Tuesday, August 22, 2006
Transportation needs funding
From the RoundTable blog
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Stan Lanford
Lanford retired as co-founder and CEO of Lanford Brothers Co. and worked for 50 years as a highway contractor. He is a former chairman of the American Road and Transportation Builders Association.
Transportation needs continue to grow as Virginia grows. Our population has doubled in the 50 years since the interstate system was founded in 1956. The number of vehicles using our roads has increased more than 400 percent. The last time we had a user fee increase was in 1987, and we made a lot of progress spending those funds. Increasing use of the transportation system and the steady pace of inflation have decreased the buying power of our tax funds by 40 percent over this last 19 years.
At the same time, we have seen ever higher standards for the design and construction of our highways that have added to the cost per mile, including wider and paved shoulders, more signs, pavement markings, guard rails, wider bridges, sound barrier walls and landscaping.
What did we get by doing this? We got safer roads and higher costs and a growing economy paying better wages to workers. Our highway fatalities have consistently dropped due in large part to the features we have built into the system along with better and more expensive automobiles.
Lives saved and accidents prevented have a value not always easy to quantify. The Road Information Program, a national transportation research group, estimates each Virginia resident saved $2,957 per year in reduced accident costs such as medical costs and lost productivity, the value of saved time and fuel, and reduced apparel, food, housing and transportation costs. Since 1956, average household incomes have increased by a factor of 10 times.
Consider the economic effect on our region if the truck assembly operation at Dublin cannot get its parts and supplies delivered "just in time." Will it not be tempted to find a site with more dependable systems for delivery? The loss of jobs would be a major blow to our region's economy.
TRIP reports that more than 80 percent of all freight in Virginia's economy is delivered by trucks. These trucks must have excellent roads to meet the demands of customers.
Quality of life is important to our citizens. That may mean cutting time spent in traffic jams in Northern Virginia, but in Southwest Virginia it may mean holding a well-paid job.
TRIP estimates that Virginians spend $4 billion each year, or more than $500 per citizen, on wasted time due to congestion and the auto repairs and accidents caused by outdated roads or inadequate maintenance.
The average Virginian driving 15,000 miles per year will pay $140 per year in fuel taxes. Since the federal fuel tax is about the same amount as the state tax, the total average fuel tax for a year is about $280. Unfortunately, these taxes are not sufficient to pay for our needs.
The commonwealth's VTRANS 2025 study suggests that unfunded road, transit and inner-city rail needs over the next 20 years exceed $100 billion. We also have a $2 billion backlog of maintenance projects.
In the Salem District, VDOT will spend $5.3 million less on our secondary roads in 2006 than was spent in 1996. The urban roads system will have $4.6 million less to spend compared to 10 years ago. The reduction in spending will have some undesirable consequences: capacity and safety improvements will be stopped or delayed, and many smaller contractors will be starved out of business. Ultimately that means higher prices as we reduce the number of bidders on the small projects.
The revenue to pay for all these needs will be paid by the users. Even if you do not pay more in taxes, you will experience higher costs due to accidents, higher repair bills and lack of economic development. I believe the fairest tax is the fuel tax, as you pay in proportion to the amount you drive, but many other methods of increasing funding, including tolls, are being studied.
For the welfare of our commonwealth, we hope to see the General Assembly and the governor agree to a permanent source of funding to start working on solving the many needs we have in Virginia for more lanes of roadways, as well as more rail and mass transit facilities.
