Commercializing Welcome Centers, Rest Areas Could Ease WVDOH Financial Burden

Forty some odd years ago NASA realized that a ball point pen would not write in space. They worked on the problem and spent over a million dollars to make a ball point pen that would write in zero gravity.

They were successful and developed a beautiful pen at great taxpayer’s expense, but NASA solved the wrong problem. The problem was not to make a pen write in space, but to just “write” in space. The Russians realized that they only needed to write in space, not use a ball point pen and simply used a five cent pencil instead of wasting a million dollars. The lesson is the first thing you must do to be successful in solving a problem is make sure you have identified the true problem.

At the end of November the amount of expected revenue for the West Virginia highway fund was down $14.6 million, mostly because of the poor economy. Immediately there was talk out of Charleston about raising taxes, but the tax rate is not the real problem. The real problem is the rising cost and reduced revenue. Until these problems are solved, the state’s Department of Highways will continue to have problems even in good economic times. The state must get creative on generating additional revenue and cutting cost.

There are 22 welcome centers and rest areas run by the WVDOH. Each costs approximately $500,000 a year in annual maintenance for a total of $11 million dollars. Two of these on the West Virginia Turnpike have a Federal exemption to allow them to be commercialized, which is pretty common on toll roads. However they also occur in a few other places on non-Toll Road Interstates, such as I-95 north of Baltimore, MD.

Commercialization of West Virginia’s other twenty rest areas and welcome centers could provide a partial solution to the WVDOH funding problems. As these are leased to private companies then a $10 million drain on the WVDOH would disappear as responsibility for the maintenance would shift from the state to the private companies. There would also be a revenue stream generated from the lease agreements. A drain on the state highway fund would be turned into revenue generation, all without putting any additional burden on the taxpayers.

There would also be employment benefits for the state. Each rest area at a minimum would end up with a fast food restaurant and a convenience store/gas station. The average fast food chain restaurant employs about 60 persons and the convenience store 10 persons. This would generate approximately 1,400 private sector jobs across the state from entry level fry cooks to well paid manager positions. As an example; if the two rest areas in Braxton County were commercialized in this way, the Braxton County unemployment rate could drop from 8.3% to 5.3% making it the lowest in the state.

The benefits do not stop at increased employment and reduced operating cost to the state. The free market approach also creates new tax revenue streams into the states coffers. The 1,400 new employees and the new businesses created will pay income taxes to the state. There will now be property taxes paid to the counties at the rest areas on the equipment installed where before there was none. Most important to WVDOH is the gasoline sold at the new filling stations will pay new taxes directly to the highway fund without raising taxes on struggling WV families.

In these hard economic times West Virginia must work to solve the correct problems and reduce the burden of taxes on all the people of the state in the process. We must look for new solutions to old problems and stop thinking the only solution is increasing taxes.

New Keyser Bridge Traffic Patterns

If your coming from the Fountain area on Rt 46 and want to go North on US 220, then your going to see some major changes in the traffic patterns. The blue lines are where the new roads and bridge will be.

You will no longer be able to turn onto the bridge from Center Street. So you will have to go all the way to Piedmont St and then make a right at the light to access the new bridge. You will also not be able to just drive to the end of Armstrong street and make a left crossing traffic to go to Cumberland. That will now be a one way off ramp for the new bridge. If you stay on Armstrong St. to the end, then it will bring you to Piedmont Street across from Orchard Street. There will be major changes in traffic patterns.
On the McCool side of the river you will no longer be able to turn left to go to Westernport from Keyser. You will now have to turn right and circle under the new bridge to go to Westernport.

Looks like we are going to have major changes in the traffic patterns. Many on the West Virginia side may not be for the best. Davis Street is going to become much more busy than it already is. Looks like we will need a new traffic light at Orchard and Piedmont to handle all the truck traffic that will be routed that way.

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.

