North Carolina’s road quality has been steadily improving
in recent years. It is now at or above the national average in
Importantly, recent reform of the state transportation
funding formula promises to keep this improvement on an
upward trajectory. The state’s new approach puts greater
weight on easing congestion, promoting economic growth,
and improving highway safety.
Transportation dollars are scarce, and people
understandably dislike being made to pay more, no matter the
mechanism. All the more reason that making more effective
use of existing funds is wise, responsible policy
- Combined spending by North Carolina governments on
transportation comes to about $4.5 billion a year. About
90 percent of that goes to roads and bridges.
- • In 2013 Gov. Pat McCrory and the General Assembly
enacted a new state transportation policy, the Strategic
Transportation Investments law, a significant reform
that changed how states, regions, and localities set
transportation priorities. The new law has clearly stated
goals upon which transportation projects compete with
each other for funding: congestion relief, safety improvement,
economic competitiveness, and the efficient
movement of people and freight.
- With data-driven project prioritization, North Carolinians
should expect better, more efficient use of highway
funds. A 2013 study by transportation experts at the
Hartgen Group and the Reason Foundation found that
through better prioritization of projects, North Carolina
could meet its highway needs without additional taxes.
- Data-driven project prioritization can be good even for
North Carolinians who live outside of the most populous
areas. Congested urban freeways can be a deterrent
to business locations and also expansions. Keeping them
more open means rural residents will have more opportunities
to connect with more jobs, retail, and other
amenities across metropolitan areas.
- North Carolina’s reform is ahead of the curve. In February
2016 the Congressional Budget Office released a
study of federal transportation priorities. Among other
things, it found that transportation spending would
produce greater benefits relative to costs if put toward
– adding interstate lanes in urban areas
– making major repairs of interstates and other
highways in urban areas
– repairing bridges, especially on rural interstates
and also primary and secondary roads
- Other changes have added hundreds of millions of dollars
a year to North Carolina transportation budgets.
- Notably, in the 2015-16 state budget, the legislature
ended the transfer of gas tax revenue from the Highway
Fund to the General Fund. Ending the transfer kept
over $215 million of revenue per year raised from motorists
for use to maintain and expand North Carolina
roads and bridges. That money no longer is taken for
use in other state programs.
- A similar change under the latter Easley and Perdue
administrations phased out the Highway Trust Fund
transfer, keeping over $172 million in revenue per year
to maintain and expand North Carolina roads and
- State spending for bridge repair and construction went
up by 58 percent (to $242 million) in the 2015-16 budget.
Spending on road resurfacing went up 22 percent
(to $498 million).
- Other road maintenance and resurfacing went up by
$68 million. Also, the Highway Trust Fund finances
$337 million for new highway construction projects
- Other recent changes include increasing Division of
Motor Vehicles fees and changing how the state’s excise
tax on gasoline is calculated.
- The gas-tax change lowered tax collections in the short
term, but it should allow greater revenues in the future
along with inflation.
- A March 2016 poll from High Point University found
North Carolina strongly opposed to several options for
raising highway revenue: 63 percent opposed toll roads,
72 percent opposed increasing the gas tax, and 87 percent
opposed taxing motorists per-vehicle-mile traveled.
Such findings underscore the wisdom in making state
transportation expenditures more efficient and effective.
- Stay the course on recent reforms. North Carolina
is at the vanguard of aligning scarce transportation
dollars with high-priority transportation needs. Her
motorists can expect better returns from a transportation
policy that makes more efficient use of existing resources
to improve transportation infrastructure where
it’s most needed.
- Continue to look for projects and programs funded
with transportation dollars that would be more appropriately
funded with General Fund dollars