Marchand: Tolls pick winners and losers in Virginia economy

Marchand: Tolls pick winners and losers in Virginia economy

The Roanoke Times | Jan 6, 2019

Franky Marchand Marchand is the Vice President and General Manager of Volvo Group Truck Operations at its New River Valley plant.

The Virginia General Assembly will have many important decisions to make this upcoming legislative session, and among those decisions is how to generate funding to fix the Interstate 81 corridor. The Commonwealth Transportation Board’s (CTB) recent I-81 report presents two approaches to fund badly needed improvements: a regional increase in sales and fuel taxes or placing tolls on the entire I-81 corridor. For manufacturers like Volvo Group North America, the decision is clear: tolls will be harmful to our Volvo truck manufacturing operations and our 3,500-plus employees in Dublin, Virginia. The damaging economic impacts of tolls should be heavily weighed by policy makers as the Assembly assesses their potential use.

Tolls create winners and losers, and they are highly inefficient because they require construction of gantry equipment as well as administration and enforcement for billing. It is Virginia businesses that will feel the negative impacts the most, not the out-of-state trucks that are believed to be the targets of tolling. I-81 tolls will hurt hundreds of businesses’ ability to compete with manufacturers in other states and countries. Volvo Trucks’ New River Valley assembly plant in Dublin is the largest Volvo truck manufacturing facility in the world. We manufacture every Volvo truck sold in North America. We and other manufacturers on I-81 will face a competitive disadvantage should we have tolls levied on every shipment we make and receive in our home state.

Disrupted logistics and lower shipping volume are some of the consequences of tolls. These consequences would lead to the kind of uncertainty that’s problematic for any business, not just manufacturers — making it more difficult to estimate logistics flows and costs when considering plans for expansion, renovations or other changes. Tolls will throw the corridor’s existing and future economy into flux.

Tolls are an economic disadvantage to site selection checklists and will deter many important economic development opportunities for the western half of the state. In Pennsylvania, where the Volvo Group’s Mack Trucks and Volvo Construction Equipment facilities are located, the state is experiencing “toller’s remorse.” Gov. Tom Wolf recently stated that the ever-rising cost of turnpike tolls is “driving business away” from Pennsylvania. With the threat of tolls looming, companies may look elsewhere to locate large new manufacturing facilities. Tolls are an extra tax that can make a state’s business climate less attractive.

Virginia businesses and drivers know what tolls will bring to the commonwealth because we have been down this road before. When I-81 tolls were last studied in 2003, it was found that traffic was 26 percent more likely to take secondary roads to avoid tolls. This would mean local townships and roads along the corridor would see a considerable uptick in truck traffic. Previous studies also found that even if all trucks were removed from I-81, there would still be congestion — meaning cars, not just trucks, are a significant part of the traffic equation.

We are very grateful to Gov. Northam and the Virginia Assembly for tackling this issue. They clearly care very much about Virginia’s economy and about fixing I-81, which has long been an issue for Volvo and other manufacturers.

As a proud resident manufacturer in Southwest Virginia, we ask that the Assembly support regional taxes over tolls which will be fairer for all Virginia residents.”  Read Story >>