A Portsmouth judge's recent ruling in a case involving Virginia's Public-Private Transportation Act has sent shock waves through the commonwealth and the financial markets, as well it should. Members of the General Assembly have been hiding behind the PPTA by allowing unaccountable bureaucrats and political appointees to do the dirty work of raising taxes to fund major transportation projects.
The 1995, the PPTA was designed to allow the state to leverage scarce tax dollars by partnering with private companies. Under the Virginia Constitution, only elected members of the General Assembly — who are accountable to the people at the ballot box — have the authority to raise taxes. The PPTA was not supposed to supplant the legislature. But over the years, it has been used to justify what amounts to taxation without representation.
On May 1, Portsmouth Circuit Court Judge James Cales Jr. ruled that the legislature exceeded its authority when it gave the Virginia Department of Transportation "unfettered power" to set tolls on the $2.1 billion Midtown-Downtown tunnel project currently under construction by an international consortium "without any real or meaningful parameters." On Tuesday, Cales denied the commonwealth's request for a stay while it appeals his decision.
The Portsmouth ruling threatens to derail every public-private toll project in the commonwealth, including several in Northern Virginia.
Judge Cales agreed with Pat McSweeney, lead attorney for the Portsmouth plaintiffs, that tolls collected on one project to pay all or part of the costs of another constitutes a tax. And only the General Assembly has the power to tax. That's the same argument McSweeney and his colleagues made in a lawsuit regarding the Metropolitan Washington Airports Authority's imposition of higher tolls on the Dulles Toll Road to pay for the Silver Line Metro project without a vote by the legislature.
"One of the arguments that was made [in Corr, Grigsby v. MWAA] was that there was never a case that held tolls to be taxes," attorney Robert Cynkar, who with McSweeney is in the process of submitting Judge Cales' order to the Fourth Circuit Court of Appeals, told The Washington Examiner. "Now that's not true."
Fitch Ratings has already warned investors that Virginia may be on the hook for $1 billion if the Portsmouth decision is upheld. But the alternative is continuing to allow unelected, unaccountable bureaucrats and political appointees to wield unconstitutional power to set tolls on public highways as high as they please.