Tolls are not Taxes, Rules Virginia's Supreme Court

They are fees, ruled the court on Oct. 31, overturning a May 1, Portsmouth circuit judge ruling in a major victory for both tolling and public-private partnerships. It allows tolls to fund the Elizabeth River Crossings, VDOT's P3 tunnels project.

3 minute read

November 4, 2013, 6:00 AM PST

By Irvin Dawid


The Elizabeth River Crossings is a public-private partnership (also known as a P3), working with the Virginia Department of Transportation (VDOT) to build a $2 billion, "two-lane tunnel under the Elizabeth River adjacent to the existing Midtown Tunnel." Known as the Elizabeth River Tunnels Project or by the Federal Highway Administration's Downtown Tunnel / Midtown Tunnel / MLK Extension, it connects the cities of Norfolk and Portsmouth.

"The Elizabeth River Tunnels Project is crucial to the future of the Hampton Roads transportation network," said Commonwealth of Virginia Transportation Secretary Sean Connaughton in a statement. [AASHTO Journal, Nov. 01]

On May 1, Judge James A. Cales Jr. said in a bench ruling that the General Assembly violated the state constitution by delegating the legislative power of taxation to the VDOT, an unelected entity.....," wrote Natalie Rodriguez of Law 360 on May 3.

Bloomberg's Sophia Pearson explains why the Virginia Supreme Court (PDF) overturned the decision.

The trial court erred in holding that the tolls are taxes because they are designed to raise revenue, the Supreme Court said. The tolls are paid “in exchange for a particularized benefit,” aren’t compelled by the government and are collected solely to fund the project, it said.

“We hold that the project tolls are user fees and not taxes,” the court said in its ruling. Thus lawmakers did not delegate the power of taxation to agencies such as the state’s transportation department in violation of the Virginia Constitution, it said.

Tolls would apply to the existing Downtown Tunnel "for the purpose of raising revenue to construct the new facilities" (the Midtown Tunnel and MLK extension) which constitutes "bundling", according to Patrick M. McSweeney, an attorney for the plaintiffs, wrote Natalie Rodriguez about the earlier decision. Neither Midtown nor Downtown Tunnels are tolled.

This aerial photo and detailed project map (PDF) labels the locations of all three tunnels (Midtown, Downtown, and proposed tunnel adjacent to Midtown) under the Elizabeth River, plus the MLK Extension.

AASHTO Journal cited Gov. Bob McDonnell who spoke of the critical importance of P3s in bringing private capital to fund essential infrastructure needs.

"Today's ruling confirms what my administration has been saying from the beginning: Virginia's Public-Private Transportation Act is a critical tool in addressing some of our toughest transportation challenges," said Gov. Bob McDonnell in a statement. "By attracting private sector capital and innovation and ensuring projects are completed in a timely, efficient, and cost-effective manner, our ability to partner with the private sector makes otherwise impossible projects doable. This is critically important for future job creation and economic growth in the Commonwealth."

Former Secretary of Transportation Ray LaHood also spoke to their importance on Oct. 16 when he stated that in addition to raising and indexing the gas tax, "federal and state governments should consider VMT taxespublic-private partnerships, and tolling to raise transportation funds."

Had the Va. Supreme Court upheld the lower court ruling in Danny Meeks, et al. v. Virginia Department of Transportation, et al, Virginia could "have been on the hook to repay the $422 million federal loan," wrote Dave Foster of The Virginian-Pilot on July 19, 2013.

Thursday, October 31, 2013 in Bloomberg

Three colorful, large beachfront homes, one khaki, one blue, and one yellow, with a small dune in front and flat sand in foreground.

Florida Homeowners 'Nope Out' of Beach Restoration Over Public Access

The U.S. Corps of Engineers and Redington Shores, Florida are at a standstill: The Corps won’t spend public money to restore private beaches, and homeowners are refusing to grant public access to the beaches behind their home in return for federal assistance.

June 7, 2024 - Grist

Multistory apartment building under construction.

New Tennessee Law Allows No-Cost Incentives for Affordable Housing

Local governments in the Volunteer State can now offer developers incentives like increased density, lower parking requirements, and priority permitting for affordable housing projects.

June 10, 2024 - Nooga Today

Pumping Gas

10 States Where the Gas Tax Is Highest

As the gap between gas tax revenue and transportation funding needs widen across the country, the funding mechanism is drawing increased scrutiny from both public officials and consumers.

June 9, 2024 - The Ascent

Concrete walkway with landscaping, decorative tiles, and picnic tables in a Los Angeles County park.

Wish Granted: Former Brownfield Transformed to New Park

Wishing Tree Park in West Carson, California officially opened last month, replacing a brownfield site with a much-needed green space for recreation and respite.

June 14 - Urbanize LA

"No right turn on red" and "Turning vehicles yield to pedestrians" sign.

The Tide is Turning on Right Turns on Red

The policy, which stems from the gas embargo of the 1970s, makes intersections more dangerous for pedestrians.

June 14 - NPR

Thick green forest on edge of lake in Louisville, Kentucky.

Louisville Begins Process to Clean Superfund Site

A public forest is home to dozens of barrels that have been leaking toxic materials for decades.

June 14 - Inside Climate News

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.