Real toll relief won’t come from Alexandria
As a younger man, Gov. Glenn Youngkin was a basketball player at Rice University. His latest ploy was a desperation half-court heave at the buzzer to win the support of key lawmakers for his $1.5 billion vanity project in Alexandria. The governor planned to direct $322 million in state funds, including $165 million in excess revenues from the arena, to toll relief for low and middle-income users of the Downtown and Midtown tunnels between Portsmouth and Norfolk.
Not coincidentally, Portsmouth is also the home of two of the most powerful legislators in the General Assembly: Sen. Louise Lucas and House Speaker Don Scott. Youngkin’s goal could not be plainer. He wanted to buy $1.5 billion in arena funds with $322 million in toll relief. As a former private equity executive, the governor knows a good deal when he sees one. Unfortunately, those on the other side of that deal — the citizens of Hampton Roads and the taxpayers of Virginia — were almost certain to come out on the losing end.
First, the governor’s plan relied on there being excess revenue from the arena to devote to toll relief. Decades of economic research show that promises of economic development riches and associated tax revenue flowing from publicly financed arenas are almost entirely fictitious. Absent such excess revenue, nearly half of the toll relief promised in Youngkin’s proposal will never materialize.
Second, the $130 million the plan devoted to paying off unpaid tolls will not stay in Hampton Roads, or even the United States. That revenue will instead almost certainly flow to Elizabeth River Crossings (ERC), the operator of the Downtown and Midtown tunnels. ERC, a company that Lucas once labeled “corporate terrorists,” is in turn, owned by Spanish and Italian multinational conglomerates Atlantia and ACS, as well as Canadian life insurance giant Manulife Financial.
Finally, redirecting $165 million from Alexandria to Hampton Roads runs counter to the stated rationale for the arena. Stadium backers in Alexandria justified the massive price tag for the project as a needed investment to spur commercial activity and diversify the city’s tax base. If that revenue was instead redirected to toll relief for Hampton Roads, taxpayers in Alexandria will continue to suffer from high residential tax rates while simultaneously enduring the quality-of-life disruptions the arena will create.
There are better options for providing toll relief to hard-working Hampton Roads residents than pirating non-existent tax money from Northern Virginia.
In the short term, the commonwealth should extend the existing Toll Relief Program, which is set to expire in 2036. Funded by ERC, the program contributed $3.3 million to the pocketbooks of low- and middle-income residents last year. To provide longterm toll relief to Hampton Roads, however, the commonwealth should renegotiate the ERT Comprehensive Agreement. Dubbed “the worst deal ever negotiated of any transportation deals in the history of our commonwealth” by former Gov. Terry McAuliffe, the deal is massively unfair for Virginia while generating huge profits for ERC’s foreign owners. The General Assembly should direct the commonwealth to renegotiate the agreement with a goal of achieving lasting toll relief for low-and-middle income tunnel users and a better deal for Virginia taxpayers.
Youngkin’s financial wizardry may have been impressive to his pals in the world of high finance. Unfortunately, his plan to create toll relief for Hampton Roads with money from the “Glenn Dome” in Alexandria was nothing but a shell game. We can be thankful that lawmakers in Richmond were not taken in by his sleight of hand.
Dubbed “the worst deal ever negotiated of any transportation deals in the history of our commonwealth” ... the deal is massively unfair for Virginia while generating huge profits for ERC’s foreign owners.