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The contents of this report reflect the views of the author(s), who is responsible for the facts and the accuracy of the data presented herein. The contents do not necessarily reflect the official views or policies of the Virginia Department of Transportation, the Commonwealth Transportation Board, or the Federal Highway Administration. This report does not constitute a standard, specification, or regulation. Any inclusion of manufacturer names, trade names, or trademarks is for identification purposes only and is not to be considered an endorsement.


A Guide to Transportation Funding Options Available to Virginia Jurisdictions
Audrey K. Moruza
Audrey K. Moruza
Audrey K. Moruza
Year: 2019
VTRC No.: 19-R1

This report provides a comprehensive summary of practices in Virginia jurisdictions for the purpose of raising local revenue for transportation purposes. To the extent possible, every current practice was located in the Code of Virginia toenable tracking of developments in the statutes and permissions referenced inthe report.


Transportation districts featuring special in-district taxation for the funding or financing of district transportation projects have a 55-year history in Virginia, with a number of variations approved and rescinded by the Virginia General Assembly over the years.  Major transportation districts exist currently on a scale from the multijurisdictional/regional to specific highway corridors, and they scale down to the residential neighborhood at the most local level.  Urban settings are conducive to successful regional transportation districts in Northern Virginia and Hampton Roads.  The strategy of tax increment finance areas is practiced widely in urban jurisdictions as well.  Not least, Virginia has a long history of tolled highway facilities in urban areas.  For jurisdictional control, however, specific legislative permission is required.


In more rural areas of Virginia, local transportation funding has been derived from coal and gas extraction, theVirginia Tobacco Commission, and three federal agencies that target communities in relative need.  A concentration of such communities has long been identified in southern and southwest Virginia.  These funding sources can usually be pooled effectively for local transportation projects.


By Dillon’s Rule, Virginia jurisdictionscurrently have de jure permission under the Code of Virginia to enact several means of local revenue generation for transportation, but they must meet eligibility rules to implement others.  Yet the Code of Virginia is a living document with the potential to be changed annually by the Virginia General Assembly, and transportation funding is a perennial lsubject of intense legislator interest and involvement.