11/13/2013Virginia Supreme Court Saves Toll Roads
Legality of toll roads restored by Virginia Supreme Court ruling.
Toll roads in Virginia have found themselves in legal limbo since May, but the state's highest court came to the rescue on October 31. Portsmouth Circuit Court Judge James A. Cales Jr had thrown the industry into chaos with a ruling that found the General Assembly violated the state constitution when it gave the Virginia Department of Transportation (VDOT) and the Elizabeth River Crossings toll road company authority to raise taxes in the form of tolls, which would be taxation without representation. In a 55-page ruling, the Virginia Supreme Court rejected the reasoning of Judge Cales.
Since 1952, a tunnel has crossed the Elizabeth River to connect the cities of Portsmouth and Norfolk, but as the area has grown so has traffic congestion. The state has constructed additional crossings. In 1995, the General Assembly passed the Public-Private Transportation Act which allows private, for-profit companies to build toll roads with heavy subsidies from state taxpayers. VDOT was given authority to cut these deals, including setting toll rates, without involving lawmakers in any way. An Elizabeth River $2 billion midtown tunnel crossing was first on the list of projects under the new law, with tolls set to kick in on February 1, 2014.
Portsmouth residents sued in July 2012, arguing that the tolls are taxes because their primary purpose is raising revenue. The residents added that the payments are not "voluntary" because there are no reasonable travel alternatives to the tunnel. The Supreme Court rejected this line of argument, and overturned the lower court's judgment.
"In the present case, the tolls paid by users of the project facilities are user fees because: (1) the toll road users pay the tolls in exchange for a particularized benefit not shared by the general public, (2) drivers are not compelled by government to pay the tolls or accept the benefits of the project facilities, and (3) the tolls are collected solely to fund the project, not to raise general revenues," Justice Leroy F. Millette Jr wrote for the court.
The high court likewise found no problem with unelected officials at VDOT and the private company setting toll rates because lawmakers made the decision to give away this power.
"Our role is simply to ascertain whether the political entities have acted within the constitutional boundaries that limit the exercise of their governmental power," Justice Millette wrote. "If so, then their policy decisions are subject to, and properly evaluated by, the political will of the people, and we have no authority to override such political decisions."
The justices decided that the General Assembly can do whatever it wants, so long as it what it intends is not explicitly prohibited by the state constitution. The power to tax cannot be delegated, but because the court insisted that tolls are not taxes, there is no problem with delegation.
"We also hold that General Assembly properly delegated to VDOT the legislative power to impose and set the rates of user fees in the form of tolls, and that this legislative power was not impermissibly delegated to ERC," Justice Millette concluded.
A copy of the decision is available in a 200k PDF file at the source link below.