Annual Meeting Remarks

 

NC Go! Annual Meeting and Transportation Dinner
November 2, 2005
Remarks
Bill Carstarphen, co-chair

 

Transportation Investment in North Carolina:
Fueling the Jobs of Tomorrow

Thank you for joining us here this evening. I’m Bill Carstarphen, co-chair of NC Go! along with Larry Goode.

Four years ago, NC Go! set out on a mission: to reduce congestion on our state’s roadways. As the organization grew, so did the vision. In the course of our work, we’ve come to a greater realization of just how intertwined transportation is with the daily lives of all North Carolinians. The diverse membership of our organization reflects that, but in particular, I’m talking about how transportation infrastructure plays a critical role in our state’s economic wellbeing. That’s at the core of what I’d like to talk with you about tonight.

We’re proud of what we’ve accomplished over the years. We’ve pushed for action on improving project delivery and seen progress. We’ve played a key roll in legislation such as NC Moving Ahead and the Cash Management Bill. We’ve commissioned polls that tell us North Carolinians are taking transportation problems seriously and are prepared to support real leadership in finding solutions.

But while we’ve been successful in many of our endeavors, there are a few points on which we have been stymied year after year.

Chief among these are the continuing cash diversions from the North Carolina Highway Trust Fund. These have always been a chief concern of NC Go!. Our concern is, in fact, greater than ever in light of growing diversions and shrinking transportation resources. Once again, and for the 17th consecutive year, the North Carolina state budget was passed with hundreds of millions of dollars diverted from the Trust Fund. To date, more than $3.7 billion have been redirected to non-transportation purposes.

The consequences of these diversions are now apparent. Earlier this year, NCDOT put the public and policymakers on notice; the Department’s cash reserves have decreased to a dangerously low level. In conjunction with revenue shortfalls, this is causing significant delays on many projects. Some of these projects were already delayed and thus, given rising construction costs, will be that much more expensive to complete. Bidding on new projects has been pushed back for months. When these lettings do occur, they will be reduced by around 50 percent, threatening economic growth in our state.

The bottom line is this – taking money from the Trust Fund as a stopgap measure for non-transportation programs may seem to legislators at the time penny-wise, but it is pound foolish and it is a bad deal for every North Carolinian!

Later in the program, others will tell you about the role transportation played in bringing Dell – and many valuable jobs – to North Carolina. As economic developers will tell you, a quality transportation system is a key factor for industries considering bringing new facilities and jobs to the state. I’m sure the economic developers here tonight will back that up.

In that light, consider this – NCDOT estimates that, under the present revenue system, over the next 25 years, North Carolina will see more than $30 billion of needed projects go unfunded. In other words, we need to raise an additional $1.2 billion a year just to meet currently identified needs.

The words “currently identified” are important. Consider that over the last 30 years, the number of motorists on our highways has more than doubled – a pace with which transportation revenue has not kept up. Also consider that U.S. Census Bureau projections indicate that North Carolina’s population will grow by 4.2 million, or about 52 percent, in the next 30 years. We are simply not keeping up with growth.

That $1.2 billion per year sounds like a lot of money. And it is. But it’s nothing compared to the cost of a quarter-century of decreased quality of life, wasted resources and countless lost economic opportunities. Make no mistake – the price of failing to make tough decisions now will be high. Our economy is at risk.

I’ve told you about some things that are going wrong, but my goal tonight is not to be the voice of doom and gloom. Rather, NC Go! wants to use this opportunity to kick-start a long overdue dialogue on transportation solutions between policymakers, the public and transportation leaders.

Tonight, I’d like to identify several options for getting transportation in this state back on the right track.

It bears repeating that our top priority is eliminating diversions from the state Highway Trust Fund, or at the very least, phasing them out. Beyond fiscal considerations, it is also a question of restoring the public’s trust. Those who unwisely might oppose taking decisive steps on transportation issues need only to point to Trust Fund diversions as a poster child of fiscal irresponsibility. Until we get that house in order, we cannot expect the public to be willing to support additional funding mechanisms. All options to achieve this goal should be on the table. Among them should be a constitutional amendment to preserve the integrity of transportation funding, ensuring that those funds will be used as intended for transportation.

