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NCDOT “Billions Short” For Future Projects After Refigured Costs

A state audit and reworked cost estimates revealed that NCDOT was planning projects that were billions of dollars more than it could afford. Consequently, current and future projects are expected to either be put on hold or stop altogether. Though it is normal for cost estimates and projects to be reevaluated periodically, this instance is significant, with an estimated $7 billion over its initial plan between 2024 to 2033 — and that’s only for committed projects.

With these projects taken into account, which are expected to start within the first six years of NCDOT’s plan, it is only the tip of the iceberg. When uncommitted projects are factored in, the department exceeds its initial plan by $13.3 billion. Needless to say, NCDOT does not just have a spending problem — they have a revenue problem too.

An Ongoing Problem

A lot of this NCDOT’s revenue problem is due to the organization’s poor planning. However, outside factors also play a role. A good portion of NCDOT’s revenue for projects has been from gasoline taxes in North Carolina. However, the federal government didn’t raise the rate (set in 1993) until 2015, when it allowed the gasoline tax to rise with inflation. This helped increase revenue somewhat, though it was further complicated by the substantial societal shift to electric and more fuel-efficient vehicles. 

NCDOT’s ill-informed planning strategies have set back projects for as long as a decade, and it has been recommended that the DOT increases its spend at least $20 billion in the next decade to catch up.

Commission Offers Solutions

An appointed commission, co-chaired by former Raleigh Mayor Nancy McFarlane and Howard Nye, issued a report in January saying the state needs to increase its transportation spending by at least $20 billion over the next 10 years. 

Evidently, this would not be an easy feat. Some of the recommendations to allow this include:

  • Increase the current 3 percent tax on vehicle sales to 5 percent
  • Increase the state sales tax
  • Tax transportation network companies like Uber and Lyft
  • Increase the state’s fee on electric vehicles and create one for hybrids
  • Charge delivery fees on goods bought online
  • Experiment with a pay-per-mile program that would track how far people drive
  • Toll more roads

Discussions about what projects need to be scaled back or dropped are currently underway. However, the next transportation plan isn’t due (even in draft form) until December 2022, allowing NCDOT a full year to reprioritize and reallocate funds. In addition, the plan likely will not be evaluated until as late as summer 2023, giving NCDOT ample time to better plan its projects.

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