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.