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The Big Gamble: State officials say road bond vital to West Virginia’s economic future

By RUSTY MARKS

The State Journal

CHARLESTON, W.Va. — State Transportation Secretary Tom Smith has a hand-lettered note taped to the valet at the edge of his large wooden desk.

State Transportation Secretary Tom Smith says the general obligation road bond will make up to 60 percent of Jim Justice’s roughly $3 billion Roads to Prosperity highway construction and maintenance program.
(State Journal photo by Rusty Marks)

“Once more into the fray,” the neatly penned slip of paper reads, “Into the last good fight I’ll ever know…

“Live and die on this day… Live and die on this day….”

The quotation, taken from a film starring Liam Neeson and loosely adapted from Shakespeare’s “Henry V,” does not refer specifically to the task Smith has trying to sell Gov. Jim Justice’s $1.6 billion road bond call, set for a public vote on Oct. 7.

But the quote accurately reflects the resolve Smith took when he agreed to accept the job as the governor’s most senior highways official.

Smith vowed to do his best to bring West Virginia’s crumbling highway system into the 21st century and make up for years of neglect brought on by tight budgets.

Smith said the road bonds that voters will be asked to approve make up 60 percent of the governor’s “Roads to Prosperity” highway construction and maintenance program, an approximately $3 billion program Justice believes will help jump-start West Virginia’s economy, create hundreds of millions of dollars in spinoff revenue and put tens of thousands of West Virginians to work almost immediately.

“I needed something to create jobs instantly,” Justice said in explaining the roads program.

“This is our ticket,” Justice said in a telephone interview. “This is the single biggest vote in the history of our state.”

The road bond vote is part of a larger funding scheme for building and repairing roads and bridges all over the Mountain State, providing one of four “buckets” of money for maintenance and construction, Justice said.

State highways officials want to sell $1.6 billion in general obligation bonds to create a large pool of money that will allow them to tackle big- ticket construction projects over the next four years. Because the state wants to sell general obligation bonds, the state constitution requires the proposal go to a statewide vote for voter approval.

Money to pay for the bonds will come from raising the tax paid on wholesale gasoline, increasing fees at the Division of Motor Vehicles and raising tolls on the West Virginia Turnpike. The West Virginia Legislature voted to do all three during the 2017 session that ended in June.

“The funding is already in place,” Justice said.

Smith said the road bond sale will allow highways officials to tackle major construction projects it would take years or decades to complete if they had to rely on traditional funding sources. Major projects to be paid for under the general obligation bond sale include about $170 million to repair 25 bridges in the Wheeling area and another $170 million to replace the Interstate 64 bridge in Nitro.

“The bond market is ideally situated right now to borrow,” Smith said.

He said highways officials can pay for road construction now with the bond issue or pay more years down the road.

The majority of state lawmakers, and many business and civic organizations around the state — including the West Virginia Chamber of Commerce and West Virginia Business & Industry Council— have already endorsed the road bond and are urging state residents to vote in favor of the sales.

“This is so simple,” said state Senate President Mitch Carmichael, R-Jackson. “You’re already paying for the roads (through the fees and taxes already approved by the Legislature). Why not have them?”

Since the funding mechanism to pay off the bonds has already been approved by lawmakers, Carmichael likened voting the road bond down to taking out a mortgage on a house, taking on the mortgage payments, then deciding not to buy the house.

“I fully support this road bond proposal, and encourage you to vote for it too,” said Delegate Eric Nelson, R-Kanawha, chairman of the House Finance Committee. “If passed, it will mean greater safety for motorists, significant reduction in potholes (thus less money spent on vehicle repairs), and investment in economic and job growth for many years to come.”

But there is opposition to the road bond sale. In August, the West Virginia Republican Executive Committee issued a resolution opposing passage of the road bond amendment. State Executive Committee Chairman Conrad Lucas said some members were concerned about the tax and fee increases that will pay for the bond and the precedent it sets for future tax increases.

Delegate Marty Gearheart, R-Mercer, is chairman of the House committee on transportation and roads. Gearheart fears Justice “bullied” the Legislature into raising taxes and fees to pay for the bond to try to force through his roads program.

“I believe we got the cart before the horse,” Gearheart said. He believes lawmakers should have first asked if voters were willing to pay more taxes and higher fees to build and repair roads before asking them to approve a road bond sale.

Gearheart said lawmakers agreed to increase the amount of money they can raise through sales of other bonds, and thinks existing funding sources can cover the state’s highway construction needs.

But what happens if the road bond amendment is voted down? Smith said road construction in the state could be delayed by years.

“I think it’s fair to say decades,” Smith said. “You just have to suddenly reorder all your projects.”

If the bond election fails, Smith said big-ticket projects will still get done, but slowly and as money can be found. Big projects will have to be given priority, pushing other projects further down the list, and some likely off the list altogether.

Justice takes a more grim view.

“I’d say Plan B if this doesn’t pass is asking the last person to leave the state to turn off the lights,” the governor said. “It would be catastrophic to say the least.”

Justice said the state budget was balanced based on the assumption that the roads program would go through, bringing jobs, taxes and growth with it. “If you pull that back out, and we don’t have this growth boom from the roads plan, what will happen?” he asked.

“You’ll have to slash hundreds of millions of dollars more out of being able to help our people,” Justice said.

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