Chamber News

U. S. 58 Gets Consideration in Gov. New Transportation Plan

U. S. 58 could get consideration and be included in the new Transportation plan of Gov. Bob McDonnell. See today's Martinsville Bulletin, front page article by Paul Collins, Staff Writer

Source: Martinsville Bulletin, Dec. 12, 2010, Page 1 U.S. 58 to get state's scrutiny As road plan is developed for Gov. McDonnell Sunday, December 12, 2010 By PAUL COLLINS - Bulletin Staff Writer State officials will consider work on U.S. 58 as they devise road projects that would be funded if Gov. Bob McDonnell’s transportation plan is approved by the General Assembly. “The governor specifically asked us to look at the Route 58 corridor� when considering road projects, Virginia Secretary of Transportation Sean Connaughton said late Friday afternoon. “We will be developing a list of projects and will release it prior to the General Assembly meeting in January. We are going to be looking first at� projects that were removed from the six-year plan due to lack of funding, Connaughton said. “I know there were several projects in the Martinsville area that lost funding in the six-year plan,� he said, adding that more details were not immediately available. One proposal in McDonnell’s plan is to use toll credits from state-owned roads for Virginia’s mandatory 20 percent match for federal-aid projects. Connaughton said that would free up more than $1 billion for state projects. In areas where there are not as many federal-aid roads, “this will allow us to put money on projects that are critical, but previously we have not been able to build,� he added. Connaughton also noted that communities that can’t borrow or repay loans could apply for grants with the Virginia Transportation Infrastructure Bank, which would especially help rural areas. Area state legislators are divided over the governor’s plan that was unveiled Thursday. McDonnell proposes to spend $4 billion on road, transit and rail projects over the next three years. Del. Don Merricks, R-Pittsylvania County, said he had not had much time to analyze what McDonnell is proposing. But from what he has read so far, he said it appears to be “a creative way to get money into the system.� Del. Ward Armstrong, D-Collinsville and House minority leader, criticized the plan, saying the governor is proposing to borrow billions shortly after an election in which voters indicated they “are tired of spending money we don’t have.� Sen. Roscoe Reynolds, D-Ridgeway, said he had “not been privileged� to have been briefed on the plan and had not had time to look into it. “I would be very concerned about additional borrowing� unless there were assurances Virginia would not exceed its cap on borrowing, Reynolds said, noting that he would not want to jeopardize the state’s AAA bond rating. Del. Danny Marshall, R-Danville, could not be reached. According to a news release on the website of the governor’s office and The Associated Press, the plan calls for: • Accelerating the sales of bonds from 2007 transportation legislation, providing the ability to issue up to $1.8 million in bonds over three years (up to $600,000 per year). “For every $100 million spent on highway construction, it is estimated 3,000 jobs are created or supported,� the release stated. • Issuing at least $1.1 billion in what are called direct GARVEE bonds, to be paid for with future federal highway funds. McDonnell is proposing that the state use money collected on state toll rolls for its match. • Setting up a Virginia Transportation Infrastructure Bank to provide grants and low interest rate loans to localities, transportation and transit authorities, and partners in the private sector. Initially, $250 million in capital would come from unused Virginia Department of Transportation cash revealed in an audit, and $150 million would come from the budget surplus. “Additional deposits will come from other sources, including future budget surpluses,� the release stated. “Through grants, low-interest loans and loan guarantees, local governments can use the bank to get their projects that have (not been) funded or underfunded in the current six-year improvement plan,� the release stated. • Passing “a constitutional amendment to permanently protect the Commonwealth Transportation Fund from transfers to the general fund.� • Increasing the availability of revenue sharing with localities to help generate more local highway construction. The $1 million cap per project and $50 million program maximum would be eliminated. Merricks said the plan “makes good sense.� He said interest rates are historically low; construction prices are down; the state would not have to increase taxes, such as the gasoline tax; people would be put to work; and transportation projects would be built. Also, Merricks said, it appears that the state would remain within its historic 5 percent debt capacity (the ceiling on the ratio of tax-supported debt service to revenue). It appears the state’s AAA bond rating would not be endangered, said Merricks, adding, “I wouldn’t do anything to jeopardize the bond rating ... .� He called the plan “a win-win for everybody� and said he believes it will succeed in the General Assembly. The “timing is right� for the plan, and as a result, the commonwealth should “get more bang for the buck� on road projects, he said, adding that he hopes Southside would benefit from the proposal. Armstrong said he is most troubled by the “single largest chunk of debt� ($1.8 billion), which would have to be paid from the same state fund that covers such things as schools and law enforcement. Instead of developing a meaningful plan, the governor “is whipping out the state’s credit card,� Armstrong said. Armstrong said McDonnell’s proposal to privatize the state’s liquor stores lacked support in his own party, and he feels the governor’s proposal for offshore drilling won’t happen for at least seven or eight years because of the Gulf oil spill. “With no revenue stream anywhere else, he wants to borrow money,� Armstrong said. “It’s a tax increase for our children. They’re going to have to pay for this thing.� He said he thinks a lot of legislators have “very serious concerns� about the plan, and the road industry has criticized it, saying “that this isn’t sustainable revenue.� Armstrong also questioned whether surpluses will occur as McDonnell expects. “Who knows if there will be a surplus? We’re not out of the recession,� the delegate said. Reynolds said all he knew about the plan was what he read in the newspaper, and he had not had much time to digest that. However, the governor is “talking about borrowing a great deal of money. I don’t know how he anticipates paying the bonds,� Reynolds said. He said he would support efforts to complete U.S. 58 from Stuart to Hillsville and begin construction of Interstate 73.