NC Senate Approval of NCDOT Funding Unlikely to Fix Current Financial Crisis

October 4th, 2019

As we reported in a previous blog, The NC Department of Transportation (NCDOT) has been dealing with a financial crisis resulting in a layoff of hundreds of employees as well as a delay of more than half of the pending state roadway projects.

Law mandates the DOT maintain a cash reserve of 7.5 percent ($282 million) of annual state appropriations. However, with unforeseen costs from natural disasters last year, including Hurricane Florence and Tropical Storm Michael, costs of clearing up highways after snowfall and ice, and on top of all of that, the addition of this year’s hurricane, Hurricane Dorian (which alone cost about $40 million) the agency’s reserve has been depleted.

To put things into perspective, Sen. Bill Rabon, R-Brunswick, shared that the DOT usually budgets approximately $66 million annually for disasters, with this year’s cost totaling about five times that amount. Only compounding the situation is the more than $450 million the DOT is on the hook for by way of lawsuits from property owners over the Map Act. To make matters worse, Sen. Jay Chaudhuri, D-Wake, said that he’s heard from Raleigh-area engineering firms that the delay in the DOT’s projects may even cost employees their jobs.

In an attempt to resolve the issue, the NC Senate has approved of $3.9 billion in funding for the NCDOT, with the NC House expected to follow suit next week. Unfortunately, budget experts anticipate that this funding is unlikely to address the current budget shortfall, so the Legislature will still need to take immediate steps to address the current NCDOT fiscal crisis. Republican leaders in both the House and the Senate hope to figure out how to remedy the remaining problems by the end of the month.

The eminent domain and land condemnation lawyers of Henson Fuerst represent property owners across the State of North Carolina in land condemnation matters.  If you have questions or for more information, call us at (919) 781-1107.