Policy Recommendations

NC Go! supports several short- and long-term solutions to address declining revenue.

In July 2015, the variable rate gas tax will adjust based on the end-of-year wholesale 2014 price of gas. This could result in a decrease of 6-8 cent/gallon at the pump and a $300-400 MILLION loss in revenue. To avoid this near term catastrophe, NC Go! recommends:

  • Proactively LOWER and set a floor for the motor fuels tax
  • End transfers of transportation revenue to the General Fund
  • Adjust the Highway Use Tax by 1% or on par with surrounding states
  • Increase DMV/License and registration fees

To address long-term funding needs and a projected $60 Billion funding gap, NC Go! urges the leaders to consider a range of options which could result in approximately $126 Billion in New Revenue by 2040, to include:

  • Auto insurance surcharge
  • Tax on auto parts
  • Adjust weight-based fees for commercial vehicles
  • Expanded interstate tolling
  • User-based mileage fees

Background

There is an estimated $60 billion shortfall in funding required by 2040 to adequately plan, design, build and maintain our state’s transportation system. In order to improve mobility, increase safety, and attract and retain businesses that create jobs, now is the time to look to the future and decide what sort of transportation system we want to show the nation and world.

Support a healthy business climate with a sound transportation system. To compete in today’s economy businesses demand a safe, accessible and efficient transportation and logistics system. Annually, $364 billion in goods are shipped from North Carolina and $337 billion in goods are shipped to North Carolina, mostly by truck. Our transportation system should not be a barrier to recruiting and retaining businesses that create jobs.

Preserve existing funding sources until alternatives are in place. The motor fuels tax (gas tax) is our state’s most important source of highway revenue. It makes up more than half of state funds and is based on a formula that adjusts with the wholesale price of gas. Motorists are willing to pay for good roads as long as that money is used as intended. Funds raised from transportation sources should not be diverted to non-transportation sources.

Explore alternative funding sources. The gas tax and existing fees cannot keep pace with the population growth and increased demands placed on our transportation system. And with more hybrid vehicles and electric cars now in production, the gas tax is becoming a less-accurate measure of a driver’s use of the roads. State leaders need to embrace alternatives for financing our transportation system. In the meantime, consider adjusting fees to factor in heavier vehicles’ impact on roads.

Reduce congestion and improve mobility with additional transit options. Roads and bridges alone will not meet the mobility needs of North Carolina. Public transportation like buses and Charlotte’s LYNX Blue Line light rail get workers to jobs, ease congestion and move cars off the road to accommodate business vehicles.

Utilize alternative financing when possible. Toll roads are one of the most accurate forms of a “user-pays” system — where drivers support maintaining the miles they drive. Toll financing and Public Private Partnerships (PPP) are some of our best options for completing major urban projects that ease congestion years earlier than with traditional financing strategies.