This year General Assembly appropriations for transportation were virtually the same as last year. The total: not enough to meet needs; the Department of Transportation estimates that unmet state transportation needs will continue to grow.  It is obvious to anyone, from daily commuters in our urban centers to school bus drivers crossing rural bridges, that North Carolina is no longer the "Good Roads State" and we continue to fall further behind in road and bridge construction and maintenance.  Transportation problems 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. 

Mismanagement and misallocation of tax money collected for 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 taking road money from transportation to fund other priorities is well known. In addition to an annual $172 million statutory shift of road taxes to the general fund, an additional $400 million (net) in raids of transportation dollars over the last seven years have taken place.  Let’s pick up the story in 2007 which can best be described as continuing neglect:

In his State of the State Address on February 19, 2007, Governor Easley 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.

The House passed its proposed budget on May 11, 2007.  That document stated the “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 to be elected next year.  The Senate passed its budget on May 31, 2007.  Neither the House nor the Senate proposed budget allocated any additional dollars for transportation.  On June 6, the Budget went to “conference,” to settle differences between the House and Senate.

On July 27, 2007, the Budget Conference Report was released.  The budget Conference Report spent $400 million more than the House plan and $700 million more than the Senate budget.  Significantly, even with that additional total spending, not one extra penny was allocated by the conferees for transportation.  Indeed, the final budget actually cut $41 million from the overall transportation budget. 

It is time to end this neglect.  Here’s a proposal for the 21st Century Transportation Committee:

1.         Propose issuance of at least $2.0 billion in road bonds, the bonds to be paid with money retained in the Highway Trust Fund by discontinuing the $172 million annual transfer from the Highway Trust Fund to the General Fund;  the money from the bonds to be dedicated to congestion relief and bridge safety;

2.         Propose modification of the equity formula to take congestion and road miles traveled into account; doing so will target additional dollars to critically needed roads and bridges.  In addition require projects to be prioritized and constructed on a statewide basis accounting for congestion and safety;

3.         The Governor has demonstrated that savings can be realized in the General Fund Budget of 1 percent, 2 percent, 3 percent and even more.  Set a 1.5 percent target for savings in the recently passed General Fund budget.  Savings at that level would actually only reduce the rate of the increase in spending from 9.5 percent to 8.0 percent - which is still double the rate of population and inflation growth combined (4 percent) and will free up $300+ million to be appropriated to transportation priorities immediately.  The savings could actually be recurring and provide ongoing funds for bonds or other transportation needs;

4.         Propose that a substantial portion of the more than $200 million being carried forward in the General Fund Budget be used to provide money to address gap funding needs in urban areas;

5.         Implement the recommendations from the McKinsey study and provide regular public progress reports with opportunities for questions and suggestions from the public and press.

All of the above can be accomplished without any tax or fee increases.  This will not instantly solve the mess we have in transportation, 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.  The recently released McKinsey report confirms inefficiencies within our transportation system and demonstrates the dire need North Carolina has for serious change.  If these steps are taken immediately, this will be a strong signal that the Committee is engaged in serious work.  

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