Local option financing is another key element and should be considered an integral component of overall transportation funding. On October 11th, Raleigh voters passed a measure to issue $60 million in bonds to fund local road improvements and traffic control measures. This is a good example of the increased role localities will have to play in addressing their unique transportation needs. Options to modestly increase local sales taxes with the revenue designated for local transportation projects should be considered.

On a more ambitious level, the state should consider promoting a comprehensive statewide infrastructure bond issue, including financing for projects such as water and sewer improvements in addition to transportation needs.

You have seen a great deal in the news lately about the gas tax. Let me make one thing very clear – we must preserve our gas tax. NC Go! has opposed efforts to cap or reduce motor fuel taxes in the past and will vigorously continue to do so. It is critical that those of you who are policymakers join us in this effort. North Carolina’s gas tax is the primary source of funds for all maintenance of our existing roads. And, it is the primary source of funds for public transportation. Reducing that revenue would set us back years and result only in a greater backlog of unmet needs. With a $30 billion gap between needs and expected revenue over the next 25 years, now is not the time to undermine the state’s mobility.

Part of the effort we must undertake is educating the public on reality versus perception. NC Go! will take on this challenge head first. Taxpayers can be forgiven for thinking that increases in the gas tax have been a windfall for state government or NCDOT. On its face, that is an understandable, if false, assertion. The reality is that while revenue from the gas tax has indeed increased, outlays for construction, fuel and other costs have increased at a far greater rate. The result has been a net reduction in transportation investment.

Toll roads increasingly look as if they will be a reality in North Carolina in the near future. The N.C. Turnpike Authority has taken a key step forward by identifying candidate toll road projects across the state. We applaud this effort and ask that it be viewed as a first step. We hope that the list of candidate projects will continue to expand, perhaps encompassing existing roads, such as I-95, that require repair and capacity expansion. These projects should be comprehensively planned, designed, scheduled and executed.

There also seems to be the perception among some that toll roads would spark a massive public outcry. We think that is a false perception. Our transportation poll, conducted last year, showed that statewide, a majority were in favor of establishing toll roads if the revenues would benefit transportation. North Carolinians acknowledge there is a problem and they acknowledge the money must come from somewhere.

It is also important that we not forget about rural roads. Earlier this year, The Road Information Program (TRIP) – a well respected national transportation think tank – released a report listing North Carolina’s rural highways as among the deadliest in the nation. In the “Good Roads State”, it is simply not acceptable to have the fourth highest rate of fatalities on rural roads in the nation. We must find the additional funding resources necessary to allow NCDOT to make the necessary safety improvements in road design, lane markings, signage and safety features such as safe shoulders and guardrails.

We must also continue to examine and improve management practices at NCDOT. As I mentioned before, serious progress has been made in project delivery. However, much work remains to be done. We urge the General Assembly, Governor Easley, leaders at NCDOT and other policymakers to continue to push for improvements. One specific area in need of improvement is the environmental permitting process. Delays caused by inefficiencies in this process are a chief cause of increases in project costs. Also, the bureaucracy in the department should be streamlined. Redundant positions, unnecessary reviews and duplicate tasks should be eliminated for efficiency and cost-effectiveness. Why not set as a “stretch objective”, within the NCDOT, to revise current design practices and construction processes such that, without compromising safety, construction cost could be reduced by ten percent.

NC Go! doesn’t intend to just talk the talk without walking the walk. As such, we make this pledge to you tonight. If you will stand up and fight for the future of transportation and the economic prosperity of all North Carolinians, we will stand with you. We are prepared to continue and to increase our efforts to promote the dialogue on transportation through education of the public, opinion polling and more. We are backed by our 130 member businesses and institutions, representing 1 million North Carolinians across our state. We believe now is the time to make a difference by getting educated and getting involved. I encourage you, in partnership with NC Go!, to do so!

Thank you for your presence here tonight and for caring about the future of North Carolina.