NC gov announces transportation funding overhaul

RALEIGH, N.C. (AP) -- A new North Carolina transportation funding model will direct more money to projects with a greater economic impact, Gov. Pat McCrory said Thursday.

The plan, which requires legislative approval, directs more money toward statewide and regional projects that can prove their potential worth with data. A system that once awarded money equally among 14 divisions would instead leave 20 percent of available funding for those districts to share and leave the rest for competitive projects that address key issues such as congestion, travel time and linking economic centers.

Secretary of Transportation Tony Tata said reprioritizing would allow the state to do more with the $15 billion it anticipates spending over the next 10 years. Despite flat or falling revenue from transportation's three main sources, the new funding model would allow the state to work on 85 more projects and create 66,000 more jobs than expected over that period, he said.

The model would split $12.8 billion of that pool between statewide and regional projects determined mostly by data that shows they'd address infrastructure needs. Regional projects would also take into account priority rankings from local planning organizations. The remaining $3.2 billion would be shared equally among the state's 14 transportation divisions.

Transportation revenue comes mostly from taxes on gasoline, Division of Motor Vehicle fees and a tax on the value of a vehicle at the time it's titled. Tata said the gas tax is falling 2 percent a year despite population growth because of greater fuel efficiency and the tax on vehicles is still below its pre-recession high.

McCrory left the door open for changes to taxes and fees in the future but said the state is focused on using existing revenue more efficiently for now.

"Down the road we've got to look for ways to address the revenue shortfall but the best way to do it right now is to use the current dollars ... the right way and the more effective way," he said.

Both House Speaker Thom Tillis and Senate Leader Phil Berger spoke in favor of McCrory's proposal. Legislation could come as soon as next week.

Tata said the new model would allow planners to look at more ambitious projects that were less feasible before. He gave the example of a new interstate between the Research Triangle and Hampton Roads in the northeastern part of the state that would open up a new potential port. He also said rail projects and new state highways could rise to the top of the list under the new model.

"Right now there's no ability to really plan for that the way the money is distributed, so no one really thinks about it because they're so strained in their vision," he said.

To pay for those more ambitious plans the Department of Transportation would redirect $120 million a year from secondary road maintenance to construction projects, Tata said. Combined with other changes, that fund would receive $200 million more a year, he said.

Paul Meyer, lobbyist for the North Carolina League of Municipalities, said he was pleased to see the state target transportation money toward projects with greater economic benefits while maintaining a guaranteed $3.2 billion for individual divisions, but he needs to see legislation before assessing the effect on local governments.

"It's obviously a large change in the structure, but in terms of the impact I don't know," he said.