RALEIGH – In my forthcoming book on North Carolina’s economy, Our Best Foot Forward, I discuss at length the role that transportation has played in the state’s economic history. I also propose reforms that will increase the productivity of government investment in highways and other physical infrastructure.
During the past century, education has usually trumped transportation as an election-year issue. But every 30 years or so, a North Carolina governor has made the issue his own. In the early 1920s, it was Cameron Morrison. In the late 1940s and early 1950s, it was Kerr Scott. And in the 1980s, it was Jim Martin. All three governors saw their road-building program adopted by the General Assembly. And in all three cases, North Carolina subsequently added highway capacity at a much greater rate than the nation as a whole.
The first, Richmond County native Cameron Morrison, came out of the early 20th century political machine of U.S. Sen. Furnifold Simmons. After Morrison won a tough gubernatorial campaign against Max Gardner in 1920, he began formulating a massive road-building plan to bring North Carolina into the automobility era.
Other states had led the way during the previous decade. In 1910, there were 450,000 cars and trucks registered in the U.S. By 1920, there were 9 million. At first, the automobile affected cities not in the form of mass ownership but as competition for streetcars. Urban transit relied on a cross-subsidy of costly long-distance travelers by overcharging those who rode for only a few city blocks. By the 1910s, new automobile owners saw an opportunity to make money by offering to pick up and drop off passengers for the same nickel the streetcars charged, but with greater comfort and convenience.
The proto-taxis, called “jitneys” for a slang word meaning nickel, posed significant competition to streetcars. The transit companies retaliated by pressing local governments to ban jitneys or at least heavily regulate them through high operating bonds and licensing fees. It only delayed the inevitable. Jitneys eventually gave way to buses, which offered more routes and greater flexibility for passengers.
As cars, taxis, and buses proliferated, streetcar systems responded to their revenue losses by jacking up their fares, chasing more customers away. By 1927, electric railway mileage in the U.S. had dropped to 40,000, from 45,000 a decade earlier. By 1937, it was only 24,000 miles. As a rural state with few major cities, North Carolina was never as heavily invested in streetcars as most states. Once automobility arrived, North Carolinians readily embraced it. From 1917 to 1937, streetcar mileage in our state fell by 63 percent.
Morrison’s road-building program was a major reason why. In 1921 he pushed a $50 million bond package through the General Assembly, which shortly thereafter created a state highway commission to manage the new projects. During the 1920s, paved road mileage in the U.S. rose 70 percent. In North Carolina, it went up 92 percent, to nearly 21,000 miles, while the number of registered vehicles in the state more than tripled.
Transit apologists, environmental extremists, and even a few cranky conservatives have described the transformation of American life by the automobile as an intrusive act of government. But this is a superficial conclusion. The real reason for the success of the auto is that, for the first time, there was a feasible means of charging those who used roads and streets: the gas tax. It created a link, albeit an imperfect one, between use and cost. The more someone drove, the more they paid to maintain and expand the road network. This solved the pricing problem that had plagued older turnpikes and plank roads. In those earlier cases, so many riders avoided tollbooths that road operators routinely lost 60 percent or more of the revenue they were owed.
It’s also important to keep in mind that automotive transportation is a mostly private industry. Yes, the roads themselves are financed, owned, and operated by government but most of the vehicles that traverse them are privately financed, owned, and operated – and they represent the vast majority of annual expenditures on the system. In 2008, for example, government at all levels spent about $136 billion building and maintaining U.S. roads and streets. That same year, private households alone spent $727 billion on vehicles, fuel, and parts. The latter figure doesn’t include commercial enterprises such as trucking companies or household spending on auto insurance.
Private automobiles proved to be a market-friendly development that made roads a far more valuable asset. There was no need for government to manufacture an insatiable public appetite for automobiles. It came naturally.
The next major wave of road-building came in the 1950s. The federal government offered states funds and technical assistance to develop the interstate highway system. At the state level, North Carolina voters elected Alamance County farmer and Agriculture Commissioner Kerr Scott in 1948 on a platform of paving rural secondary roads and building new capacity. During the 1950s, total road mileage in North Carolina rose by 25 percent, vs. 18 percent for the nation as a whole. Our state also outpaced the nation in new road construction during the 1960s and 1970s, but only modestly.
Jim Martin, the state’s first two-term Republican governor, was the next North Carolina leader to make transportation a signature campaign issue. During his 1984 campaign, the longtime congressman and former Mecklenburg county commissioner made a single promise about roads: that he would finish I-40 from the mountains to the coast. He kept the promise. During his 1988 reelection bid, Martin pitched a broader program of highway investment to strengthen the state’s economic competitiveness. The resulting Transportation Improvement Program passed the legislature in 1989. The $13 billion program promised to put a four-lane “intrastate” highway within 10 miles of 90 percent of the state’s population and to pave some 20,000 miles of dirt or gravel roads in rural areas. The TIP was later expanded in cost and scope to include interstate-quality loops around North Carolina’s largest cities. From 1990 to 2009, North Carolina’s highway mileage grew by 11 percent, vs. 4 percent for the nation as a whole.
Now, nearly 30 years after Martin’s election, we have another governor’s race approaching. The presumptive Republican nominee, Pat McCrory, made transportation a signature issue during his tenure as mayor of Charlotte (though not always in a manner that I and other analysts have liked). The two leading Democratic candidates, Bob Etheridge and Walter Dalton, are talking mostly about education.
Getting smarter about transportation would alleviate congestion and promote economic growth in North Carolina. But it remains to be seen whether the issue will gain any political traction this year.
Hood is president of the John Locke Foundation.