A Toll Is Not A Tax: Just Ask the Virginia DOT

Citing history dating back to 1772 and court cases ever since, lawyers for the Virginia Department of Transportation delivered a blistering rebuke earlier this summer to the false notion that tolls are taxes.

Along the way, VDOT put together a comprehensive, meticulous case that should be helpful to any tolling agency that faces a similar fight.

Plaintiffs had argued, and the circuit judge agreed, that tolls on the Elizabeth River Crossings, between Norfolk and Portsmouth, VA are taxes because they generate revenue, are imposed on one road to pay for improvements to another one, and involve legislative consideration of factors that extend beyond the cost of the highway that is being tolled. The case, now before the state Supreme Court, will be determined in the next few months.

‘Too Extravagant to be Sustained’

In the distinctive language of a high court proceeding, VDOT’s lawyers fired back that the plaintiffs’ lead argument—that any form of revenue generation is a tax—was “too extravagant to be sustained.”

Citing a long list of court decisions that distinguish between user fees and taxes, they noted that taxes are charged against income, sales, or property to support general government operations. Fees generate revenue in return for a specific service.

“If the trial court were right, and tolls were taxes, then there could never be any tolls on the use of highways, bridges, or tunnels in Virginia,” VDOT argued. Such a determination “would mean that the General Assembly has acted unlawfully in both imposing and delegating the authority to impose tolls, for many generations, and that its constitutional violations have escaped the attention of generations of Virginians.”

The agency’s lawyers also pointed out that the concession was located close enough to the tunnel improvements that the users who paid the toll would benefit directly from the improved traffic flow it funded.

“The tolls obviously will generate project-related revenues—just like any other tolls in use throughout the history of the Commonwealth,” and “benefit the historically and functionally intertwined transportation network providing passage between the inner-port cities of Portsmouth and Norfolk.”

What’s New is Old

The VDOT legal team dug deep to sustain its argument that generations of Virginians had accepted tolling, dating the first use of tolls to finance highway construction back to 1772. In that year, the General Assembly named a group of trustees to build and operate a toll road between Warm Springs and Jenning’s Gap, VA.

In 1785, state legislators showed a keen understanding of the need to maintain highways once they’ve been built. They appointed commissioners to erect toll gates “across the roads, or any of them, leading into the town of Alexandria,” and apply the funds “towards defraying the expenses of clearing and keeping in repair the roads leading from Snigger’s and Vestal’s gaps to Alexandria, and also from George-town to Alexandria.”

These and other historical milestones remind us that tolling is a very old financing method. It predates the very existence of the United States, and was an acceptable option to the founding legislators and citizens who are so regularly invoked in today’s political debate over public finance.

By unearthing these very old precedents, the Virginia DOT has done our entire industry a great service. Our job over the next year will be to help state and federal governments rediscover the wisdom that helped build the nation’s earliest public roadways.

A note of thanks to TOLLROADSnews for the original pointer to this story.

photo credit: Dougtone via photopin cc