No Logic in States Numbers on Corridor H Funding

Recently an article appeared in the Charleston Daily mail entitled, “Official targets slow work on Corridor H” and state officials gave reasons for the continued delay of the highway. Most of the reasons given by the state make little or no sense.

The state claims they couldn’t pay the back the bonds. According to the article, “Even if the Legislature raised the cap, Walker said the state still couldn't pay back the debt on such a project.” This statement is totally illogical, as the bond method builds the highway at a lower cost. Consider that the current estimate for completing constructions is 1.5 billion dollars over the next 26 years. Of those 1.5 billion dollars, the state is responsible for 20% matching funds as outlined by the Appalachian Region Commission and that cost would be $300 million dollars.

Now if the state issues bonds to complete the final 50 miles of Corridor H that have yet to receive funding, at 22 million dollars per mile , then total construction cost would be approximately 1.1 billion dollars. The states portion of that would be $220 million saving the West Virginia taxpayers 80 million dollars and saving the US taxpayers 400 million dollars.

Walker went on to say, “"It would completely bleed the state road fund. If we were able to do all of that, very important programs, like paving and bridge repairs, would have to be sacrificed." My question to Mr. Walker would be; why would freeing up an extra 80 million dollars from Corridor H, require the state to cut other projects? Those 80 million dollars in savings from Corridor H could be used to increase funding of very important programs, like paving and bridge repairs. The reality is the exact opposite of what Mr. Walker says; the state will have to cut $80 million worth of future projects, because they are not changing the funding method.

Now it is estimated that Corridor H over its length will create an additional 8,000 jobs in the state. If we bond the highway and complete it in 2015, then using the median income in the state, 32,589 dollars , those 8,000 jobs will create an additional 260 million dollars of annual income in the state. The state taxes as on that median income will be around 15.6 million dollars in annual revenue for the state. From an early completion date of 2015 to 2035 the current funding completion date, the total taxes collected from those new jobs, adjusted for inflation , will be 439 million dollars. The estimated annual Federal Tax from the new jobs will be 39 million dollars annually or 1.1 billion over 20 years adjusted for inflation.

So our choices are continue with the current funding method of Corridor H, which will complete it around 2035 and cost the taxpayers of the nation and state 1.5 billion dollars with small increase in employment during the construction phase, or build it over the next 6 years at a cost of 1.1 billion generating around 1.5 billion in new state and Federal tax revenue between 2015 and 2035 in the process as those new jobs are created in the near term. I prefer the method where Corridor H is completed early and pays for itself with taxes generated from the new jobs it will create. We have to start being smart about how we build highways and other large projects in the state. We must be fiscally responsible.