Transportation panel agrees new taxes, fees needed

RALEIGH, N.C. — North Carolina motorists should be prepared to pay more to drive on roads if the General Assembly approves higher taxes and new fees to help pay for the state's transportation needs.

The 21st Century Transportation Committee, which looked at road-building, bridge and public transit needs, met Wednesday to sign off on final recommendations to give state lawmakers when the Legislature reconvenes next month.

Among its recommendations is a requirement for motorists to pay a fee for the number of miles they travel in a year.

Other sources of revenue include increasing the highway-use tax from 3 percent to 4 percent on vehicle purchases, increasing vehicle registration fees and putting tolls on some of the state's major highways, including Interstates 77 and 95.

The state Department of Transportation faces a projected $65 million budget shortfall over the next 20 years.

State officials commissioned the blue-ribbon commission more than a year ago to look at new ways to help generate $10 billion over the next 10 years for transportation projects.

Committee member Chuck McGrady said, however, that the group failed to address how to ensure the revenue be used properly by the DOT, which has come under fire from some for being inefficient.

"We also needed to ensure that, if we could find increasing moneys to fund these transportation needs, that those funds would go into a system and into a department that could use the funding efficiently," McGrady said.

"And I think others looking at this report will really wonder why it was that we skirted that set of issues," McGrady added.

Stephen Jackson, a policy analyst with the North Carolina Justice Center's Budget and Tax Center, said the report failed to address the DOT's inefficiency and how to move forward with the plan.

"It was kind of marginalized," Jackson said. "It was very much business as usual. How can we just pour more money into the same old leaky bucket?"

The transportation advocacy group N.C. Go!, though, applauded the committee for its work, saying it has done "the heavy lifting" in creating a plan for funding reform.

"Now it is up to legislators to act upon the recommendations before our transportation system becomes a drag on an already struggling economy," said Marc Finlayson, co-chairman of the group.

Committee Chairman Brad Wilson said the group put forth its best effort on the report but ran out of time. The committee dissolves at the end of the month.

"Remember, the goal for this committee was to take a big first bite," he said.

Lawmakers on the committee, however, said it would be difficult to get new taxes and fees passed in a bad economic climate.

"We need to batten down the hatch and hold the ship on course, if we can, without doing anything innovative or out there that would result in increased revenues," Rep. Nelson Cole, D-Rockingham, said.

Cole said lawmakers can't put the burden on taxpayers during a recession. From a projects point of view, he said, the situation is frustrating.

The DOT has halted a number of projects because of the economy and a decrease in revenue. Spending on new projects has been cut from about $80 million a month to approximately $15 million to $20 million a month.