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Senate committee hears Justice’s $2.8B bond proposal for road improvements


Charleston Gazette-Mail

CHARLESTON, W.Va. — Department of Transportation officials on Monday explained to the Senate Finance Committee Gov. Jim Justice’s proposal to sell $2.8 billion of infrastructure bonds for highways construction.

Justice’s plan would include continuing and increasing tolls on the West Virginia Turnpike for 20 years as well as increasing the gas tax and the DMV vehicle registration fees.

The break down of Justice’s proposal shows:

$1.8 billion of general obligation bonds, to be paid off with increases in the state gas tax and on DMV vehicle registration fees. Those bonds would require approval of a constitutional amendment by state voters.

$500 million of Parkways bonds, to be funded by continuing and increasing tolls on the West Virginia Turnpike for 20 years. That would require legislation to continue the Parkways Authority, which is set to terminate under current law when the current Turnpike bonds are paid off in May 2019.

 $500 million of GARVEE bonds, which are bonds sold against future federal highways funding payments. That would require legislation raising the current cap on GARVEE bonds from $200 million to $500 million.

Justice has proposed doubling tolls on the West Virginia Turnpike to help fund the $500 million Parkways bond issue, but said the state would offer a special E-ZPass transponder for passenger vehicles that would provide unlimited use of the Turnpike for $8 a year.

Parkways Authority General Manager Greg Barr conceded Monday that the total costs of lost toll revenue from those passes aren’t known at the moment.

“For us to try to estimate is very difficult,” he told the committee.

Currently, Parkways offers unlimited use flat fee passes for passenger vehicles that cost between $95 a year for one toll plaza to $285 a year for all three toll plazas.

Barr said there are about 8,000 unlimited flat fee transponders in service, including about 500 issued to out-of-state residents, predominately in border counties.

“If there’s a $8 pass available, they surely wouldn’t buy the $95 or $285 package,” Barr said.

Likewise, state residents who currently pay $5 a year for E-ZPass transponders that provide a 35 percent discount on Turnpike tolls ($1.30 per toll plaza instead of $2) would probably be likely to switch to the $8-a-year E-ZPass, particularly if tolls are doubled, Barr said.

He noted that in that case, the $8 pass would more than pay for itself on a single trip to Myrtle Beach and back, with total Turnpike tolls of $24.

Ultimately, the Parkways Authority will have to have a precise projection on how many $8 passes will be sold before the new Turnpike bonds could go to market, Barr said.

“It may very well take a traffic study to nail it down,” he said.

In initially proposing Parkways bonds as part of his highways construction package, Justice had proposed that all state drivers would get a special Turnpike sticker for passenger cars when they renew their vehicle license plates. The sticker would permit unlimited free use of the Turnpike, and any other roads the state may toll in the future, Justice said.

Barr said that plan had drawbacks, since it would have required buying devices for the toll plazas that could read the stickers and track total transactions, and also would have raised interstate commerce issues, since the stickers would not be available to non-resident drivers.

Also Monday, Barr said that if passenger vehicle tolls are doubled under Justice’s bond plan, tolls for commercial vehicles would increase proportionately.

That would increase the toll for 18-wheel commercial trucks from $6.75 to $13.50, he said. Tolls for trucks with in-state EZ-Pass transponders would increase from $5.40 to $10.80.

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