Voters in West Virginia will soon decide whether to tap bonds to repair and upgrade roads.
The vote follows action at the statehouse to raise the limit on Grant Anticipation Revenue Vehicle bonds, or GARVEE bonds, to cover highway work.
Specifically, HB2878 increases from $200 million to $500 million the amount the WVDOT’s Division of Highways is permitted to use to apply for bonds.
The new law stipulates funds can only be used to complete interstate or other highway facilities designated as part of the federal-aid highway system or for toll bridges.
The bonds will be repaid within six to 12 years.
Gov. Jim Justice said the road bond referendum will allow the state to address roads and bridges that are crumbling.
“We’ve got to modernize our transportation system,” Justice said in prepared remarks. “At the same time we also need to make sure the people get what they pay for and that is an effective, efficient, accountable road system – and that’s exactly what we’re going to do.”
Overall, the referendum would create $1.6 billion in funds to upgrade the state’s roads and bridges.
Justice said there are 600 road construction projects identified throughout the state. Included on the list is a West Virginia Turnpike widening project in Beckley.
There are multiple funding mechanisms for the projects.
GARVEE bonds, or federal aid funds, are one component. They account for an 80-20 match, which accounts for about $50-$55 million of federal funds to total $500 million of bonded funds.
The second component is turnpike revenue. The option would turn about $50 million of turnpike revenue into $500 million for the bonded account.
The final component are the general obligation bonds that include money from the Legislature’s recently approved increase in fuel taxes and vehicle fees.
Approved during a special session earlier this year, the plan raises the state’s fuel tax rate by 3.5 cents. Specifically, the variable component based on wholesale price increased from a minimum of 11.7 cents per gallon to 15.2 cents. The flat portion of the fuel tax remains at 20.5 cents.
The motor vehicle sales tax, or privilege tax, is raised from 5 percent to 6 percent.
Various fees imposed by the state Department of Motor Vehicles also were increased on July 1.
In all, the tax and fee increases are estimated to raise about $130 million yearly.
The special election on bonds is set for Oct. 7. Early voting begins Sept. 22 and continues until Oct. 4.
For more 2017 election coverage from Land Line, click here.
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