The Hampton Roads Bridge-Tunnel: a Fiscally Conservative Investment

If the ferry had remained the only way to get across Hampton Roads, then the growth of Sussex and Suffolk might have been stimulated substantially by the James River Bridge. However, the Great Depression slowed growth almost everywhere except in Northern Virginia. The population and economic growth of southeastern Virginia was facilitated by transportation improvements, starting with the Hampton Roads Bridge-Tunnel in 1957.

In that first year, daily traffic between Hampton and Norfolk doubled from 2,500 cars per day to 5,000 cars per day. In 2001, traffic increased to record highs according to the July 9, 2001 news release from the Virginia Department of Transportation. In the 365 days in 2000, there were 14,513 incidents requiring cars to stop on the Hampton Roads Bridge-Tunnel. (You thought traffic around the GMU campuses was bad? If you are in a hurry to get to Norfolk or Virginia Beach, you can see the current status of traffic congestion on a "live" Web site now.)

The Hampton Roads Bridge-Tunnel was expensive, and the people who used the bridge-tunnel paid for it over 20 years. The facility was financed by borrowed money. The general taxpayer did not finance it through income taxes or sales taxes, and local landowners did not finance it through property taxes. Instead, the General Assembly authorized a special body to sell revenue bonds and borrow money to finance the Hampton Roads Bridge-Tunnel.

The legislature did not guarantee repayment of the bonds with the full faith and credit of the Commonwealth of Virginia. They were not "general obligation" bonds; they were "revenue" bonds to be repaid with the income from tolls. The investors who purchased the bonds gambled that they would get their principal and interest payments on time. They were willing to pay cash for a promise - a bond - to be reimbursed by the tolls paid by drivers of cars and trucks, every time they crossed the bridge-tunnel.

Part of the financial projection was estimating that population - and traffic - would increase as a result of the transportation improvements. Virginia officials agreed, but Virginia built its road system from the 1920's to the present largely through a pay-as-you-go financing. After the uneconomic investment in "internal improvements" before the Civil War, Virginia politicians have been nervous about committing the state to repaying debts for transportation improvements. Bond issues allow politicians to provide services quickly while imposing costs on future taxpayers, but Virginia has developed a strong reputation as a financially conservative state. The state's voters have not supported politicians who might threaten to mortgage the future to pay for the present.

After the Civil War, there was a brief period when "Readjusters" controlled the state. They proposed to readjust, or modify terms for repaying the state's pre-war debt for roads, canals, and railroads. That would have freed up resources for social investments, especially schools and support for the newly-freed slaves. However, Democrats with a low-tax/low-services philosophy controlled the state's politics until 1969, when the first Republican governor was elected.

Douglas Wilder, as the state's first black governor, was anticipated by some to be an economic as well as social liberal. He entered office at the start of the 1989-91 recession, when the state's budget was underfunded by over $1 billion. Wilder chose to cut state services and raise tuition to balance the state budget, rather than raise taxes. He distinguished between "niceties" and "necessities," and maintained Virginia's AAA bond rating. That high rating indicates the state is a safe bet to repay its debts, and enable Virginia to sell bonds at low interest rates compared to governments whose credit history is not as spotless as Virginia's record of repaying its debts on schedule.

(Whether Democrat or Republican, the candidate for Virginia governor who could be accused most clearly of having a "tax-and-spend" philosophy was Henry Howell. In the 1973 race ran for governor, he campaigned on a proposal to "let the big boys pay" for new services, discussing how taxes on rich corporations could finance improvements in education, health care, etc. That election re-aligned Virginia politics. Until 1973, the Democrats were known primarily as social conservatives. They opposed desegregation and focused on a low-tax, pay-as-you-go approach to state services, including road construction. During national elections, Harry Byrd maintained a "golden silence" rather than endorse the more-liberal Democratic Party candidates for President. In 1973, Virginia conservatives deserted the state's Democratic Party and joining the Republican Party, so the philosophies of the state Democratic and Republican parties were finally consistent with the philosophies of their national equivalents.)

The Hampton Roads Bridge-Tunnel bonds were repaid from toll revenues collected from the heavy traffic crossing the river. A second parallel bridge-tunnel was built in 1976. After those bonds were repaifd, the tolls were dropped. Traffic through the bridge-tunnel is often congested, but it is uninterrupted by toll booths between the Peninsula and the southern part of Hampton Roads.

Easy physical access across the water led to the development of a sense of community, and helped to unite the area north and south of Hampton Roads into one "region." In the process, Virginia Beach tourism boomed as vacationers discovered the faster access to the wide sandy beach on the Atlantic Ocean - and recreational demand at Buckroe Beach declined. (Use the Geographic Names Information System to find the location of Buckroe Beach. Where is it in relation to the James River? Fort Monroe? Is it closer to Richmond and Northern Virginia than Virginia Beach?)

After completion of the Hampton Roads Bridge-Tunnel in 1957, Newport News lost business. Travelers no longer went through downtown Newport News to catch the ferry to Norfolk. Today the Monitor-Merrimac Bridge-Tunnel connects the downtown of Newport News to the south shore of the James River again, but the interstate highway speeds vehicles through the city. Newport News gets tailpipe emissions, but not much economic development from travelers using the Monitor-Merrimac Bridge-Tunnel. The Hampton Roads Crossing Study is now exploring the feasibility of a third crossing, to relieve the congestion on the first Hampton Roads Bridge-Tunnel. As noted in the Draft Environmental Impact Statement:

"Hampton Roads" is the name of the water body and harbor located between the mouth of the James River (to the west) and the Chesapeake Bay (to the east). However, the term "Hampton Roads" has been adopted locally, and in this document, to also refer to the metropolitan region that surrounds the Hampton Roads Harbor in southeastern Virginia (Figure S-1). The study area includes the cities of Chesapeake, Hampton, Poquoson, Newport News, Norfolk, Suffolk, and Virginia Beach, as well as the counties of Isle of Wight and York...¹

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