The Virginia Highways and Transportation Department shortchanged the state's urban and county road systems by more than $300 million in construction funds during the past 14 years and improperly spent $59 million more on road maintenance, according to a legislative report released today.
The report, the product of a two-year study of the financially troubled department, also indicated state revenues would fall $262 million short of the most bare-bones highway budget for the next four years and suggested a number of possible gasoline tax increases to meet the shortfall. Included were proposals for a 4 percent retail sales tax on purchases at the pump or a 3.5 percent tax on wholesale gasoline, both of which would raise prices by four to six cents per gallon.
Today's findings by the Joint Legislative Audit and Review Commission help set the stage for a prolonged legislative battle at the 1982 General Assembly session over how to raise more money for roadways while at the same time reshaping the agency to make it more efficient and more responsive to legislative directives.
The report suggested the department had ignored such directives during the past decade. It accused highway officials of evading the intent, if not the letter, of the law since 1967 by improperly spending $304 million for interstate highway building and other federally-related projects at the expense of improvements in the state's cities and urban counties such as Northern Virginia's Fairfax County.
Highway officials "allocated" their funds as state law requires, but the report said "actual spending patterns . . . varied greatly from allocations."
It also charged that officials had ignored the state Appropriations Act in overspending on road maintenance during a two-year period ending in 1980. The overspending went undetected by state budget agencies "because of flaws in budget implementation and accounting," the report added.
Highway department spokesman A.W. Coates said the agency is scheduled to make a formal response to the report's findings on Jan. 11. Coates said the department did funnel some previously allocated state funds to construction projects on projects on which matching federal money was available. Such transfers were bookkeeping measures, he said, adding the department intends eventually to meet its required allocations with future state funds.
"We are certain the highway law was not deliberately bypassed," said Coates, who also maintained the $59 million discrepancy in maintenance funds was a mere "misunderstanding of terminology." He said the funds charged to a maintenance account were actually used on construction projects.
The findings were unveiled at a hearing today at which state Sen. Edward E. Willey of Richmond, chairman of the powerful Senate Finance Committee, warned that the department officials would undergo tough scrutiny by his panel at the next legislative session. "It's time to put some equity into how taxpayers' money is being distributed," said Willey.
The legislative report offered a number of other stinging criticisms of the department. It accused the agency of producing widely inaccurate revenue forecasts in recent years ranging from a $77 million underestimate of revenues in 1978 to a $30 million overestimate in 1980. It also charged that highway officials had evaded a 1978 legislative mandate to upgrade its involvement in mass transit.
It also charged that the state's influential trucking industry was underpaying its share of road costs by about $19 million a year, and was being effectively subsidized by passenger cars who overpay by the same amount.
Trucks avoid other possible costs as well, said the report, which noted that penalities levied against overweight trucks in Virginia are less than half that in Maryland.