RALEIGH – It seems there will be no special legislative session on transportation. Gov. Mike Easley, House Speaker Joe Hackney, and Senate leader Marc Basnight met Tuesday and reportedly discussed the alternative of convening a special study commission to examine North Carolina’s transportation system.
Mark me down as strongly in favor of the study option. I lack a financial stake in any Raleigh-area restaurants but retain a significant personal stake in free-flowing traffic around the capitol. Plus, I fear that legislators have a political stake in free-flowing tax money. So I saw nothing but bad news when the prospect of a special session arose. Its main purpose would have been to rush through a new package of tax increases and bonded debts.
North Carolina governments already confiscate a large-enough share of the people’s income. Government officials spend it unwisely. Misspending is especially rampant in transportation, where hundreds of millions of tax dollars are squandered annually on low-priority projects such as little-traveled rural highways, economic-development boondoggles, and poorly conceived transit programs that promise virtually no beneficial effects on mobility, congestion, or air quality.
To prefer a study to a costly special session is not to engage in wishful thinking. I know that most of the state’s political class believes there’s nothing left to study but which taxes and fees to raise to cover a projected $65 billion gap between transportation revenues and transportation “needs” over the next 20 years. Sorry, but that kind of talk is wildly premature and exhibits a superficial understanding of the transportation-policy challenge.
Many things have changed since the last big transportation-policy initiative, enacted in 1989 by a Democratic legislature and former Republican Gov. Jim Martin. Yes, one factor is revenue. Because of increasing fuel efficiency, vehicles generate less money in gas taxes per mile than policymakers envisioned. Even if North Carolina’s transportation priorities were sensible, the system as a whole would probably need more revenue to fund particular projects.
But there are many alternatives to raising general taxes. Leveraging private funds through partnerships and charging users directly for traversing new limited-access highway lanes would be far fairer and more efficient solutions, as would reducing wasteful spending in the General Fund of the state budget – on such functions as corporate welfare and pork-barrel projects – so that some $200 million a year in Highway Fund and Highway Trust Fund dollars currently transferred to the General Fund can be invested in highways.
The fundamental problem, however, is not one of inadequate revenue but of indefensible expenditure. As the JLF research team has documented over the years, North Carolina’s process for setting priorities and allocating funds in grossly out of whack. Among other things, the state needs to:
• Abolish or at least downsize and restructure the Board of Transportation. Currently a sort of appointed transportation legislature, it needs to become at most an advisory panel.
• Elevate the significance of congestion and usage measures in deciding which new projects to fund. This will inevitably shift money from little-used rural roads to much-used urban ones.
• Stop playing with choo-choos and streetcars. Transit service is an appropriate function for local government, but it needs to be cost-effective and aimed primarily at those who lack access to automobiles due to financial or physical limitations. That means bus and van lines, innovatively financed and operated. It doesn’t mean rail transit in North Carolina cities that won’t have adequate population densities to sustain it for many decades to come, if ever.
• End direct and indirect state subsidies for local airports, seaports, intercity rail service, ferries, and the ridiculous Global TransPark. Unlike streets and unlimited-access highways, there is no technical reason why these transportation alternatives can’t be financed by directly charging users. We should solicit bids for the sale of state-owned assets such as the North Carolina Railroad and the ports at Wilmington and Morehead City, using the proceeds to reduce the amount of future debt issuances.
Do I think North Carolina has a $65 billion need for new transportation spending over the coming two decades? No. If you ask government officials how much they need, they will tell you how much they think you might give them. But if the real 20-year-gap is just a quarter of that figure, we are still talking about investing more than $800 million more a year.
We can get awfully close to that number by redirecting existing revenues to their best use and embracing innovation. Once we do that, perhaps lawmakers could then make a case for increasing taxes for transportation. Perhaps. I’d still argue for offsetting the fiscal impact by reducing taxes elsewhere.
But we are far, far from that point. Right now, it’s time for state leaders to study up on transportation.
Hood is president of the John Locke Foundation.