The Commonwealth Transportation Board (CTB) is the government entity that guides policies for Virginia's transportation system and allocates funding for specific projects in the nine transportation-planning districts throughout the Commonwealth. Virginia annually updates its Six-Year Improvement Program (SYIP) and the most recent plan reflects statewide transportation activity of nearly $11 billion for 2008-2013. When considering the allocation of transportation funds, the CTB's first obligation is to highway maintenance. For the 2008-2013 plan, the majority of highway funding is already committed to maintenance or advancing existing projects including $187.6 million for maintenance and $410.2 million in highway construction in Northern Virginia, leaving limited resources for new transportation projects not already included in the SYIP.
Virginia derives its transportation highway funds from a combination of state, federal, and local revenues. The state primarily receives revenues from the following sources:
• Motor fuel tax (17.5 cents per gallon)
• Vehicle sales tax (three percent)
• A portion of the vehicle license fees ($39.50)
• General sales and use taxes (0.5 percent)
• Federal funds (18.4 cents motor fuel tax and other sources)9
Virginia's primary transportation revenue source, the motor fuel tax, is not indexed to inflation, resulting in a reduced purchasing power of the revenues collected from this tax. The 17.5-cent tax per gallon has not changed since 1986 and currently ranks as the 41st lowest in the country. Despite past legislative attempts, there is no evidence of political will by the General Assembly to increase the gas tax. In contrast, Maryland's motor fuel tax rate is 23.5 cents and the national average is 18.3 cents.10
VDOT deposits these taxes and fees into two funds: the Highway Maintenance and Operating Fund (HMOF) and the Transportation Trust Fund (TTF). Virginia dedicates HMOF revenues for the operation and maintenance of the roads. TTF revenues finance the construction of new transportation infrastructure and are allocated according to the following formula: highways (78.7 percent), mass transit (14.7 percent), ports (4.2 percent), and airports (2.4 percent). As directed by Section 33.1-23.1 of the Virginia Code, the state must allocate these funds in the following order of priorities: 1) maintenance, 2) payments to localities, 3) administration and operations, and 4) highway construction. During periods of economic recession, the General Assembly has used TTF funds for other state obligations, depleting the revenues available for new construction. The 2005-2006 VDOT budget was $3.8 billion and the allocation break down was 37 percent for roadway maintenance, 34 percent debt service and administration, and 29 percent for new construction of projects already listed in the SYIP priority list.11
Due to the high costs of construction and maintenance, the state quickly expends funds, especially considering that each highway mile costs approximately $1 million to construct.12 Escalating costs often result in project backlogs or removal of projects altogether as VDOT prioritizes the use of its limited funds. Even with new funding made available in the 2007 transportation bill, Virginia (as with many other states) does not have sufficient funds to address all of its transportation infrastructure needs.
Historically, the HMOF has been solvent enough to address infrastructure maintenance and finance some construction. However, since the early 1990s the state has been unable to keep pace with maintenance costs (increasing $50 million each year) due in part to a decrease in the purchasing power of transportation revenues resulting from inflation.13 Simultaneously, the number of licensed drivers has increased 34 percent and commuters have traveled 79 percent more vehicle miles. Furthermore, the number of registered vehicles has grown 53 percent while new lane miles have only increased seven percent.14 A 2004 review of capacity requirements identified a $108 billion gap between funding and transportation needs over the next 20 years.
Looking to the future, VDOT has forecasted a one percent annual growth in gasoline tax receipts and owing in part to unpredictable congressional activity excluded any increases in revenue from the federal highway trust fund beyond 2009. 15 TRIP, a transportation research group, predicts that by 2014, state highway funds will be insufficient to match federal highway funds, reducing the overall amount of available funds and requiring Virginia to use all state construction funds for maintenance. By 2019, the state will have to use federal highway funds for maintenance as well, further decreasing the funds available for construction purposes.16