Highway funding relief – what to do?
- April 9, 2020
- Posted by: Joe Milazzo II
- Category: Blog
At this week’s RTA Steering Committee, we discussed the growing challenges facing NCDOT from a funding standpoint – which translates into issues for all travelers, in terms of both safety and efficiency.
We know that NCDOT has been dealing with funding challenges for some time, due to recent hurricanes and winter storms, as well as issues associated with the Map Act, and the situation has become even more acute due to lower travel and reduced fuel prices – both of which have significantly reduced fuel tax revenues.
NCDOT now projects that their future revenues may be down 30% or more, with current estimates of a $300 million shortfall during the next three months alone.
The regional business community wants to ensure that NCDOT has sufficient funding for roadway operations and maintenance, and thus traveler safety and system preservation, although there is no consensus yet on how to get there.
We discussed one possible concept at some length during our Steering Committee meeting: a temporary, price-capped fuel tax surcharge to help preserve the safety and integrity of the transportation system, at a time when fuel prices are historically low. This option could take the form of a temporary surcharge of up to 15 cents per gallon of gasoline or diesel fuel when the average retail price of fuel in the state remains below a specific, low level – e.g., below $2.25, $2.00, etc., capped at a maximum price.
Our discussion was spirited, and it quickly became apparent that is no easy solution to this challenge. While there was support by several members for a proposed temporary fuel tax surcharge, there was also significant concern by several members about both the timing and the optics of introducing additional taxes during a challenging economic condition – even a temporary, capped surcharge that would keep the overall price of fuel near historical lows.
Recognizing that the issue was important but that more information and discussion was needed, the RTA Steering Committee decided to support a position whereby the organization would further explore a variety of avenues to provide revenue relief and support for NCDOT operations and maintenance. Possible options include the temporary fuel tax surcharge concept with a maximum price cap – with the potential for delaying or modifying its implementation – along with a focus on federal funding for relief, and a review of concepts being considered by other states.
RTA will engage other partners in the conversation, and also explore creating a task force to focus on this issue, with due consideration of the potential impacts of any option on businesses and employees. Please let me know if you would be interested in participating in a potential task force, and/or otherwise engaging on this topic.
Joe Milazzo II, PE
Regional Transportation Alliance