General Assembly Passes I-81 Funding Package

On April 3rd, 2019, the General Assembly passed Governor Northam’s I-81 Improvement Program legislation amendments related to funding mechanisms for improvements to the corridor. The Richmond Times-Dispatch reports that the transportation package that the legislature adopted will generate more than $280 million annually, with half going to projects in the I-81 corridor plan that the Commonwealth Transportation Board adopted in December 2018. The rest of the new revenues will pay for improvements to other interstate highways, based on how much truck travel they carry, which includes the Interstate 95 and Interstate 64.

Most of the new revenues will come from increased registration fees for trucks, based on their weight and wear on roadways, as well as higher taxes on diesel fuel. According to a summary in The Roanoke Times, under Northam’s amendments, tractor-trailer registration fees will increase by 10 cents per gallon in two phases — one on July 1st, 2019 and another a year later. Beginning in July 2021, the diesel tax will increase to 2.03% of the statewide average wholesale price per gallon, which equates an 6.8 cents per gallon increase.

I-81 handles 41 percent of interstate truck travel in Virginia, so it will receive the biggest share of the revenue from higher truck fees and diesel taxes. The new I-81 corridor fund also will receive about $60 million a year from a 2.1 percent regional fuel tax that will be levied in 36 jurisdictions within five regional planning districts in the corridor, similar to the regional taxes approved in 2013 for Hampton Roads and Northern Virginia.

The regional taxes could be used to raise about $550 million in bonds for projects along the I-81 corridor. The funding package also could help proposed transportation projects across Virginia by freeing up money in the state’s SmartScale program adopted in 2014 for allocating money for road and rail improvements. If the new funding had been available in the first three rounds of SmartScale awards, an additional $933 million would have been available to fund other projects, said Deputy Secretary of Transportation Nick Donohue, but he cautioned that the state does not plan to go back and replace the money used for already approved projects.

For more information, please visit the CTB’s I-81 project website: www.va81corridor.org.

The Office of the Governor’s full March 28th, 2019 press release regarding I-81 Improvement Plan Amendments is available here: Governor Northam Announces Amendments to Fund $2 Billion I-81 Improvement Plan