North Carolina’s largest public transit systems are often credited with reduced traffic congestion and air pollution, efficient land use, reduced dependence on oil, and much-needed mobility for some residents. Are they fulfilling these missions? How are they performing? Who do they benefit? What do they cost?
State leaders claim that capping the gas tax at 27.1 cents per gallon would cost the state up to $135 million a year in road construction. They are wrong. The state will be just $5.3 million behind projections planned for in this year’s budget if it freezes the gas tax. Furthermore, nearly $400 million in gas tax revenues goes toward spending that has nothing to do with road construction. The General Fund, public transportation, railroads, and airlines all receive gas-tax revenues. There is no need to take money from road construction so long as gas-tax revenues are diverted to unrelated programs.
TEA-211, the federal US transportation program passed in 1998, resulted in a substantial improvement in overall road performance but at considerable cost, according to the 14th annual review of state highways by Professor David T. Hartgen, University of North Carolina at Charlotte.
North Carolina has the second-largest state-owned road system in the US, almost 79,000 miles. A study in 2000 for the John Locke Foundation using data from 1998 showed that the system was in quite poor shape on key indicators. Clearly, North Carolina is losing the battle on road conditions. The purpose of this analysis is to update the earlier study by gathering and reporting on road conditions for each county and determining how conditions in each county have changed since 1998.
Major road projects are freeway and arterial widenings, new freeways and arterials, new exits, climbing lanes and other major actions that are large enough to likely affect growth. Between 1990 and early 2004, North Carolina constructed 349 major road projects costing about $7.34 billion, about 50 percent of the total expenditures for the TIP and Loop roads and about 1/3 of the total NC State highway program over the same period. This study reviews recent trends in North Carolina’s highway funding practices and the cost-effectiveness of these major capital actions.
Some state politicians are touting the results of an Ernst & Young study that purports to rank North Carolina’s business taxes as among the lowest in the nation. But this flawed study ignores basic principles of public-finance economics and most of the taxes that influence business decisions. More accurate studies that examine all relevant taxes and all types of businesses suggest that North Carolina’s tax rates are high in regional rankings, thus discouraging economic growth.
US road conditions worsened from 2001 to 2002, for the first time since the mid 1990’s, even though the federal government and the states substantially increased their dollars, according to the latest annual review of state road performance prepared by Professor David T. Hartgen at the University of North Carolina at Charlotte.
This study carefully reviews the growth of North Carolina’s 1551 Census tracts during the 1990s compared with the locations of major road improvements. Tract data on changes in population, demographics, prior density, and location are merged with detailed data on 312 major road projects completed during the 1990s, and the relationships between road investments and growth are determined for each of the 12 commuting regions.
State lawmakers are considering a proposed constitutional amendment to allow local governments to issue bonds without a public vote to construct convention centers, sports arenas, and other “economic development” projects. Careful research of these programs in other states reveals that they do not enhance a community’s economic growth over time. Moreover, they weaken governmental accountability to a voting public that does not favor subsidizing private businesses.
The North Carolina Senate is considering a budget plan for the 2003-05 biennium that would compound the House’s error in raising taxes in the midst of a slack economic recovery. While proponents of the plan claim that it would help families with children, the reality is that it would impose higher taxes on family purchases of such items as clothes, furniture, candy, soft drinks, and health insurance — in order to fund a $726 million increase in state spending, or 5.1 percent.
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