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Fixing
Interstate 81
There’s
broad support for widening I-81, but if the state uses
tolls to fund the project, how will that affect the
trucking industry and businesses along the corridor?
Related
story:
- Crushing the competition
by
Robert Burke
Virginia
Business
October 2003
You
don’t need to warn Don Zimmerman about big trucks.
He faces them almost daily on the drive between his
home in Vinton and his job at a steel manufacturing
plant in Salem. As he wheels his Isuzu Rodeo along crowded
Interstate 81 near Roanoke, lines of tractor-trailers
roar past or creep up the hills of this mountainous
region. “I definitely see it first hand,”
says Zimmerman, a vice president at John Hancock Joist
Co., of the endless flow of trucks. “It’s
just amazing.”
Once
safely at his desk, though, Zimmerman turns around and
sends his nine-truck fleet out on the interstate. Hancock
makes steel girders and joists, and I-81 is its pipeline
to customers all over the country. “I know I’m
part of the problem,” he says. “I just don’t
know what the solution will be.”
The
problem, of course, is a lot bigger than Zimmerman’s
small fleet. I-81 is one of the busiest truck routes
in the country, running from Tennessee through New York
to the Canadian border. The 325 miles in Virginia carry
anywhere from 25,000 to about 50,000 vehicles a day
depending on the section of road, with the count topping
60,000 in some urbanized areas. And on this road, cars
and trucks are pushed together with ferocity. Designed
to handle 15 percent truck traffic, in some places trucks
account for more than a third of vehicles, far higher
than other interstates in Virginia. It’s also dangerous.
In a four-month period last year, there were 694 accidents
on I-81, 228 involving trucks, with 12 deaths and 352
injuries. There’s wide agreement today that I-81
badly needs to be improved, not only to save lives but
for the long-term economic health of a huge swath of
western Virginia.
But
what to do and how to pay for it? Those questions are
pitting region against region and industry against industry.
At the crux is the idea of using tolls to pay the multibillion
cost of widening the road. In September two private-sector
groups gave detailed proposals for widening I-81 to
VDOT and both depend on tolls. Truck-dependent companies
up and down the Shenandoah Valley loathe the idea of
tolls. On the flip side, though, are road-builders hurt
by cutbacks in the state’s transportation budget
— for them a toll-funded project of this size would
be a bonanza. And, for state transportation planners,
tolls might be the only way to get the work done. Virginia
hasn’t taken any comprehensive action on transportation
funding since raising the sales tax a half-cent in 1986.
Today its 17.5-cent-a-gallon motor fuels tax rate is
41st in the nation. “If we want to realistically
consider improvements more in the near term rather than
a generation away on Interstate 81,” says VDOT
Commissioner Philip Shucet, “we’re going to
have to look at some use of tolls.”
The
two toll-based proposals come via the state’s 1995
Public-Private Transportation Act. Under the law, companies
can bid on a project and make a profit if they finish
on time and on budget. The more complex and costly proposal
comes from a consortium of companies called Star Solutions.
It proposes adding two new lanes in each direction just
for trucks. Trucks and cars would be separated by rumble
strips in narrower corridors and grassy medians elsewhere,
especially north of Harrisonburg. The project would
take about 12 years and cost $6.3 billion in 2003 dollars,
which includes $1.6 billion in federal dollars and $98
million from VDOT. Mandatory separation of cars and
trucks solves the safety issue, says James W. Atwell,
a former VDOT assistant commissioner who is part of
the Star team. “When you’ve got two lanes
of traffic and those heavy trucks... nobody’s going
to pass,” he says. “But when you separate
the cars and trucks it provides for more free movement
and free flow of traffic.”
The
Star plan would levy tolls only on trucks, which would
pay at least $68 for a trip through the state. In addition,
the Star plan would build eight truck-only flyovers
and make other interchange improvements.
The
second bid is from Fluor Virginia, a group led by construction
and engineering giant Fluor Corp. It has a lower estimated
cost — $5.9 billion — and would take eight
years to complete. It calls for tolls on both cars and
trucks, and adds a third lane in each direction for
cars only, along with 10 truck-climbing lanes on steep
grades. Cars driving the entire stretch would pay $16
and heavy trucks would pay $55. Fluor Virginia’s
plan doesn’t require federal or state funds. Both
proposals call for improving rail lines of Norfolk Southern,
which could take about 500,000 trucks a year off the
interstate.
