Transportation reform was not at the top of the Legislature’s list this session. Instead, lawmakers introduced legislation that included new local tax options to finance public transportation, unnecessary pavement construction and light rail expansion. Disappointingly, the goals of the nearly 20-year-old Highway Trust Fund continue to be unmet — instead nearly 60 percent of the outer beltway projects remain un-built and large cities continue to fight over highway loops.
What they did:
SB 200 – Increase the State Gas Tax
Sponsored by Senator Clark Jenkins (D – Edgecombe), this bill increases North Carolina’s gas tax by $50 million. The bill imposes a floor (or minimum) for the tax consumers pay at the pump. North Carolina’s gas tax is calculated, in part, by a variable rate based on the price of gas. In short, as the price of gas rises or falls, so too does the state gas tax.
SB 200 ensures that the gas tax will not fall below 29.9 cents per gallon for the period from July 1, 2009 to June 30, 2011 – even if gas prices fall to a point that would otherwise permit the gas tax to drop below that amount.
The bill reverses a 2008 law that capped the state gas tax at 29.9 cents per gallon. What was the maximum allowable gas tax has become the minimum rate.
According to state budget office estimates, the result will be consumers paying $50 million more in gas taxes for FY 2009-10 than they would have without the tax floor.
HB 1005– DOT Participation in Fixed Rail Projects
Introduced by Rep. Becky Carney (D-Mecklenburg) and Rep. Nelson Cole (D – Rockingham), this bill will allow the Department of Transportation to fund fixed rail projects that do not include federal funds. Effective July 1, 2009, the act also uses state funds to pay the administrative costs incurred by the DOT’s participation in each such project.
HB 148 – Congestion Relief and Intermodal Transport Fund
Sponsored by Representatives Becky Carney (D-Mecklenburg), Lucy Allen (D – Franklin), Deborah Ross (D – Wake) and Bill McGee (R – Forsyth), this bill will create a Congestion Relief and Intermodal Transportation 21st Century Fund. The fund will give money to local governments and transportation authorities for public transportation purposes, including a light rail system in the Triangle and Triad areas. The bill allows six urban counties to levy (upon voter approval) a ½ cent sales tax increase and a ¼ cent sales tax in all other counties to finance the fund.
The fund’s purpose is to provide congestion relief by building a light rail system; however, it is actually a massive tax increase that will have little to no impact on reducing congestion. The Triangle Transit Authority estimates light rail ridership numbers to equal roughly 2 percent of the current Triangle population. The reality; HB 148 will relieve less than 1 percent of congestion but raise taxes to subsidize the commute of urban workers.
What is more, the funds collected will be used exclusively for mass transit, and will not be allowed for use in road construction or repair. A recent study conducted by the North Carolina Section of the American Society of Civil Engineers (ASCE) concluded that North Carolina’s roads are a “D” grade and require $60 billion in infrastructure improvements. This bill does nothing to solve that problem and instead increases taxes and spends money on a light rail that will be used by a tiny fraction of commuters.
What they still have not done:
Reform the Department of Transportation
North Carolina currently maintains a 19-member, politically appointed Board of Transportation. According to a study released in 2007 and authored by McKinsey & Co., the N.C. Department of Transportation is inefficient, unfocused and inflexible. Despite the findings of the $2.5 million study, the DOT has yet to introduce real reform and continues to be unproductive and wasteful. If North Carolina is to return to the “good roads state” of the 1930s, serious reforms should be implemented now. Reforms should start by reducing the board size and replacing the district system with at-large appointments based on appropriate areas of expertise. Political fundraising by board members should be banned and ethics requirements strengthened, specifically relating to conflicts of interest based on board members and their home districts.
Replace the Equity Formula
In 1989 the General Assembly created the Equity Formula to require that State Transportation Improvement Project (STIP) funds be distributed equally throughout the state. STIP finances over 2,000 transportation projects totaling about $13 billion, including funding for the state’s highway, public transportation, aviation and Governor’s Highway Safety programs. Today, the Equity Formula distributes transportation funds with little objectivity and disproportionately across the state. The result; unnecessary roads built in areas losing vehicles, while those gaining vehicles are left with more potholes and traffic jams. The solution is to establish an objective, transparent system to prioritize transportation spending where project selection is decided on performance-based criteria and not on the inconsistent Equity Formula.