Economic outlook bleak for state DOT

Posted November 13, 2008

— There could be a bumpy road ahead for the North Carolina Department of Transportation, the agency's chief financial officer told lawmakers Thursday.

Mark Foster told the Legislature's Transportation Oversight Committee that DOT revenue is down 6 percent and that he is projecting an 11 to 12 percent budget shortfall – more than $300 million – for the fiscal year that begins next July.

Over the next three years, the DOT's budget could approach a $1 billion shortfall, and Foster projects it could reach a $65 billion shortfall over the next 25 years.

"We are in an economic downturn," Foster said. "The impact on the DOT budget may be worse than what people are talking about."

In October, the highway-use tax on automotive sales was down 27 percent. DMV fees were down 14 percent, and revenue from the state gas tax was down 10 percent.

Foster told the committee that Kansas transportation officials announced Thursday they were cutting all new construction immediately and that Virginia has already cut its new road construction for up two years and its work force by 10 percent.

"That's a bellwether of things to come," he said.

The DOT has already identified savings of $200 million without cutting projects or staff and is still looking at how it can trim an additional $100 million or more, Foster said.

Sen. Neal Hunt, R-Wake, said the DOT is going to have to cut road projects. Which projects could be affected is expected to be announced at next month's Transportation Oversight Committee meeting.

The DOT has about $500 million in cash, Foster said, and pays out roughly $15 million a day.

Its three most significant projects, set to start later this fiscal year – the Bonner Bridge in the Outer Banks, the Fayetteville Loop and Crescent Road at Global TransPark in Kinston – will cost approximately $700 million.

The statewide 21st Century Transportation Committee, charged by the governor to improve efficiency, is looking at more ways to fund road construction. Among options on the table are lifting the cap on the state gasoline tax, increasing the highway-use tax 1 percentage point and charging a miles-traveled fee to car owners.

Those options – based on numbers presented last week at a subcommittee meeting – have the potential to generate an additional $795 million to $960 million in revenue a year.

The 21st Century Transportation Committee is expected to submit its funding recommendations next month to the General Assembly.


This story is closed for comments.

Oldest First
View all
  • MojoGal Nov 14, 2008

    Thanks folks. I read the link and now wish I was back in my ignorance is bliss state. After reading the full page, I didn't know if I should laugh or cry. But I did like this statement:

    "Deciding to adopt a VMT fee is just the first step in the discussion, Wilson said. “Once you get your mind around that that’s what you should do, then the devil’s in the details.”


  • chfdcpt Nov 14, 2008

    I just love the way some people had to blame Bush for a state problem that has been created by our governor and legislature.

    The US DOT gives each state a certain portion of highway funds based on the miles of US and intersate highways in each state. So, how can it be Bush and Reagan's fault when it has been our elected leaders that have kept on raiding the DOT fund for the last 8 years to keep the budget balanced? And lets not forget a few years back, when Easley kept the sales tax revenue that was supposed to go to the cities and counties, which led to a massive increase in property taxes.

    But I guess that was Bush's fault too.

  • mrmud4x4 Nov 14, 2008

    This is not about DOT, this is about getting more money from us. Dot's just the scapegoat. Hold on to your wallets, the dems have a mandate now! If they can tax the air you breath....they will. They have a whole list of taxes coming that they are going to choose from!

  • kitelover110 Nov 14, 2008

    How sad - no more paving roads, driveways and parking lots for the politicos

  • hi_i_am_wade Nov 13, 2008

    Remind me again how this is different than any other year? The NCDOT is always out of money and the money that the NCDOT had was taken away to waste on corruption. So how is this any different?

  • 1cent+1cent Nov 13, 2008

    miles traveled fee, Visit the following link for an excellent article on what's being planned by our legislators for additional fees and taxes:

    Insufficent funds at DOT, why did DOT fund a Black History Museum in the town of Princeville? Political pork instead of fixing highways.......

  • PaulRevere Nov 13, 2008

    Oh, no! I hope Bev Perdue finds the money to pave those country roads that Pat McCrory didn't want paved for all us country bumpkins represented in that atrocious radio ad!

  • Ric The Red Neck Smithfield NC Nov 13, 2008

    MojoGal the miles traveled fee is simply....
    Charging by the mile The newest idea on the table is a fee for “vehicle miles traveled,” which would charge drivers based on the number of miles they drive. A VMT fee would help the state cope with declining revenues from the state fuel and highway-use taxes, which provide more than 80 percent of the N.C. Department of Transportation’s budget, Wilson said.

  • Think_people Nov 13, 2008

    Just some comments, for the experts that are making judgements about the DOT, are you in construction, civil engineering? Also it is better to have knowledge about how things work, before making judgements. Everyone is an expert when they don't work in the field being discussed. Just food for thought.

  • MojoGal Nov 13, 2008

    What is a "miles traveled fee"? Are they talking about toll roads?