North Carolina is adding approximately 200,000 residents a year and the forecast is that North Carolina's population will double by 2030, making our state the 7th most populous state in the nation. This growth presents great opportunity and great challenges, particularly to our state's aging transportation infrastructure. On our current course, by 2030 Charlotte will become present-day Los Angeles and Raleigh will become present-day Baltimore in terms of transportation congestion.
North Carolina has already earned the unfortunate designation as having the 4th worst urban congestion in the nation. We must act aggressively and decisively to change our philosophical and funding approaches to meet our growing transportation needs. Staying the course is not an option. Our solutions will require new thinking and new revenue.
N.C. needs billions of dollars
To meet current needs and to prepare North Carolina for 2030, an investment of over $64 billion is required to plan, design, build and maintain all aspects of our transportation systems. Meeting this daunting challenge is essential for North Carolina to continue its economic vitality and to protect and improve our quality of life.
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The 21st Century Transportation Committee is beginning the final phase of its work in crafting a set of recommendations for the next governor and General Assembly to consider that will put North Carolina on a path to address transportation needs. The committee will focus on recommendations that will identify enhanced and new revenue sources to bring badly needed resources for short term solutions (over the next 10 years). Additionally, the committee will consider Department of Transportation reformation, land use planning and environmental permitting efficiencies, current funding allocations and strategies to increase North Carolina's share of federal transportation dollars.
The committee proposed an aggressive plan to the short session of the General Assembly that, if enacted, would have created a $12 billion fund for eligible cities to access for mass transit planning and development. Light rail, improved and expanded bus service, and cycle and pedestrian-friendly road and greenway systems must become a viable part of the transportation infrastructure solution in North Carolina. This fund will accelerate and facilitate that development. We will renew this recommendation for consideration next year.
A reality that we must all face is that the primary sources of our transportation funding is and will continue to decrease at a time when growth, construction inflation, and maintenance of current transportation system demands more money than we currently have. Inflation alone has doubled the cost of building roads and bridges since 2002 and there is no indication that transportation construction will become cheaper in the future.
Tax revenues on fuel and car sales provide over 80 percent of the $3.9 billion DOT budget. However, in the fiscal year that ended June 30, DOT took in $66 million less than last year despite continued population growth. This is not a new trend. Fuel tax revenue has essentially been flat over the last five years and in fact has declined in recent months. Projections are that revenue from these sources will continue to decline in the future.
Fuel tax won't meet N.C. needs
As we work to achieve the laudable goals of more fuel efficient vehicles, the expansion of mass transit and land development that enables people to be less dependent on their cars, the primary revenue source upon which North Carolina depends to maintain and build transportation infrastructure is and will continue to decline. The good news is we are consuming less fuel, notwithstanding the fact that as we North Carolinians travel more now than we did 10 years ago. The bad news is that continuing this pattern will bankrupt our ability to do the very things that North Carolina must do to address current transportation needs and properly plan for the future.
While we wrestle with solutions to address immediate needs, the more important question is how will we pay for transportation in the future? North Carolina has had a “user-pays” approach since 1921. The measure of “use” has been how much fuel a driver burns, so taxes are based on consumption.
As technology makes it possible to consume less fuel yet travel farther, the traditional way we calculate “use” is no longer accurate or effective. Therefore, if North Carolina remains committed to a “user pays” model for transportation revenue, a new way to measure “use” must be identified.
Challenge for elected leaders
Tolling is one method that is consistent with the user-pays approach. Technologies are being developed to measure vehicle miles traveled that will permit assessments based on the number of miles a vehicle travels. This too is consistent with a user-pays philosophy. These and other alternatives must be considered.
As we discuss how to pay for transportation in North Carolina, incremental solutions like stopping the transfer from the Highway Trust Fund ($172 million) and increasing traditional fees that are used for transportation will certainly be considered. However, the question that our elected leaders must address is how we will finance a plan to prepare North Carolina for 2030 and beyond when the current funding model is broken and inadequate.
If we do not begin to answer that question in 2009, we will certainly reap the consequence of our shortsightedness to the detriment of our children and grandchildren, and the economic vitality of our state.