A Joint Statement from Representative Paul Stam and Senator Phil Berger

August 28, 2007

This year, General Assembly appropriations for transportation were virtually the same as last year. The total: not enough to meet needs; in fact, the Department of Transportation estimates that unmet state transportation needs will continue to grow. It is obvious to anyone, from daily commuters to school bus drivers, traveling on North Carolina's roads that we are no longer the "Good Roads State" and are falling further behind in road construction and maintenance.  The problems in transportation are serious and getting worse every day.   In November 2006 the American Society of Civil Engineers gave North Carolina a “D” on the condition of its roads and a “C-” on bridges.  Similar studies give North Carolina poor marks on a wide range of infrastructure measures.

Lack of money dedicated to roads is exacerbated by the “equity formula” which fails to allocate any funds based on congestion, a growing problem in our urban areas. The long history of the Easley administration and legislative Democrats of taking road money from transportation to fund other priorities is well known. In addition to an annual $172 million statutory shift of money from roads to the general fund, the Governor and other Democrats have approved an additional $400 million (net) in raids of transportation dollars over the last seven years.  Let’s pick up the story in 2007.

2007

In his State of the State Address on February 19, 2007 Gov. Easley spoke at length to a Joint Session of the state House and Senate; he failed to mention transportation.  On February 22, he submitted his proposed budget and spending priorities which included not one extra dollar for transportation.  The state’s most serious infrastructure and capital construction challenge merited no mention and no funding from the state's Democrat governor. 

On March 14, 2007, House Democrats held a press conference to present their agenda for the session entitled “A Plan for One North Carolina”.  In six pages of single space rhetoric there is no mention of transportation, not even a whisper.  There is a great deal about additional social spending, but nothing for critical road needs.

House Democrats passed their proposed budget on May 11, 2007.  In that budget, Democrats stated their “intent” to phase out the annual transfer of $172 million from the Highway Fund to the General Fund beginning in 2009 – a "promise" left to the legislature elected next year.  The Senate passed its budget proposal on May 31, 2007.  Neither proposed legislative budget allocated any additional dollars for transportation.  The Senate plan spent $300 million less than the House, leaving room for transportation needs to be addressed.

On June 6 the Budget went to “conference,” to settle differences between the House and Senate. Budget conferees were primarily Democrats and all significant decisions were made in secret by Democrat leaders.

On June 14 Republicans released a proposed alternative budget plan which spent less money than either the House or Senate plans and called for across the board tax reductions.

On June 26 Republican leaders Senator Phil Berger (R-Rockingham) and Representative Paul Stam (R-Wake), followed their June 14 alternate budget with proposals for addressing infrastructure needs, especially roads.  Majority Democrats responded with silence.

Republicans demonstrated at that time that $1.25 billion in bonds, if approved by the people, could be issued and serviced without a tax or fee increase through phase-out of the $172 million Highway Trust Fund transfer.

On July 27, 2007, the Democrats' 298 page Budget Conference Report was released with votes set for the next day. The budget Conference Report spent $400 million more than either previous House or Senate plans (actually $700 million more than the Senate proposal). While this violated House Rules, it did not deter legislative Democrats from approving the additional spending. Significantly, even with $400 million added by a handful of powerful Democrat conferees, not one extra penny was allocated for transportation. Indeed, the final budget actually cut $41 million from the overall transportation budget. 

Now after public outcry about the Democrats' failure to address the state's transportation problems we see a belated attempt at damage control with press releases and announced meetings among the very same Democrats who ignored the issue over the eight month legislative session.  Curiously, Democrat leaders of the House Transportation Committees, Rep. Nelson Cole (D-Rockingham) and Rep. Becky Carney (D-Mecklenburg) are complaining about the lack of transportation funding.  And the Governor now meets with the House Speaker and the Senate President Pro Tem to talk about transportation.

Proposal

Here’s a proposal for the Governor. Call a Special Session of the General Assembly for September to adopt the following plan:

1. Reopen the recently adopted Budget;
2. Allocate $60 million of the more than $200 million being carried forward for the first year of a four year phase out of the Highway Trust Fund Transfer and to provide approximately $20 million to address gap funding needs in urban areas;
3. The Governor has demonstrated his ability in the past to implement management and negative reserves of 1%, 2%, 3% and even more. Set a 1.5% target for savings in the recently passed budget, and give the Governor the authority to implement those savings.  Is there anyone that thinks state government is operating at anywhere near 100 percent efficiency? Does anyone think that a 1.5 percent savings cannot be attained? This would actually only reduce the rate of the increase in spending from 9.5% to 8.0% - which is still double the rate of population and inflation growth combined (4%) and will free up $300+ million to be appropriated to real transportation problems with congestion and safety immediately.  The savings could actually be recurring and provide ongoing funds for bonds or other transportation needs;
4. Place a referendum on the ballot for this November for the issuance of at least $1.5 Billion in Road Bonds, with the bonds to be paid for with the money retained in the Highway Trust Fund by discontinuing the transfer or from the savings realized by the Governor's efforts; and
5. Address the equity formula problem by taking congestion and road miles traveled into account; doing so will target additional dollars to critically needed roads and bridges.

        All of the above can be accomplished without any tax or fee increases.  This will not instantly solve the mess we have in transportation (it took years of neglect to get us here), but it will start us on the process and will provide a needed immediate shot in the arm for our crumbling transportation infrastructure.  With this start we can begin to rebuild our road system and help protect and grow our state's economy.