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State to counties: Share the Roads
Transportation funding reaches crossroads Since 1931, the county role in funding roads and transportation-related projects has largely been parked and left to collect dust. It may be time to pop the hood and see what needs fixing. The General Assembly has called, and the state’s system, running low on fuel – ahem, funds – needs a lift.
This summer, the General Assembly approved a bill (S1513) that allows counties to voluntarily participate in the financing of road building and maintenance. Roughly 150 local government officials from across the state attended an Association-sponsored seminar in Raleigh on Dec. 6 to learn more about the impact the legislation will have on counties down the road and also for a primer on the history of state transportation funding. County officials came armed with plenty of questions – namely what are counties “allowed” to do, and if counties enter the road business, will there be a revenue stream other than the property tax to help pay for it.
“If we are going to be forced by the state to provide services that the state is supposed to be providing, we are going to have to have additional sources of revenue,” said Durham County Commissioner Becky Heron, who added that in light of the failure of 15 local-option land transfer tax referendums across the state in November, counties need to be able to enact new revenue options by board resolution – rather than by public referendum. She asked the Legislature to “give us the authority to impose impact fees or whatever we need out there to meet the obligations [you] are putting on us now,” she said, drawing a hearty round of applause from attendees.
Susan Coward, the N.C. Department of Transportation’s deputy secretary for intergovernmental affairs and budget coordinator, explained that by participating in the financing of roadway improvements, counties could expedite or enhance planned projects, an idea that sat well with Gaston County Commissioner Joe Carpenter – provided that counties receive sources of revenue to help pay for those projects so that boards of commissioners are not forced to impose additional burdens on property taxpayers.
“We need a way for our people to address those issues of building roads,” he said. “We have cross-county boulevards and they don’t even have it on the radar. Right now those roads are getting crowded and at different hours almost impassable. “With a revenue source … we could help build ourselves out of those type situations.” Coward and Calvin Leggett, the DOT’s manager of environment, planning and local government affairs, were on hand to review the levels of participation counties are allowed under the new law. One thing made clear by the department officials is that county funding can only occur under agreement with the DOT and plans must conform to state standards. “You cannot just go out into our right-of-way and install whatever you want to,” Leggett said. Coward added that N.C. DOT does not envision turning over maintenance of secondary roads to counties. “It doesn’t mean that we are in any way expecting a hundred county DOTs to be part of our network in North Carolina,” she said. “This is an option – if you want something more enhanced than what we are providing today.” N.C. DOT has a 20-year history of working with municipalities on roads, according to officials, and the agency’s goal is to “create a level playing field” among local governments for transportation funding, Coward said. For now, the law allows counties to participate in at least two types of participation agreements, according to Leggett. The first is direct construction through an encroachment agreement with DOT. Under this arrangement, counties would acquire the right of way, and perform or contract for planning, design and construction of the road. DOT would review and approve or deny the plan, provide “some” oversight during construction, and finally assume maintenance of the road after it is built. Municipalities typically fund these arrangements through bonds, Leggett said. “I think that kind of arrangement could work very well with counties,” he said. Under the second type of agreement, counties would loan money to the DOT to expedite a future road project. DOT must re-pay the loan within seven years. A third type of agreement that Leggett is not sure if counties have current authority to do is a limited financial participation plan to add local enhancements to existing projects. These improvements could include adding sidewalks, making architectural upgrades to items such as noise walls, or upgrading utility lines. Share the roads: 25-year funding gap at $65 billion So what’s the driving force behind the push to get counties into the road business? The answer is simple, of course – money. A 2006 report by the DOT estimated the state’s 25-year construction and maintenance needs at $122 billion. Considering existing revenues are expected to bring the state just $57 billion to meet those needs, lawmakers and agency officials saw the need to pick up another partner for funding.
“I think it’s an understatement but the outlook is pretty dreary,” said NCACC Second Vice President Joe Bryan, who chairs the Wake County Board of Commissioners. “The state is showing a $65 billion shortfall. Our county alone is showing a $6 billion shortfall.” Once known as the “good roads state,” North Carolina now receives a “D” rating from national and state civil engineering societies. According to Lisa Hollowell of the General Assembly’s Fiscal Research Division, vehicle miles traveled in the state have increased 250 percent since 1970, allowing congestion and wear to take their toll on the state’s roadways. Construction inflation has doubled since 2002 as the cost of asphalt, steel and concrete has been driven skyward, while more fuel efficient vehicles have impacted revenues from the gas tax. As a result, “our dollars are buying less,” said Hollowell. State funding, meanwhile, is being routed toward strategic highway corridors. Seven percent of the state’s 79,000 miles of roadways carry 45 percent of traffic. In the three-tiered network established by the state’s 2004 long-range transportation plan, the statewide backlog is at $11 billion, with $36.7 billion in accruing expenses, in terms of 2005 dollars. Regional ($4 billion backlog, $7.2 billion in accruing expenses) and subregional ($15 billion backlog, $23.5 billion in accruing expenses) tier roadways are no longer priorities for the state. State looks to blue ribbon committee for solutions While DOT is pursuing several avenues to lessen the blow from the current fiscal crisis, a 21st Century Transportation Committee is taking a look at ways to improve transportation systems and finding innovative ways to fund transportation needs in the state, among other priorities.
Two county commissioners, Henderson County’s Chuck McGrady and Ashe County’s Richard Blackburn, are among the committee’s 24 members, and each addressed attendees during the summit. McGrady warned against taking a knee-jerk negative reaction to inclusion in transportation funding, and pointed out that he sees some positives in a county role, such as a needed ability for counties to link transportation and land-use planning. He also warned, however, that county property taxes have been targeted early as a potential new revenue source for projects. “There’s an assumption at least among some members of the 21st Century Transportation Committee that property taxes are way too low and that this would be a good way potentially to fund some of the transportation infrastructure,” McGrady said. “I think local option revenue sources are vital if we’re going to talk about any sort of county role in (transportation) infrastructure.” Attendees also heard presentations from Jack Basso of the American Association of State Highway and Transportation Officials, as well two municipal officials – City of Wilmington Councilwoman Laura Padgett and City of Greensboro Director of Transportation Jim Westmoreland – who shared their perspective on transportation funding. Follow the links below to view presentations from the event:
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