Governor’s Blue Ribbon Commission on Highways Story Archives

Highways Commission to Release Final Report 20 Months Late

More than a year and a half after its initially announced release date, members of the Governor’s Blue Ribbon Commission on Highways are set to release their final report Wednesday.

The commission began its work in October 2012, studying the state’s highway system, polling West Virginians on their priorities and compiling a list of new revenue sources as well as efficiencies.

In September 2013, the group held their final meeting to discuss recommendations, which include increasing the motor vehicle sales tax and DMV fees as well as continuing tolls on the West Virginia Turnpike to leverage more than $1 billion for new construction.

“To be very clear about it, we all know that our highway systems are deteriorating. That’s true around the country,” Sen. Mike Hall said of the pending release. Hall is a non-voting member of the commission

“We’re also aware that nobody wants to hear they are going to pay some new revenue or tax or so forth, but somewhere between the needs we have and the revenue we need, there is an answer and the Blue Ribbon Commission it the first shot at that.”

Hall expects the Joint Committee on Finance to discuss the report during interim meetings before forming any opinions on possible legislation for the 2016 session.

In a written statement, Tomblin’s Communications Director Chris Stadleman said:

“After receiving the report, Gov. Tomblin will work with legislators to review the commission’s recommendations and evaluate what measures represent the most appropriate and effective way to improve our highways without placing undue burdens on residents.”

The report is scheduled to be released at a 1:30 meeting Wednesday.

Highways Report Expected One Year After Intial Release Date

The chairman of the Governor’s Blue Ribbon Commission on Highways says the group will release its final report in late September almost a year after its initially set release date.

Jason Pizatella tells the Charleston Gazette the report is undergoing proofreading and editing.

Gov. Tomblin created the Blue Ribbon Commission nearly two years ago with the goal of issuing recommendations on how to better fund the state’s roadways. Commission members approved their recommendations in September of 2013, but the final report was delayed.

Pizatella says the delay was because of multiple reasons, but conceded that one was because lawmakers didn’t want to vote on tax increasing during an election year. But legislative committees have asked for the final report to be available for legislative interim meetings next month.

He says the final report doesn’t make any changes from the recommendations finalized last year.

Commissioners said the state needs to nearly double its road fund budget, from one to at least 2 billion dollars a year to adequately build and maintain the state highway system.

Can the DOH take over the state turnpike?

The governor, the legislature, even a special commission on highways are all looking for ways to fund state roads. A select committee on Infrastructure is trying to find ways to save money and increase efficiencies by combining the Division of Highways and the governing authority of the state’s Turnpike, but simply combining the two would create serious legal implications for the state.

Senate Concurrent Resolution 55 requested a study to consolidate the operations and maintenance responsibilities of the state Parkways Authority and the Division of Highways in the hopes of saving money by finding efficiencies.

The Parkways Authority is currently a separate entity responsible only for the 88 miles of turnpike through southern West Virginia. In 2019 when the bond debt on the road is paid off, state law dictates the Commissioner of Highways will decide if the condition of the roadway is good enough for the state to assume control free of tolls.

But state lawmakers want to know, could we save money if we just did that now? The answer, in short, is no. But of course it’s not that simple.

“That would be a problem,” General Manager of the Parkways Authority Greg Barr told legislators Tuesday. “That would violate the impairment of contract clause in the Constitution.”

Barr said should the state choose to consolidate them under the DOH before 2019, it would violate the bond contract.

“When the contract was entered into to sell the bonds by the Parkways Authority, there was representation to the bond holders that the Parkways Authority would be an independent agency that would oversee the maintenance and upkeep of [the Turnpike] and take care of the responsibilities for the bond holders.”

Senator Bill Cole of Mercer County suggested integrating the agency into the DOH, but keeping the Parkways Authority name and governing board to align with the contract. The debt left on the bond then becomes the state’s.

“I would think that if I held that bond, the state of West Virginia might be a little bit more substantive than an authority within the state of West Virginia,” Cole said. “Is that really a technicality that we’re talking about that isn’t a big deal, paying a couple hundred dollars to pay a name and get some approval?”

“In this case it would be a big deal,” responded Brian Helmick, bond counsel for the authority.

Helmick said it is unconstitutional for the state to incur any debt.

“There’s a Constitutional provision that doesn’t allow the state to incur debt without a vote of the people, and when we say a vote of the people, we actually ask the people in west Virginia to vote on an amendment to the Constitution allowing for certain debt to be incurred,” he said. “That has been done a few times over the years, primarily for DOH highway projects.”

