Road to ruin: N.C. can't keep pace with troubling list of transportation needs

It’s a staggering total — $3.4 billion.

That’s how much bad roads and congestion in North Carolina costs drivers in higher vehicle ownership costs, according to a report commissioned by the N.C. Department of Transportation.

Fixing those roads — as well as repairing and replacing bridges, building new highways and any other large projects the agency has on its schedule — takes money. Lots of it.

Department spokesman Steve Abbott said that to bring every bridge in the state to “good” condition would cost $3.8 billion — roughly 71% of the department’s $5.3 billion budget for the year.

“As of now, that’s money we don’t have,” Abbott said.

The lack of funds has caused a backlog of infrastructure projects, many of which won’t be addressed for years.

“We have our wish list,” Abbott said.

So a combination of different stakeholders are coming together to try changing the funding for NCDOT.

“How do we reform this for the long term, so that we don’t have to come back every year and advocate for the projects that are being backlogged or the maintenance that’s being deferred?” said Mark Coggins, director of government affairs for the N.C. Chamber of Commerce.

The problem, as groups like the N.C. Chamber see it, is that the largest source of NCDOT’s budget comes from the motor fuel tax — 36.1 cents per gallon — and accounts for 54% of the agency’s total revenue. As inflation grows and cars get more fuel efficient, the comparative purchasing power of that tax gets smaller and smaller.

The result is that drivers who pay less for gasoline aren’t chipping in money to the Highway Fund comparable to the damage their vehicles cause the roads.

An organization called the NC FIRST Commission was created in 2019 charged with evaluating the state’s transportation investment needs. Its January report called for a shift in funding for NCDOT, away from the gas tax and toward something more equitable and sustainable, along with a $20 billion increase in funding for the department over the next 10 years.

The COVID-19 pandemic has underscored the necessity of finding a source of funding less reliant on the gas tax. As vehicle travel dropped by 38% in April 2020, the money going into the Highway Fund cratered, causing NCDOT to delay or remove approximately 700 projects.

The pandemic also exacerbated a trend of increasing e-commerce deliveries from companies like Amazon. Freight trucks used for shipping can cause the equivalent damage to roads and highways as 5,000 cars, while also increasing congestion in urban areas.

Driving, and the department’s funding, have since rebounded to close to prepandemic levels, but Abbott said the massive drop in funding made it clear why it’s so important to have a more sustainable source of revenue.

The proposed solutions to funding include short-term options such as increasing the highway use tax — the tax on purchasing vehicles that is now 3% — putting more sales tax money earned from transportation goods into the highway fund and bumping up the DMV fees on electric vehicles. Long-term solutions include implementing a mileage-based user fee for drivers and more highway tolls.

The business groups advocating for change say that having a well-funded transportation department and good infrastructure will be a key advantage to bringing economic growth to the state.

“Transportation is a competitive advantage for us because our congestion numbers — and not just during the pandemic — consistently ranked far below what we would normally be for a market of our size and growth rate,” said Joe Milazzo, the executive director of the Raleigh-based Regional Transportation Alliance.

The state is unique for the number of roads overseen. Despite only being the 10th most populated state, North Carolina has the second most state-managed roadways, some 80,000 miles. That means while North Carolina spends a large percentage of its total expenditures on transportation — about 13.3% — it’s actually spending far less money per mile of state-owned roadway than comparable states like Florida and Georgia.

The high base numbers already spent on transportation means that it may be difficult to funnel even more money into the system, despite calls for more.

“There’s competing priorities for the funding, particularly as we’re starting to pay for things out of the general fund,” said Noreen McDonald, a professor of city and regional planning at UNC-Chapel Hill.

North Carolina may get a boost to its transportation network in the near future, thanks to President Joe Biden’s $2 trillion infrastructure proposal, which would allocate $621 billion to spending on transportation infrastructure, including $115 billion for repairs and modernization. NCDOT has already identified 10 federal aid projects which are planned to be underway in the next several years.

But given that the final amount North Carolina will receive is dependent on Congress, Abbott said the department won’t be making any plans around a large influx of federal aid for the foreseeable future.

“Who knows when it’s going to come out,” Abbott said.

The fear among NCDOT and business advocacy groups is that, as construction costs rise and funding from the fuel tax starts to dwindle, North Carolina might not have the resources to stay in front of the need for major full-scale renovations. Coggins cited a statistic on a report that found that every $1 of deferred maintenance on roads and bridges will end up costing an additional $4 to $5 in needed future repairs, meaning needs delayed because of a lack of funds will only get increasingly more pressing and expensive with time.

“I don’t know that we truly know the economic impact or the consequences of inaction,” Coggins said.