The Current Status of NCDOT’s Financial Situation
The N.C. Department of Transportation’s (NCDOT) recent financial troubles could follow the department for years to come. The department managed to slowly build up its reserves as 2020 progressed. However, its current monetary problems will likely have a lasting impact on projects’ funding in the future.
The NCDOT Financial Hole Will Take Over A Decade To Recover From
Earlier this year, the department’s reserves dipped below its statutorily-mandated cash minimum of $300 million. In response, NCDOT put nearly all of its active projects on hold, many of which are still on hold. Multiple factors, including some primarily caused by the pandemic, contributed to NCDOT’s funding shortfall. Officials expect ongoing budget shortfalls and limited funding for the 2023-2032 State Transportation Improvement Program (STIP). NCDOT officials expect that there will be no money available for statewide and regional projects, and only $47M available for division-level projects, in the next round of the STIP.
The State Transportation Improvement Plan (STIP) Will be Short $2B
STIP, a program NCDOT uses to identify funding and construction schedules for transportation projects, will be short approximately $2 billion over the next ten years. However, once a project is included in the STIP, it is committed to, meaning that NCDOT will eventually get to the projects pushed back due to the current money troubles.
Officials anticipate funding for the upcoming round of the STIP will probably be much leaner than in previous years. Of the three main funding categories within STIP, there is no extra money available for projects at a statewide or regional level. Overall, there’s only an estimated $47 million available for division-level projects.
Selling Surplus Property For Auction
Not long before the start of the COVID-19 pandemic, NCDOT overspent its budget by an estimated $2 billion. One result of that deficit is that the state legislature ordered the N.C. Department of Transportation to sell some surplus property.
With that said, NCDOT is selling nine railroad cars that once belonged to Ringling Bros. and Barnum & Bailey Circus, which they bought to have them refurbished for use on Piedmont, the state-owned passenger train that runs between Raleigh and Charlotte. NCDOT paid $383,000 for the Ringling Bros. cars shortly after the circus gave its final performance in 2017.
N.C. Department of Transportation had initially put 16 cars up for sale last month and received only two offers for the passenger cars. The state said it would hold another online auction for the other 14 cars, presumably by the end of the month.
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