Though
VDOT has both proposals in hand, the process of deciding
exactly what to do will likely go on for several more
years. It’s taken nearly two years just to get
this far. Star first submitted an unsolicited proposal
to VDOT in January 2002. Fluor gave its original concept
to VDOT in January of this year, and both submitted
detailed and modified proposals last month. VDOT is
just beginning a federally required environmental impact
study.
The
cost of each plan changed substantially from earlier
estimates. Fluor previously said its plan would cost
about $1.8 billion, but that figure climbed when VDOT
increased the work it wanted Fluor to include, such
as the rebuilding of interchanges. The Star group cut
$1.9 billion from its plan by reducing the number of
truck-only flyovers and new interchanges, plus using
rumble strips and grass medians instead of concrete
barriers to separate cars and trucks. But Star’s
$6.3 billion estimate is in 2003 dollars. The actual
cost over the life of the project is higher, but Star
didn’t make that figure public.
The
550-member Virginia Trucking Association favors the
Fluor design but says the projected tolls of both plans
are too high. “We think it will have an impact
not only on trucking companies based out there but on
the companies that depend on trucks,” says Dale
Bennett, the group’s executive vice president.
The group also chided Star Solutions, saying its decision
to not reveal full details of its financial plan “serves
no purpose other than to mislead the public and policymakers
regarding the true costs.”
There
is regional resentment as well. “Tolls on trucks
will ... make local industry less competitive, force
some smaller local firms out of business and ultimately
cause our area major losses in revenue and employment,”
Augusta County Chamber of Commerce Director Ben Carter
said at a VDOT hearing last fall. The American Trucking
Association told the General Assembly last year that
tolls on I-81 would encourage truckers to take other
roads. U.S. 29, for example, could see up to a 273 percent
increase in trucks, claimed the association’s vice
president, Richard Holcomb. Bennett says many valley
businesses and residents “feel like it’s unfair
to them. All these years they paid a pretty significant
amount of tax that was used to pay for improvements
in other parts of the state. And now there seems to
be a shift in policy that says, ‘Well, western
Virginia, you’re going to have to fix it yourself
and bear the cost alone.’”
Large
truck-dependent companies could take a major financial
hit if tolls are adopted. The valley has many such businesses,
such as the Coors Brewing plant in Elkton, which employs
about 460 people, and MeadWestvaco Corp., a paper and
chemical maker in Covington that employs 3,000 in Virginia.
Both put thousands of trucks on the interstate every
year and have warned state officials that tolls would
give an edge to their competition. Zimmerman says his
business is especially at risk. “We should all
know by now the delicate situation the steel industry
is in,” he says. “We can’t take another
rate hike of any kind.”
Shucet
says he sympathizes with the region’s complaint
that they’re getting a bad deal. “But we have
to deal with reality,” he says. “Something
needs to be done.” He said that whatever plan evolves
won’t be a death blow to trucking companies—though
he doesn’t say if that means he’s skeptical
of their dire warnings or expects some other plan to
emerge. “We will not have served anyone… if
we adopt an alternative that puts the trucking industry
out of business in Virginia. We won’t do that.”
One
thing that could tip the balance toward the Star proposal
is the chance for Virginia to get federal money for
a pilot study on the mandatory separation of trucks
and cars, which is only in the Star plan. Rep. Don Young,
R-Alaska, has backed such a study and shown a preference
for I-81. In May, Young told the Capitol Hill newspaper
Roll Call that a truck-only project in Virginia would
be “close enough to where the rest of my Congressional
friends can see it. And once they see it they will be
mandated across this country.”
That
funding would come through the reauthorization of the
Transportation Equity Act for the 21st Century (TEA-21),
which was due to expire last month. Young reportedly
has earmarked $800 million for a truck-only project.
Atwell of the Star team says Young’s pilot program
gives Virginia “an opportunity to be on the cutting
edge. That may be the wave of the future for the movement
of truck freight.” Those federal dollars, though,
aren’t guaranteed, something Fluor representatives
like to point out. “What happens if another Congress
doesn’t want to reauthorize that money?” asks
Bud Oakey, a spokesman for the Fluor group. “It
would be nice to get that money, but I don’t see
how you can count on it.”
