Local News

Easley Wants To Use Bond Money For Road Improvements

Posted February 19, 2003

— Gov. Mike Easley urged legislators Wednesday to approve a plan that would allow $700 million in previously approved road bonds to be used for existing road improvements.

The proposal would shift money from North Carolina's Highway Trust Fund, which was set up in 1989 to build urban loops, widen two-lane highways and pave rural dirt roads, to road improvements.

Those improvements would include resurfacing, adding turn lanes on rural road intersections, widening paved shoulders and replacing bridges. The money would also be used for public transportation, including regional rail and urban transit systems.

Easley said the plan, which he calls "N.C. Moving Ahead," is needed so that highway tax revenues can be used where they are needed most: to upgrade long neglected two-lane roads that need repair.

The road projects, to be completed over a two-year period, could have an economic impact of $4 billion, he said.

"What these investments will do for transportation around North Carolina is amazing, but what N.C. Moving Ahead will do for our economy is just phenomenal," Easley said. "All these improvements mean that people, goods and dollars will flow more efficiently in North Carolina."

Already, bills have been filed in the state House and Senate that would allow the bond money to be shifted from the Highway Trust Fund to the road improvement projects.

Easley said he believed both Republicans and Democrats will support the move.

"The carrot is simple for lawmakers. That is, you have a transportation system in North Carolina that is outdated and do you want to fix it?" he said.

Rep. Paul Luebke, D-Durham, is one critic of how trust fund money is used. He said lawmakers will love the repair angle.

"They are supposed to look at the situation and say that was fine then, but this is now and in 2003, this is the best use of the trust fund," he said.

The projects would be financed by selling the remainder of $950 million in bonds approved by voters in 1996. Although the referendum was approved to speed up Highway Trust Fund projects, that hasn't happened and $700 million of bonds were never sold.

Permit and court delays have been a bigger problem in constructing the major road-building projects envisioned by the trust fund. By 2001, the delays had caused the cash within the fund to build to more than $900 million.

Transfers since then to help address the state's budget problems have reduced the cash balance in the fund to about $120 million.

The trust fund receives money from a 3-percent retail sales tax on cars, a gasoline tax and title fees.

A separate Highway Fund, with other dedicated taxes, pays for other road projects and maintenance.

Each year, roughly $2 billion flows into both funds to pay for the state's share of road building and maintenance. Easley, state transportation officials and legislative leaders said they believe changing the use of the bond money will create no legal problems.

The governor said the state needs that kind of flexibility to respond to pressing needs.

"The reality is that we have not kept pace with the demands placed on the state," Easley said.

Sen. Wib Gulley, D-Durham, a sponsor of the Senate bill, said all the urban loops and other projects called for under the original Highway Trust Fund bill eventually would be built.

"The legal purpose of the bonds will be respect," he said. Added state Transportation Secretary Lyndo Tippett, "Our system badly needs attention and this is a source of revenue without raising taxes."

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