I just got home when I started writing this piece. I left my office at 2:30. It’s 4:30. I travelled 40 miles. Half of that was on I-495 and the rest was on I-66. The I-66 portion took twice as long as the trip on the Beltway. This is what commuters around Northern Virginia deal with on a daily basis – multi-hour commutes, just to live in an actual house, in a safe area with good schools.
You don’t need to tell anybody around here that traffic is awful. Anybody who has spent more than ten seconds living here will tell you transportation is a critical issue. Some of us thought we were finally going to get some relief when the Governor announced a multi-modal solution for I-66, including express lanes, rapid transit, and more park-and-ride facilities.
Like most transportation experts and politicians, I expected that any I-66 project would follow the tried, tested and successful model that built the I-495 Express Lanes – a public-private partnership (P3). That expectation was solidified when, shortly after the announcement of the project in July 2014, Virginia Secretary of Transportation Aubrey Layne announced at a forum at NoVA VDOT headquarters that he didn’t believe this project would happen only using public dollars
Fast forward to today, where the Governor has apparently changed his mind and instead wants to use the design-build model, jettison the P3 concept and build the estimated $2.1 billion project solely using taxpayer dollars. At the most recent Commonwealth Transportation Board meeting Aubrey Layne presented funding options for the I-66 project. Rather than show the audience the math behind his numbers, he relied on one slide in his presentation to justify public financing over a P3. Apparently, VDOT has some studies that backup their abrupt policy change, but those haven’t been released to the public.
Math that taxpayers can’t see sounds like fuzzy math to me. Transparency is important, and there’s no reason why the Governor and Secretary Lane needed to keep these analyses secret. They certainly need to justify this 180 degree change from P3s to public financing, especially given our track record with P3s in Northern Virginia. If they’ve got studies that show public financing makes more sense, I want to see them. I think they can forgive me if I don’t take their word for it.
P3s have made possible a number of projects here that would not have been built without critical private investment, including the I-495 and I-95 express lanes. Thanks to the Public Private Transportation Act, passed during Governor Allen’s administration, Virginia can work directly with the private sector on roads, securing hundreds of millions in upfront capital investment in exchange for receiving toll revenue for a fixed period.
If you want to know why design-build is a bad idea, look no further than the U.S. Route 460 debacle. That project cost taxpayers $300 million without turning a shovelful of dirt. If we did design-build for I-66, you’d see an up-front cash investment from Richmond, with the balance of the project funded through public debt – transportation bonds. Every project we bond has an impact on Virginia’s debt capacity. Worse, the entire financial risk of the project is borne by the taxpayers. As we’ve seen with the HOT lanes on the Beltway, traffic estimates often miss the mark and that could require significant cash transfusions to ensure that projects remain viable. Private industry can weather that kind of timeline. The government can’t without impacting core functions elsewhere, and given the popularity of the last tax increase for transportation, the chances of another one – no matter how much it may be needed – are very slim.
A P3 doesn’t have the taxpayer risk – the private sector would have skin in the game, somewhere up to $1.1 billion, which would then be matched by the Commonwealth. That’s a billion dollars in transportation funding that can go to fix other issues (like Route 7 or Route 28 in NoVA, or the myriad projects around Richmond and Hampton Roads).
The private sector also – I’m sure this will shock you – does a better job in protecting property rights than VDOT. While current projections require eminent domain of thirty-six homes and businesses to handle widening on I-66, it’s likely that a P3 could significantly reduce that number. VDOT’s original proposed design for the Beltway HOT lanes demanded taking 300 homes and was estimated to cost a total of $3 billion. Through the P3 process, however, VDOT got an innovative design that only required eminent domain on eight parcels of private property, and cost $2 billion. As we often find, the private sector figured out a way to do it faster, cheaper and with less impact to property owners.
One of the reasons Terry McAuliffe won the support of the business community in Fairfax was because of his arguments in favor of modernizing Virginia’s economy and attracting private investment to the Commonwealth. It’s hard to understate the economic impact this project will have. Past P3 projects in Northern Virginia generated over $5 billion in economic activity and created more than 28,000 jobs. Dumping P3s to go it alone is turning his back on his campaign promises to Northern Virginia business and asking taxpayers to take on the entire burden of this project when we have private investors willing to partner with us. Design-build is the past. P3s are the hallmark of the modern Virginia economy.
It doesn’t make an ounce of sense for him to backtrack on his willingness to work with the private sector in a major area that can both save taxpayer dollars and promote private investment in Virginia. This isn’t crony capitalism – it’s common-sense capitalism. The Governor is turning up his nose at $1.1 billion in investment. It doesn’t make a lot of sense.
There are few good reasons why Virginia should abandon our tried, tested and successful P3 model for I-66. State leaders need to do what is in the best interests of the taxpayer and not rely on fuzzy math in reports nobody has seen to rationalize not developing I-66 as a public private partnership.
And while the Governor spends precious months figuring out things we all already know, I’ll probably still be sitting on I-66.