So, just pay it off early. Pay off the debt and assume control of the roadway. That’s what Delegate Nancy Guthrie of Kanawha County asked of Helmick. How much would it take to pay it off now?

Helmick said there is about $55 million in principle left on the bond, but you can’t just pay it off when you have funds. The state would incur prepayment penalties to the tune of $7.5 million.

It appears the Parkways Authority is contractually obligated to not just remain intact, but remain in control of the maintenance and collection of tolls on the Turnpike.

But of course, in 2019, all of that could change. The state could decide to re-bond the road, keep the tolls and use the money to fund other road projects, or at least a dozen other scenarios all being considered by the governor, the legislature and the Blue Ribbon Commission on Highways.

Commission to recommend raising tolls, fees in lieu of raising taxes for roads

The Governor’s Blue Ribbon Commission on Highways has spent the past year meeting with consultants, engineers and lobbyists as well as touring the state to hear from the public, in the hopes of finding new ways to fund state roads. Commissioners will send their recommendations to Governor Tomblin by the end of the month, claiming to have found more than $1 billion in new income and savings.

Through recommendations for new revenue, efficiencies and innovations, the commission’s final report is expected to come up with $1.1 billion of the $1.3 billion West Virginia would need to not only maintain, but also expand the state road system.

“The recommendations that we made don’t raise taxes at all,” said Jason Pizatella, Governor Tomblin’s deputy chief of staff, who serves as the commission’s chair.

But that doesn’t mean consumers won’t see any increases in what they’re paying now.

“Well, when I say taxes, I’m referring to the motor fuel excise tax. The gas tax,” Pizatella said. “The tax that everyone that came out to the public meetings complained about and said that they did not want to see increased.”

So instead, the commission is recommending an increase in DMV and motor vehicle licensing fees that will be adjusted every other year. The increases are expected to amount to $77 million in additional revenue for the road fund.

Next, commissioners recommend an annual registration fee on alternative fuel vehicles- namely vehicles that aren’t paying the gasoline tax when they fill up at the pump.

The proposed fee is $200 ever year for alternatively fueled vehicles and $100 for vehicles that use a combination of alternative fuels and gasoline or natural gas. The recommendation is expected to bring in a total of $1 million a year in revenue.

Another revenue sources includes reallocating money spent on car parts and services from the general revenue fund, where it goes now, to the road fund.

“Its $25 million estimated that the road fund doesn’t currently get,” Pizatella said, “and it’s the commission’s recommendation that those particular items like parts and batteries and services and tires that we use for our vehicles should go to the road fund.”

Moving those funds from the general revenue to the roads fund, however, would create a $25 million hole in state funding during an already pressing economic time. Of course, commissioners aren’t responsible for making a recommendation on how to fill that gap.

The commission hasn’t just focused on revenue, though. They’ve also looked for efficiencies within the state Division of Highways to save money.

Department of Transportation Secretary Paul Mattox, who oversees the DOH, brought forward five potential areas of future cost savings, including converting the fleet to natural gas vehicles and reducing middle management positions through retirements, but he said most of the cost savings in the department have already been realized. That resulted in millions moved from various parts of the department into the road fund.

“Being able to reallocate $180 million into our construction program within a budget that has pretty much been flat over the past decade has been quite an accomplishment,” Mattox told his fellow commissioners. “I don’t know if there’s any really large savings left within the agency that we could put towards the construction program.”

Pizatella said there are still some cost saving changes the department can make, they will just result in less of a revenue bump for the road fund than in the past.

Recommendations also include future studies on topics like using severance taxes from a possible Future Fund to pay for infrastructure, replacing the gasoline tax with a broad-based sales tax, and a possible federal sales tax on Internet purchases that will result in state money.

“One thing is not going to solve it, but I think it’s a combination of all the things that we heard hear (during the meeting), both innovations and efficiencies that will allow us to chart a path towards trying to make a dent in our needs for highway infrastructure,” Pizatella said.

“We cannot as West Virginians to pay more to solve a problem that did not occur overnight so it will not be solved overnight. So, it’s a step process. There’s no silver bullet, but we think it’s something that the legislature and the governor will be able to consider.”

At their next meeting, the commission will discuss an additional source of revenue, a phased increase of tolls on the state turnpike. The fee, however, would be frozen for five years for instate drivers using an E-Z Pass to pay their tolls.

That discussion is set for September 17th where the commission also plans to finalize their remaining recommendations. Pizatella expects to have the commission’s report to the governor by the end of the month.