The "rest of the story" on roads

by Tom Campbell, Executive Producer and Moderator, NC SPIN, February 12, 2015.

“You know what the news is,” the late Paul Harvey said. “Now you’re going to hear the rest of the story.” It’s not news that North Carolina has huge transportation needs. Leaders have been telling us for more than a decade. We want the rest of the story, specifically how are we going to pay for them.

To his credit, Governor Pat McCrory uncoupled the funding formula that previously allocated money geographically instead of according to traffic counts and other data. Last fall, he announced a 25-year plan for new roads, listing specific projects to be undertaken. In his recent State of the State speech McCrory proposed a billion dollar road bond package. But he didn’t tell us how he proposed to pay off the bonds.

North Carolina’s gas tax, the principle source of revenue, won’t pay the bills. This failed solution of the 1980’s, never worked as envisioned. For starters, lawmakers transfer almost $200 million per year to the state’s General Fund. Our gas taxes became the highest in the Southeast, so legislators yielded to public outcries and put a cap on the tax, further restricting its ability to fund road projects.

Now the Senate is proposing a thinly veiled ruse. Billed as a tax cut it is really a tax increase. It initially cuts the current tax by 2.5 cents per gallon, but establishes a minimum of 35 cents a gallon while removing the current cap. With the recent plummet of gas prices, our gas tax could drop to as low as 30 cents a gallon using current formulas. But the formula would change under the new legislation, raising the tax to an estimated 41 cents a gallon by 2019. But despite what lawmakers might want to believe the gas tax won’t provide the revenues we need.

No road fairies are going to come and magically build and maintain our roads. It’s a time for truth telling.

North Carolina has one of the largest networks of state maintained roads in the nation; most states relegate to local governments the responsibility to build and maintain roads within their jurisdictions and those local governments impose additional taxes and fees. Since our state is going to be responsible, comparing our state’s gas tax with most others isn’t an apples-to-apples comparison.

We’ve cussed and discussed funding options ad nauseam. We will likely continue to impose sales and excise taxes on cars and tires. We even like the notion of charging residents for the number of miles they drive each year. But these funding mechanisms exclude contributions from the thousands of tourists who travel through our state every year.

On a recent trip to Florida we marveled at their great throughways. Yes, we were irritated at having to stop every few miles to drop quarters into tollbooths. Florida residents, however, obtain a “Sunpass” and pay lower toll rates.

Those who use our roads should pay for them so the obvious conclusion is that along with some combination of sales and excise taxes we must lean heavily on tolls.

If properly and positively explained we believe that voters will pass a road bond referendum. And that is the rest of the story.