucks.
“Investments are already being held today by companies on this corridor just by the threat of I-81 tolling,” Vassey said. “To be clear, we do not have to pay a toll. We will just move production to another operation. … We have choices, and we are a mobile industry. If the economics don’t work, we will move production to a location where they do. If we don’t have a choice — like our small and medium companies — it just makes them less competitive.”
Earlier this month, the Richmond-based Alliance for Toll Free Interstates renewed its opposition to the plan by submitting a letter to Valentine’s office.
It reads, in part, “Tolling trucks using I-81 will raise costs for moving goods through the supply chain, hurting the competitiveness of local companies. Restaurants, convenience stores, travel plazas and gas stations operating near the interstate will face higher costs from manufacturers and shippers, who will be forced to charge more to transport goods by truck. Everyday consumers will be shouldering the burden by paying more for goods. A toll will become nothing more than an underhanded tax on the general public. Inevitably, truck tolls will have a chilling effect on consumer activity.”
The alliance urged Valentine to not even include tolls as a funding option in the plan presented to the Commonwealth Transportation Board.
Plans presented in August identified $4 billion in needed improvements for the entire corridor, including 26 projects valued at $550 million needed in areas served by the Bristol District office from Bristol to east of Wytheville.
Due to significantly scaling back the scope of what was a proposed $330 million project at the I-81, I-77 interchange in Wytheville, they can achieve many of the same safety improvements, and the region’s entire price tag for 26 projects now stands at $252 million.
Proposed improvements for areas in the Salem District exceed $882 million, and the Staunton district projects total about $886 million.
“We will present all this to the CTB. Their main focus is going to be the project prioritization, how that was developed, looking at the projects and making sure they are able to recommend that to the General Assembly,” Valentine said. “The funding options, we will be presenting that to the Commonwealth Transportation Board, but the funding options really go back to the General Assembly. They’ll [General Assembly] make the funding decisions.”
The final plan might include another funding option, Valentine said after the meeting, but she declined to say what it would be.
“Our job is to identify and present the information. We have been informed of one other option we didn’t initially consider, so we may be adding one more to the mix,” Valentine said.
The board meets Monday and Tuesday in Norfolk and is expected to finalize the plan at its Dec. 4-5 meeting and forward it to state lawmakers for the 2019 session that begins in January.