Dulles rail and 'Tony Griffin’s letter'
Robert H. Jackson
2008-02-08 15:04:16
Elected officials, business interests and community leaders are attempting to restructure Dulles rail. To do the job right, we must also address critical financial issues raised in a Nov. 1, 2005, letter from Fairfax County Executive Tony Griffin to Virginia Transportation Secretary Pierce Homer. That letter assured Richmond of Fairfax County’s long-term economic support for Dulles rail. However, it also triggers important fiscal questions that must be answered now, before rail transit is finalized.
Mr. Griffin recognized final incurred costs for large transportation projects always spurt well past estimates. Indeed, estimated costs for Dulles rail have gone from around $2 billion to $5 billion and, as I write, the project has not yet entered final design.
What did Griffin promise in support of rail? He stated:
"Fairfax County has also committed to fund its share of increases to the estimated project costs that may arise during final design, negotiation of a Full Funding Grant Agreement with the Federal Transit Administration or due to other circumstances. We intend to either use a “pay-as-you-go” approach using general revenue or through bonding approved through a referendum."
As far as I know, the letter remains valid. The Board of Supervisors has never repudiated it. We are, therefore, committed to pay locally for at least a part of Dulles rail cost overruns.
Let’s put this commitment into context. The project will certainly cost more than $5 billion before it is completed. Even assuming Sen. John Warner and Gov. Tim Kaine shake loose the $900 million from the FTA, we must still fund $4.1 billion. Of that amount, landowners are committed to pay $400 million or so. Let’s assume that they pay $600 million to save their density windfalls that are pinned to the arrival of rail. That leaves $3.5 billion unfunded. How much will Loudoun County pay? Can Dulles Toll Road users truly be expected to pay several billion dollars to make up the rest of the costs? Also, what happens when the costs increase above $5 billion? It is very unlikely that we can expect to tap the federal government again to cover cost overruns.
Bottom line: A significant portion of these costs will, as stated in Griffin’s letter, be paid by Fairfax County taxpayers. Rail construction costs will compete against our schools, parks, police, libraries, etc., for budget dollars. They will also force real estate taxes higher. But this general understanding is not sufficient. It’s like buying a new house without knowing what the monthly mortgage payments will actually be.
There are important questions that need definitive answers now, not two years from now. What are the likely impacts on real estate taxes and county services? How much will the General Fund need to pay? What happens should some capital costs need to be bonded and added to county debt? Would bonding force postponement of projects to rehabilitate our aging public school buildings or to start local road projects? With job growth centered in Reston and points west, along with the certain explosion of jobs in South County because of BRAC, will we have resources sufficient to serve those locations? Or will the Tysons portion of Dulles rail over-consume tax dollars? Could tax increment financing be used for rail costs, but if so, what happens to funding for all of the additional public facilities that will be needed to support an urban Tysons Corner? Who will pay for them? We need answers to these questions now.
This is not to argue against rail. We need mass transit at Tysons Corner and throughout the Dulles Corridor. Many people prefer rail to be part of the transit plan. Similarly, most support making Tysons a walkable and more attractive community. But we simply must not ignore real fiscal issues in our chase of dreams. Tysons Corner will never function like Ballston or Reston Town Center. Adding density to Tysons because of the availability of rail, will result in more, not less, automobile traffic. Most of the gains from an urban Tysons Corner will flow to a few well-placed landowners. We are not paying for magic bullets. Therefore, we must make prudent decisions based on solid information. We need to know these answers in full detail now before there are binding commitments.
Robert H. Jackson is president of McLean Citizens Association and practices telecommunications law in Washington, D.C.