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April 18, 2013

McCrory outlines new strategy for transportation spending

North Carolina will build better transportation projects and create more jobs if it scraps an outmoded formula that was created in 1989 to sprinkle road-building money among different regions of the state, Gov. Pat McCrory said Thursday.

North Carolina will build better transportation projects and create more jobs if it scraps an outmoded formula that was created in 1989 to sprinkle road-building money among different regions of the state, Gov. Pat McCrory said Thursday.

His proposed “Strategic Mobility Fund” would still distribute money regionally while carving out a 40 percent share – worth $6.4 billion over the next decade – to tackle traffic congestion and big transportation needs at a statewide level.

“The problem is, right now we do not have a long-term, strategic transportation policy to connect our strong economic regions – to give us the most bang for the limited dollars we have available,” McCrory told political and business leaders gathered at the N.C. Museum of History. “And this is a gap we’re trying to close.”

Transportation Secretary Tony Tata said transportation tax revenues will fall by $1.7 billion over the next decade because better fuel efficiency will continue to cut gas tax collections even though North Carolina’s population will grow by 1.3 million people. But McCrory and Tata did not propose new taxes or other sources for transportation money.

Citing the Department of Transportation’s current plan for 175 road projects over the next 10 years, Tata said DOT could pay for an additional 85 projects and create 65,000 more jobs – just by “using existing funds in a more efficient way.” The key is new efficiencies in operation and maintenance spending, he said, along with a data-driven approach to choose the most beneficial construction projects.

McCrory and Tata said they could not identify new projects that would be built under the proposed new formula. They did not explain existing inefficiencies or old DOT projects that should not have been built.

The Republican governor’s pledge to do more with less – without asking for new taxes – won enthusiastic endorsements from Senate and House leaders.

“There’s no state in the Southeast that’s going to be able to beat us,” said House Speaker Thom Tillis, a Republican from Mecklenburg County. “We’ve got a plan that virtually doubles the investment over 10 years. It gets the money to projects where it is needed most.”

Tata said he wanted to redirect about $120 million a year from secondary road maintenance to spend on new capital projects. That might run counter to a recent trend by Republican legislative leaders, who have steered more money to maintenance.

The change would require legislation. Sen. Neal Hunt, a Wake County Republican, wanted more details but liked what he heard.

“It’s basically reforming the old Equity Formula to direct money, based on the data, to relieve congestion and to accomplish the economic efforts we’re trying to achieve,” Hunt said. “The key point is being data-driven, to get the politics out of it.”

A 24-year-old formula

The Equity Formula was established in 1989 by former Gov. Jim Martin, a Republican, and a legislature then controlled by Democrats. It was part of a broad compromise that included new plans to pave dirt roads, build urban loops and extend a network of four-lane highways across the state.

The formula steers extra money to more populous areas – but not enough, urban leaders complain, to unclog big-city traffic jams. Regional leaders spend their share of equity funds to address local priorities but rarely agree on bigger statewide needs.

So DOT offered an unpopular toll plan as its only option for widening and upgrading Interstate 95. Wake County leaders agreed to toll collection so they wouldn’t have to wait decades to finish the 540 Outer Loop.

Former Gov. Bev Perdue had to create a new Mobility Fund to get money to replace an old, narrow bridge over the Yadkin River on Interstate 85. Under the old funding formula, this project competed with pressing local needs in nearby Greensboro and Winston-Salem.

Jake F. Alexander III of Salisbury served as a deputy transportation secretary when the Highway Trust Fund and the Equity Formula were created in 1989. He welcomed McCrory’s plan to scrap the old formula.

“It’s a wonderful idea whose time has come,” said Alexander, a McCrory appointee to the state Board of Transportation. “This really is an almost Solomon-like division of revenues that I think is appealing. ... Now, the right projects will be built when they need to be built.”

The N.C. Chamber of Commerce, a statewide business lobby, praised McCrory for his promise to match transportation and infrastructure improvements to the state’s economic needs. But Gary Salamido, a chamber vice president, said the state will need to strengthen its “unreliable and unsustainable revenue stream” to keep up with its transportation needs.

But McCrory said that before he asks for new tax dollars, he will show that DOT can get more out of the money it spends now.

“We’ve been thinking too much in a small-project mentality,” McCrory said. “You can see that in our roads across the state, where roads go from one lane to four lanes and back to one lane, and there’s no connectivity. ...You can tell many decisions have not been made based upon strategic thought of looking at economic development, congestion, safety and jobs, and that’s what we’re doing now.”

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