Fitzsimon File

Transportation has emerged as a top issue in this year’s campaign for governor and will also be a priority of the General Assembly when state lawmakers return for this summer’s short session in early May.  

There are legitimate reasons for all the attention. North Carolina’s highways and bridges are crumbling, the state’s population is exploding, and the Department of Transportation is struggling to maintain credibility, as road-paving mistakes and news of political fundraising and favoritism are again making headlines.

All the candidates for governor have offered some version of a transportation reform proposal. Charlotte Mayor Pat McCrory released his Monday, calling it a “visionary” plan.

McCrory can point to his role in the creation of the state’s only light rail system that has opened to rave reviews in Charlotte, but otherwise his plan isn’t much different from those offered by the other candidates, Democrats and Republicans.

Everybody wants to reduce the influence of politics in highway decisions, ban members of the DOT Board from giving money to candidates or raising it for them, and take a look at the way transportation funds are allocated.

All with the notable exception of State Treasurer Richard Moore want to end the annual $170 million transfer from the Highway Trust Fund to the General Fund that pays for most of the operations of state government, education, human services, public safety, etc.

Many of the advocates of ending the transfer have referred to it as stealing or raiding the Trust Fund. They always forget to mention that the legislation that created the Trust Fund in 1989 established the transfer to reimburse the General Fund for the loss of revenue from the sales tax on cars, which was redirected to the Highway Trust Fund.

The Trust Fund legislation, including the transfer, was supported by Republicans and Democrats in 1989, another fact that doesn’t make it into many transportation speeches.

The high-powered 21st Century Transportation Committee is now developing recommendations for lawmakers about the state’s transportation future, though most of the significant proposals won’t be ready until the 2009 session.

But Committee Chair Brad Wilson has said repeatedly that ending the $170 million transfer seems like a step lawmakers should take as soon as possible, adding to the conventional wisdom that there is a general consensus about it.  

The conventional wisdom is wrong. Many legislators and public interest advocates are opposed to cutting $170 million from the General Fund this summer and a quick analysis of next year’s budget prospects explains why.

North Carolina’s budget is in far better shape than most states and fiscal analysts expect a small budget surplus at the end of the year. But the problems in the housing market and the talk of recession in the national economy may translate into a more cautious revenue forecast for the next fiscal year, leaving lawmakers with little money to meet the state’s pressing needs.

Last session’s two-year budget predicted growth that would make $645 million available for budget increases next year. Even if growth projections are not reduced, the General Assembly faces difficult choices.

A three percent raise for teachers and state employees would use half of the $645 million.  The required contribution to the state savings account and paying for teacher bonuses as part of the ABC program would use up the rest.  

That leaves nothing to invest in affordable housing, mental health, child care and other areas that demand immediate attention. It also includes no money to offset increases in health care costs or make sure Smart Start and More at Four are adequately funded.

It does not take into account possible reductions in federal funding that state dollars would have to replace or the growing debt service bill to pay for the state’s construction efforts.

This is not the year to end the transfer from the Highway Trust Fund, no matter how many candidates for governor propose it.  It would mean taking money away from education, children’s health care, or affordable housing. That’s not what the creators of the Highway Trust Fund intended.

And it’s not just a budget issue. The candidates all agree that serious problems remain at the Department of Transportation, hardly the time to give the Department more money to spend.  

Let’s straighten out the Department first,  take care of struggling families, and leave any major transportation policy changes, including ending the Highway Trust Fund transfer, until the long session of 2009.

That gives the 21st Century Committee time to have a thorough debate and the new governor a chance to appoint a new DOT Secretary and Board.  We need a new approach to transportation policy and funding and both involve far more than campaign talking points.

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This entry was posted on Tuesday, February 12th, 2008 at 2:20 pm and is filed under Fitzsimon File. You can follow any responses to this entry through the RSS 2.0 feed.