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Transportation Funding Solutions Go Nowhere in N.C.

Tue August 14, 2007 - Southeast Edition
Gary D. Robertson - ASSOCIATED PRESS

RALEIGH, N.C. (AP) For all the boasting among Democrats about how much the General Assembly accomplished this year, the issue discussed most in the session’s final days was something for which they had nothing to show.

Lawmakers went home without finding a way to cover the estimated shortfall in North Carolina’s transportation spending needs, projected to reach $65 billion over the next two decades by the Department of Transportation.

An argument can even be made that lawmakers made the situation worse by capping the gasoline tax for another two years, costing the state an estimated $140 million in revenues, and failing to set aside the seed money needed to start work on the state’s first toll road. Meanwhile, the cost of road-building materials continues to soar.

“Drivers in our state should be angry with the lack of action on transportation,” said Beau Mills of NC GO!, a coalition of local governments and road-building trade groups. “We all know we are falling behind, yet the Legislature chose to do nothing.”

The inactivity, along with the deadly collapse of an interstate bridge in Minnesota, has many talking about holding a special session on transportation issues. The high price tag of a fix, combined with the Legislature’s recent wrangling over taxes, suggests getting lawmakers to return to Raleigh will be the easy part.

Should they come back to Raleigh, a solution isn’t obvious. But some lawmakers think finding an answer to transportation woes is possible.

“I’m optimistic that it will happen,” said Sen. Clark Jenkins, D-Edgecombe, chairman of the Senate transportation appropriations subcommittee. But he was quick to add that without “buy-in from both chambers, both parties, I just don’t think we can even attempt to do it.”

When the just completed session began in January, local governments — including big cities that pay for road improvements within their boundaries — pleaded with legislators for additional revenue sources for infrastructure.

But Gov. Mike Easley’s budget proposal, released in late February, contained no method to cover the funding shortfall, in part so a commission reviewing North Carolina’s tax structure could meet and make recommendations.

A commission subcommittee recommended raising the existing 3 percent tax paid on automobile sales, and giving local governments the option to tax land transfers to help pay for road construction. But the full commission declined to back specific tax changes to help pay for transportation needs.

Meanwhile, automobile dealers mobilized to oppose boosting the sales tax, and talk of a transportation bond package never amounted to much. The Legislature ultimately focused on county Medicaid costs, along with school construction and other infrastructure needs.

“We didn’t have any consensus to make a big push on transportation funding in this session,” said House Speaker Joe Hackney, D-Orange. “We had plenty of other things on our plate.”

It’s also a politically dangerous topic. Raising the sales tax on vehicles to 4 percent would raise $200 million annually, but is sure to be widely unpopular. Lawmakers could boost motor vehicle fees, but they were raised across the board in 2005.

“It’s a huge issue, but that [special] session ... should only occur if we are prepared to do so and if there is a bipartisan effort in that regard,” said Senate leader Marc Basnight, D-Dare.

Hackney said he and Basnight have spoken with Easley’s office about having another high-level panel examine transportation funding issues before the Legislature reconvenes as scheduled next year.

“The governor has said we still need to do something more for transportation in North Carolina,” Easley spokeswoman Renee Hoffman said. “Rising highway construction costs mean we are going to have to look at different ways to fund our highway needs.”

GOP leaders also want to know more before deciding on the wisdom of a special session. In the minority in both the House and Senate, Republicans watched their arguments go nowhere when suggesting the state stop transferring $172 million annually from the Highway Trust Fund to its general fund. They also blame Democrats for not taking advantage of the $1.5 billion in revenue the state unexpectedly collected in the past year.

Given the extra revenues, “I just don’t think the public would be prepared for additional taxes and additional fees,” said Senate Republican Leader Phil Berger, R-Rockingham.

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