NCDOT pays off state loan two years ahead of schedule
The North Carolina Department of Transportation has replenished the state’s Highway Trust Fund (HTF) with $1.1 billion — two years ahead of schedule.
N.C. State Treasurer Dale Folwell made the announcement in a press release Thursday.
He noted the dramatic turnaround from four years ago in 2019.
In Fiscal Year 2019, the DOT spent $6.8 billion against a budget of $5 billion for that year. Of the $1.8 billion in overspending, DOT depleted $1.1 billion in “short-term” loans from the HTF to the Highway Fund (HF) between May 2018 and April 2019. Prior to that, the HTF had not been touched for over 14 years.
HTF money is designated for capital projects. The Highway Fund is for maintenance.
“Under state law, many of the projects funded could not have been paid using HTF funds. Additionally, as required by statute, NCDOT neither sought nor received approval of the State Treasurer to loan the funds from the HTF to the HF,” Folwell said in October 2019.
Former N.C. Transportation Secretary James Trogdon said at the time that hurricanes and underestimated project costs were to blame for the overspending.
Overspending also caused NCDOT to suspend work on 900 projects in August 2019. They wouldn’t be restarted until the spring of 2020.
S.B. 356 was signed into law in November 2019. The bill gave the DOT $36 million from the General Fund for recovery efforts from Hurricane Dorian and forgave a $90 million General Fund loan. It also gave the DOT an extra $100 million Build N.C. bond and allowed the department to use a $100 million one-time cash loan from the Highway Trust Fund to the Highway Fund. The loan was given with the stipulation that it would be paid back.
In 2020, detailed repayment procedures were established under a Memorandum of Agreement (MOA) among the Department of State Treasurer, the Department of Transportation, and the Office of State Budget and Management. When the MOA was signed, the loans were expected to be repaid within four years. However, the loans were repaid two years early, on Dec. 28, 2022.
“The early repayment of the loans to the Highway Trust Fund is a tribute to the leadership of Secretary (J. Eric) Boyette and the professionalism of his staff,” Treasurer Folwell said. “The turnaround from the previous administration is quite welcome. They listened and collaborated with the staff here at DST and have made remarkable progress.”
The North Carolina General Assembly created the HTF in 1989 to provide revenue sources for specific highway projects.