The
state’s road-building companies think it would
be nice to get the I-81 project going no matter how
it’s paid for. Last year a $2.8 billion cut from
VDOT’s six-year construction plan meant the loss
of 166 projects statewide. “There’s no doubt
about it that our industry is hurting,” says Richard
D. Daugherity III, executive vice president of the Virginia
Road and Transportation Builders Association. “I
think that we are running into such a financial bind
that one way or another you’re going to have to
turn to tolls.”
And
it doesn’t matter which consortium gets chosen,
or if neither wins out. If Shucet succeeds in pushing
through a major widening of I-81, then many of the state’s
road-building companies will get the work anyway because
it’s cheaper to use local suppliers of raw materials
and labor. “There are enough companies in Virginia
who are interested in this job,” says Jack Lanford,
chairman of Roanoke-based Adams Construction, a Star
team member and the state’s largest asphalt producer.
“I don’t think we’re going to have any
trouble at all lining up people to do it.”
Virginia’s
problem is lining up the money. According to VDOT the
buying power of the state’s transportation taxes
has dropped 40 percent since 1986. At the same time,
construction costs have risen 48 percent and the number
of vehicle miles traveled has climbed 79 percent. The
state today is short on revenues and so saddled with
debt that its six-year transportation plan calls for
borrowing $407 million from road construction to pay
for road maintenance. And debt payments, which used
to consume just 1 percent of transportation revenues
in 1986, now use 13 percent.
Virginia’s
approach to paying for road construction has changed
a lot, says Ray Pethtel, a leader of the Fluor team
who served as interim VDOT commissioner before Shucet’s
arrival. For decades the state took a pay-as-you go
approach. Then in the 1980s and 1990s it began borrowing
but always had new revenue to cover the debt payments,
says Pethtel. Under former governor Jim Gilmore, it
began depending more on debt backed by future federal
payments. “For a particular project that’s
okay,” Pethtel says. “But when you’re
trying to fund a whole program ... you’ve got to
have new revenue.”
There
is little chance that the current legislature would
agree to any tax increase for transportation spending.
In the most recent General Assembly session, proposals
to raise money for road-building failed. Two bills sponsored
by Sen. Kevin Miller, R-Harrisonburg, to add a 4.5 percent
sales tax to the price of gasoline and to index the
motor fuels tax to inflation both died in the Senate
Finance Committee. A third bill, sponsored by Del. John
A. Rollison III, R-Woodbridge, to dedicate a third of
the annual insurance license tax to leverage bonds for
road construction passed the House but died in the finance
committee as well.
Rollison
is a case study on the hazards of proposing transportation
tax increases. He helped get two regional transportation
referendums on the ballot last fall only to see them
trounced by voters. Then in June, Rollison — an
18-year veteran and chairman of the House Transportation
Committee — was beaten in a GOP primary by a 27-year-old
conservative anti-tax challenger. That helped silence
any talk of a fuel tax increase. “If I was looking
at a gas tax increase, I wouldn’t hold out much
hope for that this year,” says Daugherity, a self-described
conservative Republican. “I don’t think it’ll
ever get through the conservative House.”
Instead,
tolls are emerging as a potential funding source for
projects such as a part of the long-planned third crossing
in Hampton Roads and a 14-mile section of high-occupancy,
car-only toll lanes along the Capital Beltway in Northern
Virginia. VDOT received an unsolicited PPTA proposal
from Fluor Daniel for the latter project this summer.
The I-81 project might break ground for more toll-funded
roads, but its actual groundbreaking is still a long
way off. Local governments have until early November
to comment on the Star and Fluor plans, then there is
a lengthy environmental review, negotiations with the
Federal Highway Administration, public comment and likely
challenges over the project’s environmental impact.
Plus, pro-rail groups are pushing for improving rail
infrastructure rather than laying new asphalt through
some of Virginia’s most scenic areas. There’s
no telling what might emerge. “As we work through
that process and as we work through the environmental
process, new options may take shape,” Shucet says.
Zimmerman,
meanwhile, has learned to cope with his commute. The
hard part is getting up to speed on the entrance ramps,
he says. “It was no problem 25 years ago. You could
almost get on with your eyes closed due to the low volume.
But now you’d better be ready to go,” he says.
“Once you’re on, it’s just a matter of
keeping up with everyone else.” That’s true
for anyone with a stake in what happens to I-81: Keep
up, or get run over.
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to Virginia Business - October 2003
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