Let’s keep transportation dollars for transportation purposes
- April 14, 2022
- Posted by: Joe Milazzo II
- Category: Blog
In one of our weekly blogs last fall, we spoke of a potential legislative policy change that would elevate transparency while directing more state level revenues to transportation. This week, in light of ongoing growth in our region and state — and amidst increasing inflation and supply chain challenges facing the transportation industry — we revisit and elevate that concept.
RTA members and partners,
One of RTA’s highest priorities in our approved 2022 action plan is modernizing revenues for multimodal freeways and streets, in order to provide sustainable and predictable funding. We have endorsed a vehicle registration-based access user fee approach as a viable, simple, and resilient method to replace the motor fuels tax fairly and effectively.
As we consider access fees and other various options to shore up transportation funding in North Carolina, an important principle for both transparency and trust is that all transportation-related taxes and fees should be dedicated to transportation purposes.
It turns out that there is an immediate, actionable opportunity to make improvements in that regard.
Fiscal year 2021 information from the NC Department of Revenue indicates that more than $500m in state sales taxes on more than $11 billion in automotive related purchases (e.g., auto supply stores, tire retailers, ancillary purchases at filling stations, auto dealers, etc.) went to the state general fund during the past fiscal year, rather than transportation.
RTA strongly supports the dedication of transportation taxes for transportation purposes — for transparency, for trust with the public, and to help provide the funding needed for the transportation system.
Our colleagues at the statewide “NC Go!” coalition — made up of local and regional transit systems across North Carolina, construction and engineering firms and their industry associations, as well as other entities including city and county governments — have been outstanding, long-time champions of the concept of transferring sales tax revenues from automotive-related purchases from the general fund to NCDOT.
Charles Hodges, NC Go executive director, recently noted that the coalition “has been advocating for several years for sales tax revenue raised from transportation-related sources to be dedicated to our state’s transportation needs“. He has also highlighted that “there’s no direct impact on citizens; this isn’t raising taxes or fees, it’s transferring from NC’s General Fund to transportation funding. And, given our state’s recently updated and very positive revenue forecast, now is the right time to redirect the sales tax revenue on transportation-related good and services to investments in highways, bridges, public transportation and other crucial transportation needs.”
This policy improvement could provide around $5 billion in new revenue for transportation in North Carolina over the next decade. While this won’t solve all of our regional transportation problems, it would clearly made a difference, and RTA will continue to support this. Read on for how you can help.
Implications and opportunities for advocacy in 2022
Inflation is creating an increasing challenge for our regional transportation priorities. Fortunately, we have a viable opportunity to advance two complementary policy improvements. First, we can focus on dedicating transportation-related state sales tax dollars to transportation purposes to enhance trust and transparency — while immediately providing up to $0.5 billion in new revenue statewide for roadway improvements in the upcoming fiscal year alone. Meanwhile, we will continue to highlight the potential of a vehicle registration-based access user fee to provide long-term funding stability and resiliency, regardless of vehicle propulsion technology or variations in miles driven.
Here is how you can help in regard to the transportation-related sales taxes revenue opportunity:
- Between now and May 1, please contact your legislator — or any that you have a good working relationship with — and ask them to ensure that transportation dollars be dedicated to transportation purposes as they begin consideration of both legislative bills and budget provisions in a few weeks.
- Specifically: please ask them to support any legislation or provisions that would dedicate automotive-related sales taxes to transportation and NCDOT rather than the state general fund.
- To be clear: Do not worry if you don’t know your own legislator, or whether they serve on the “right” committee. Your reaching out will let our elected representatives know that this issue is important to the regional business community — and it will likely encourage them to share the message with their colleagues.
- May 1st is a suggested deadline, since our legislative leaders return on May 4. But if you can’t make the call by that date, then do so when you can.
Regarding the vehicle registration-based access user fee: We will continue to elevate this approach and other options over the next several months in concert with other partners. More to come on this.
Please call or reply with questions. Have a great holiday weekend.
Let’s get moving,
Joe Milazzo II, PE
RTA executive director
RTA is the voice of the regional business community on transportation in the Research Triangle area.