Toll Roads in Virginia

TransUrban controls the High Occupancy Toll (HOT) Lanes (95 Express) on I-95
Source: Virginia Department of Transportation, NOVA Signs

The first segments of Virginia roads where tolls were charged were ferries. The General Assembly determined who would be authorized to operate a ferry across rivers, and set rates for each ferry. Operators had to invest in their boats and pay the costs for operations and maintenance, and were allowed to retain 100% of the revenues.

Today, all remaining ferries are operated by the state. All but two toll roads and the Chesapeake Bay Bridge-Tunnel are public-private partnerships, where the state owns the road (including bridges and tunnels) but licenses a private corporation to build/maintain the infrastructure and collect tolls for up to 75 years. Primary reason for the partnerships is to limit the state's cost to build new transportation capacity. Toll revenue repays the private company's costs to issue and repay the bonds required to generate the initial funding for construction, so private rather than public debt funds new roads, bridges, and tunnels. Toll revenues also pay for operations/maintenance costs, and profits for the investors.

The Virginia Department of Transportation operates the toll system on I-66 inside the Beltway, so revenue from that segment is not shared with a private corporation. The Chesapeake Bay Bridge-Tunnel was built and is still operated by a separate authority. Toll revenues repay those bonds. The state did not commit its full faith and credit; if toll revenues do not exceed costs, those who bought Chesapeake Bay Bridge-Tunnel bonds will not get repaid on schedule.

The only privately-owned toll road in Virginia today is the Dulles Greenway. It was authorized under Virginia Highway Corporation Act of 1988 and opened in 1995. The state's license to operate it as a for-profit business expires in 2056.

Loudoun County commuters have complained constantly that the tolls are too high, but the formula for rate increases approved by the State Corporation Commission is based on debt and revenues. In 2020, the owners claimed that a road that had cost $425 million to construct was in debt by about $1 billion and had never been profitable, so rate increases were justified.

The incentives for the Dulles Greenway were to limit traffic and charge a high toll, because if traffic exceeded a certain level the company would be required to fund expansion of capacity. While the Virginia Department of Transportation was trying to improve highways to handle ever-increasing traffic flow in the region, the Greenway was setting such a high toll price that its use was flat. Drivers chose to use free highways that had to be upgraded by the state, while the Greenway avoided such costs by using high tolls to divert traffic.

An advocate for defining criteria to be used by the State Corporation Commission when reviewing rate increases, so increasing traffic on the Dulles Greenway to relive nearby congestion would become an objective, said in 2020:¹

If the users of the Greenway go down, the Greenway still makes money. What we ought to be looking at here is not maximizing their return, but maximizing the usage.

Transurban, the operator of the I-95/I-395 Express Lanes, committed in its public-private partnership agreement to provide a share of the tolls to the Northern Virginia Transportation Commission (NVTC). For FY2021, Transurban gave 24% of the tolls generated to that regional agency. The Northern Virginia Transportation Commission also receives the toll revenue generated by the I-66 Inside the Beltway Express Lanes, which the Virginia Department of Transportation (VDOT) operates.

The regional agency uses its toll-based revenue to fund projects for the Commuter Choice program along the I-395/I-95 Express Lanes corridor which are desined to reduce the number of cars getting on the highway. Commuter Choice projects include expanding park-and-ride lots, buying transit buses, and expanding the bikeshare network.²

Highways in Virginia

Where Does Virginia Get Funding for Transportation?

EZ Pass responders automatically deduct tolls without requiring cars to stop at toll booths
Source: Virginia Department of Transportation, NOVA Signs

dedicated toll lanes on I-95 are reversed for the morning and evening commutes
Source: Virginia Department of Transportation, NOVA Signs

Links

• E-ZPass

References