West Virginia’s High Fuel Tax is Reducing Fuel Tax Revenue

West Virginia has one of the highest fuel taxes in the nation. That tax adds 31.5¢ to each gallon of fuel we purchase within the state and that bad tax policy, like so many others Charleston has given us, is reducing our tax revenue.

Free market forces are doing exactly what they will always do. The price-conscious consumer searches for the lowest price, and they are increasingly finding that price across state lines. With much of West Virginia’s population located along the border in cities like Weirton, Parkersburg, Huntington, Bluefield, and others, it is easy for consumers to avoid the higher priced West Virginia fuel. Sometimes the choice for consumers is extremely easy with gas stations sitting on both sides of the border within sight of each other having up to an 18¢ difference in price on the same grade of fuel — the West Virginia station being the more expensive of the two. The state’s fuel tax is the biggest cause of the price difference.

These price-conscious West Virginians are voting to fill their tanks in other states, decreasing the amount of tax the state receives. At the same time they are giving a tax boost to the states of Maryland, Ohio, Pennsylvania, Virginia and Kentucky when they pay that state’s fuel tax.

West Virginia funds its entire portion of highway construction and maintenance with taxes from fuel. A major component in highway maintenance is the petroleum based product; asphalt. The state’s equipment runs on diesel fuel and gasoline. All of these items are rising in price significantly right when the state’s poor tax policy is reducing the amount of funding the Department of Highways receives.

An opportunity for West Virginia lies in these high fuel prices, and we need to seize it. We must cut our fuel taxes now and get two great benefits. The first will be to West Virginia taxpayers who will see an immediate reduction in fuel cost providing much-needed relief. That lower fuel cost will free up consumers’ money to spend in other parts of our economy, causing long overdue growth in West Virginia.

The second benefit will come when the free market brings those price-conscious West Virginia consumers back to purchase the cheaper fuel. They will now begin to pay the West Virginia fuel tax instead of the fuel tax in the other states, but something else will happen as well. Price-conscious consumers living in the bordering states will begin to shop in West Virginia for fuel. Those from Ashland, KY, Marietta, OH, Cumberland, MD and other bordering communities will cross over the border, buy fuel here and pay West Virginia taxes instead of their home states, providing greater tax revenue for West Virginia.

Now is the time for West Virginia to make a significant cut in the fuel tax to help West Virginia taxpayers and consumers increase revenue to the WVDOH and boost our state’s economy. We need to put an end to the bad tax policies in West Virginia that are destroying our economy.

Department of Higher Expense..er..Highways

The DOH complains of not having enough money to maintain the roads in the state, or to build the new ones we need. That is nothing new or for that matter normal for any government department in any government. At the US 50 Association meeting held in Petersburg Wednesday the discussion turned to getting the funding to make improvements.

The ultimate goal of the group is to get US 50 upgraded to 4-lanes from the Virginia state line to I-79 at Clarksburg. This remains the only 2-lane section of US 50 from Ocean City, MD to well into Ohio. The cost for the complete upgrade is estimated at 2 Billion Dollars, but that is because of a WVDOH policy. They have a policy that states all new 4-lane roads are to be built on all new alignments, basically use nothing of the old road. In Virginia US 50 was upgraded to 4-lanes by using the original 2-lane as one half. This cost on average about 70% of building on all new alignments. Now this would turn the WV project from a 2 Billion project into a 1.4 Billion project. Last time a checked six hundred million was a nice savings.

Lets face it, even at 1.4 Billion the US 50 project is a long ways off. But it does bring up the question; of all the projects around the state a change in policy could build current 4-lane projects cheaper. This would free up a lot of money for other road improvement projects in the state, allow more 4-lanes to be built in any given year, or build the same and lower the gas tax. All or any would help the states economy.

Government agencies concentrate too much on increasing funding, and not enough of saving money. Ben Franklin had it right, a penny saved is a penny earned. That penny of course is a tax penny that belongs to you and me, so we should insist it be saved.