Gov. Pat McCrory argued for months that North Carolina needed about $1.6 billion to catch up with serious transportation needs, and he said the state should borrow the money right away.
Legislative leaders agreed about the need, but in September they killed McCrory’s proposal to issue transportation bonds. They said they could raise all this money – and then some – without borrowing a dime.
And they did. The budget they passed this summer included legislative changes that will give the state Department of Transportation an additional $1.6 billion over the next 10 years to spend on construction projects. On top of that, DOT has an extra $250 million a year for maintenance needs, to replace more bridges and repave more roads.
Last week the governor released a list of 168 highway projects that will be added to DOT’s work schedule or moved up on the 10-year calendar – some to be built several years sooner – thanks to the increased construction spending.
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Locally the added funds will accelerate the widening of routes including U.S. 401 in Franklin County and northern Wake County (construction to start in fiscal year 2019), McCrimmon Parkway in Morrisville (in 2018), Creedmoor Road in northern Wake (in 2025) and Interstate 40 in Orange County (in 2023).
Elsewhere, the Mid-Currituck toll bridge will move ahead two years to start in 2017, and a big I-485 interchange in Charlotte will happen three years sooner (2016). Forsyth County is a big winner, with construction advanced by several years for the Winston-Salem Northern Beltway (2018).
The extra money will help 11 of the 22 highways McCrory had targeted for bond money. Legislators ignored his call for $50 million to pave gravel roads and another $50 million for non-highway projects. But they improved upon his plea for the state ports, to the tune of $35 million a year.
McCrory had proposed two bond packages totaling nearly $3 billion, more than half of it for transportation. The legislature deleted the transportation items in September and agreed to borrow $2 billion – if voters approve the bond issue in a referendum next March – for higher education, parks and other infrastructure needs.
DOT keeps gas taxes
Last week, when the governor announced the new timetable for building more highways more quickly, he was ready to claim part of the credit.
“The reforms I signed into law will get these roads built sooner,” McCrory said in a news release.
Where does all this money come from?
A big chunk is from the “reforms” McCrory mentioned. The new budget halted the yearly transfer of $216 million in gas taxes and other transportation revenues from the Highway Fund to the General Fund – where it had helped other agencies cover non-transportation needs. Now this money will stay with DOT.
And DOT will rake in an additional $150 million a year from a 30 percent increase in fees collected by the Division of Motor Vehicles for everything from car titles to driver’s licenses. In January, the yearly fee for renewing your car registration – not counting the local property tax you pay at the same time – will increase from $28 to $36.
Transportation Secretary Nick Tennyson said the spending surge shows that legislators “recognize the critical need we have to add to and maintain our infrastructure for the benefit of our citizens’ safety and convenience, and for our need to have a strong economy.”
But DOT will need more financial help in the future, to catch up on the state’s backlog of old bridges that need to be replaced.
“I don’t want to minimize the level of change that is involved” in the new budget, Tennyson said. “But this won’t be the last thing we’re going to talk about.”
Where might legislators find more money for transportation in coming years? They could revisit two ideas that were snubbed this year after objections from influential business leaders, including Board of Transportation members:
▪ An increase in the state’s 3 percent highway use tax on car sales, a rate lower here than in most of our neighbor states.
▪ A new fee schedule that would let DOT recover the cost of services it provides for free or for a nominal charge to a range of businesses across the state including utilities, developers and billboard advertisers. Drivers now subsidize these business services, worth millions of dollars a year, when they pay gas taxes.
Meanwhile, the budget also included a DOT money provision that McCrory and Tennyson will ask legislators to delete next year: A $500,000 cap on state funding for light-rail transit projects.
That measure forced DOT to cancel its commitment to invest $138 million over the coming decade in a $1.5 billion light-rail line from Durham to Chapel Hill. Unless legislators change their minds about this, Tennyson said, this money will be redirected to other non-highway needs – mostly for projects that improve safety at railroad crossings.