BACON: Metrorail’s taxation without representation

Constitutional challenge could stop the train

The Dulles Corridor Metrorail project has a way to go before it surpasses Boston’s Big Dig in the annals of the most ill-conceived, poorly managed public works projects of the modern era. But give it time. There is ample opportunity for things to go wrong.

Last month, the Metropolitan Washington Airports Authority (MWAA), the entity given responsibility for building the Metro’s silver line to Dulles International Airport and beyond, voted to approve construction of an underground station at Dulles at a cost of some $330 million more than the above-ground alternative and also to require contractors to use union labor - despite the $6.6 billion project’s massive cost overruns and Virginia’s status as a right-to-work state. News of the decisions ignited a prairie fire of protest across Fairfax and Loudoun counties.

Decrying the multijurisdictional MWAA’s action, Rep. Frank R. Wolf, Virginia Republican, has introduced legislation that would pack its board with a majority of Virginia appointees. Mr. Wolf’s response is understandable but he is missing the larger point. The core problem is not the quality of MWAA decisions nor that Virginia lacks sufficient representation on its board. It’s that neither the U.S. nor Virginia constitutions give MWAA the power to tax in the first place.

That, at least, is the argument of a class-action lawsuit filed in April by two Northern Virginia citizens on behalf of roughly 300,000 Dulles Toll Road commuters to roll back the toll increases MWAA enacted to help pay for the rail construction. John B. Corr and John W. Grigsby, frequent users, have been “victim* of the illegal exactions … since they began in 2005,” the suit contends. Of course, MWAA and its Virginia supporters don’t call the tolls a “tax.” But that’s exactly what they are.

The federal government opened the Dulles Airport Access Road in 1962 to provide a speedy, toll-free link from Interstate 495 to the airport. As the Dulles Corridor developed, the commonwealth of Virginia constructed the Dulles Toll Road, flanking the access road on both sides, to serve growing local traffic. That 16-mile highway, which opened in 1984, was financed with Virginia bonds. Tolls were set by the Commonwealth Transportation Board.

In 2005, the Kaine administration sealed an agreement whereby MWAA would take over management of the Metrorail-to-Dulles project and assume control over the Dulles Toll Road with the plan of diverting toll revenues to help pay for the rail project. If MWAA had been content to set rates at a level sufficient to maintain the toll road and pay for prudent expansions of capacity, then the tolls could be fairly described as a “user fee,” the lawsuit argues. Once MWAA set rates higher than needed to fund the road and began funneling those excess revenues toward an entirely different use, the construction of Dulles Metrorail, the rates become a tax, the suit argues.

“Under the Virginia Constitution, the setting of rates or fees for a public service or facility is a legislative power that can be delegated to an officer or entity within state or local government only by the express authorization of the Virginia General Assembly,” the lawsuit contends. Gov. Tim Kaine never submitted his agreement with MWAA to the General Assembly for approval. Moreover, MWAA does not even qualify as an entity to which the General Assembly can bequeath taxing power. The private authority, says the suit, is “completely outside of the governments of the Commonwealth, or its counties, municipalities or other entities of local government.”

The Kaine administration argues that the General Assembly did, in fact, authorize the diversion of toll revenues in the 1989 Bond Act, which provided for improvements to the Dulles Access Road corridor such as mass transit and “other capacity enhancing treatments.” But that authority was granted to the Commonwealth Transportation Board, not the MWAA. In any case, the delegation of authority to the unelected board was likewise unconstitutional, the lawsuit charges.

The case will be heard in U.S. federal district court in Alexandria on May 26. A ruling for the plaintiffs, declaring the transfer to MWAA to be unconstitutional, would torpedo Metrorail-to-Dulles. Someone else would have to be found to manage the project but no one is standing in the wings. Presumably, the Dulles Toll Road would be transferred back to the state, which would be more reluctant than MWAA to jack up tolls to the $20 per trip in 2040 projected by MWAA’s consultants. With all the uncertainty, bond buyers would be reluctant to purchase MWAA-issued bonds to pay for the rail construction. Project financing would dry up, leading to more delays and, most likely, to more cost overruns.

No, Metrorail-to-Dulles hasn’t attained the legendary status of the Big Dig yet. But give it time. Two or three weeks should tell the tale.

James A. Bacon is the author of “Boomergeddon” and publisher of the Bacon’s Rebellion blog at baconsrebellion.com.

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