Road Worrier: McCrory ponders how to pay for NC transportation needs

During his first two years in office, Gov. Pat McCrory changed how North Carolina chooses the best uses for transportation dollars, and he spelled out his “25-year Vision” for transportation improvements from the mountains to the coast.

Now comes the hard part. At the start of his third year, McCrory may be ready this week to take the big next step: recommending new taxes and other means of shoring up our anemic financing for roads, transit and other transportation needs.

The Republican governor has said he’ll give the 2015 General Assembly “targeted revenue recommendations” for filling a transportation funding deficit expected to reach between $34 billion and $94 billion by 2040.

McCrory accomplished more than many North Carolinians expected in 2013 when he overturned a politically entrenched highway spending system. He established a more open and objective Strategic Mobility Formula, which considers urban traffic congestion and other modern problems.

In September, when he set out priorities for upgrading ports and railroads, and for helping rural residents commute to cities within and outside state borders, McCrory started some new conversations about the future.

But how will McCrory pay for the transportation we need?

Whether he answers the question Wednesday in his State of the State speech or waits for another chance, we can speculate now about McCrory’s options for new taxes and other ways to generate billions of transportation dollars.

We know what could work – on paper, at least. State agencies, study commissions and university experts have produced a shelf-full of reports on North Carolina’s transportation money choices.

a $1 billion bond issue

rated as low priorities

But you don’t hear many calls to increase gas taxes, which are our chief source of transportation money ($1.82 billion in 2013). In fact, the state gas tax is scheduled to fall sharply in July, because of a legislative formula that pegs the tax rate to plunging gas prices.

McCrory and the legislature might agree to set a new floor on the gas tax – let it fall a couple of pennies, so it counts as a “tax cut,” but not drop so low that it would cost the state Department of Transportation a few hundred million dollars each year.

A report from N.C. State University

Some states are experimenting with mileage fees, widely seen as an eventual replacement for gas taxes. There are privacy issues (based on widespread misunderstanding, NCSU says) and technological hurdles.

The NCSU study says 1.9 cents per mile would equal what North Carolina gets from gas taxes now. Higher fees could be set for heavy trucks.

One study

Opposition in Eastern North Carolina has squelched efforts to approve toll financing for the overdue overhaul of Interstate 95. Still, toll express lanes – with variable tolls that cost more when nontoll-lane traffic is slower – appear to be in the future as a means of paying for improvements to urban commuter routes.

the cost of services they get from DOT, worth millions of dollars

It’s too early to guess whether our tax-whacking legislature will go for any of these ideas – or whether they’ll even hear them.

This story was originally published February 2, 2015 at 5:52 PM with the headline "Road Worrier: McCrory ponders how to pay for NC transportation needs."