Raleigh, N.C. — North Carolina needs to shift highway construction funds from rural to urban areas, come up with new ways to finance roads and overhaul the state Department of Transportation, according to a report issued Thursday.

The North Carolina Justice Center, a think tank that advocates for low- and moderate-income residents, says the population boom statewide and rising construction costs will require the General Assembly and the DOT to change in the coming year so that state highways don't become overwhelmed.

The DOT has been dogged in recent months by a state audit and a consultant's report that describe it as an agency lacking in direction and plagued by poor planning.

"There's a lot of waste in DOT, and there's a lot of waste in the legislative formulas that allocate how money is spend and where it's spent in North Carolina," said Steve Jackson, a policy analyst with the group.

This comes as a governor's study group is planning to present a $2 billion bond proposal to the Legislature in May that that would speed up road projects across the state.

“North Carolina’s transportation budget is in crisis,” Jackson said. “Construction and maintenance costs are increasing at a far greater rate than revenues. A comprehensive solution that addresses revenue, spending priorities and project delivery is required.”

The report also calls for replacing the state gas tax with revenue sources that better match fees and charges with actual road use, such as a levy on the number of miles traveled.

It also calls for abolishing the system in which road money is spread evenly across the state, focusing instead on critical needs such as easing congestion in urban areas.

Jackson says rural areas, specifically in the northeastern and western parts of the state, are getting more money per capita.

“Money that should be spent reducing congestion and improving roads in municipal areas is being, and has been spent, on multilane roads in areas serving few residents,” Jackson said.

More money must also be spent on mass transit, and land-use planning needs to be integrated with transportation spending to limit the sprawl that adds to commuting times and distances, according to the report.