Road projects to advance
By Steve Herring
Published in News on February 24, 2017 9:57 AM
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News-Argus/SETH COMBS
Jim Trogdon, secretary of the North Carolina Department of Transportation, speaks to the crowd assembled during the Hot Topics Transportation Luncheon at the Goldsboro Event Center Thursday.
N.C. Transportation Secretary Jim Trogdon Thursday said his top priority is to accelerate highway projects planned over the next three years by spending down $2.1 billion in cash.
That would be followed by working to convince the General Assembly to support a highway bond vote to speed up projects even further out in the state's Transportation Improvement Plan.
Getting those projects done not only benefits the communities where they are needed, they also give the state time to work on a solution to dwindling motor fuel tax revenues caused by improved vehicle gas mileage and the growth of electric vehicles, he said.
Trogdon outlined his plan Thursday during the Wayne County Chamber of Commerce's Hot Topics Transportation Luncheon at the Goldsboro Event Center.
North Carolina will be moving over the next 20 years from the ninth most populous state to the fourth most populous state, he said. Unfortunately the growth will be not be even across the state with Mecklenburg and Wake counties accounting for about 68 percent of that growth, he said
"So what are we going to do address the unique challenges there, and what are we going to do to address the challenges that are everywhere else whether you are moderately growing like a lot of areas are," Trogdon said. "About half the state will be growing at a manageable pace, but still growing. About a third of the state will be actually shrinking in population. That is kind of the backdrop of where I am starting coming back to DOT.
"Coming back with those challenges that we see moving forward -- what do we need to do at DOT, and where am I going to focus?"
He reminded the audience that the General Assembly last year considered a $1.4 billion transportation bond. It was rejected, but another infrastructure package went forward with university system buildings and some other buildings and state park improvements for about $2 billion.
"I think there is going to be an opportunity because the reason that it was rejected was at that time the department had $1.6 billion in cash in the bank that we couldn't spend and get committed to projects to contract that were in our program," Trogdon said. "So my first priority, and I expect to be able to publish my plan next month, is how we will take what was $1.4 billion -- between last year and this year it has turned into $2.1 billion of cash on hand -- and accelerate projects in our TIP (Transportation Improvement Plan) much faster than what we had planned to do.
"I hope you will see in the next few months an acceleration of projects that are early in the plan in 2017, 2018 and 2019 all coming in this year or either next year."
The objective is to spend down from $2.1 billion to $900 million in 12 months to accelerate projects not scheduled to be awarded this year, Trogdon said.
"The second priority is to then, once we can show progress there, we will have, I believe, the confidence of the legislature (for another bond)," he said.
The state needs to go back and look at last year's highway bond proposal and advance something that can be supported, he said.
Trogdon said he thinks the $1.4 billion submitted last year was a "little" low.
"So I am hoping we will be coming back with a proposal that will be substantially bigger because I really like the philosophy of either you go big, go now or go home," he said. "We want to go to go big because the reason being is that right now we are funding about 17 percent of the projects submitted in the Strategic Transportation Investments Law. That is 17 percent across the state of all the projects that communities want and need, we are able to fund. That's fairly low.
"So we really need more investment in transportation, and I think through some innovative financing options I believe the General Assembly will be interested. Then you will be able to see the fruits of that not only where we are spending the cash balance money this year and next year to then if we get that authorized, you will see advancement of projects that are beyond the two- and three-year time frame -- some projects that may be scheduled out six, seven, eight years moving into the next three, four and five years."
That would be significant, he said
"Looking down the list of projects in Wayne County most of them I believe are improvements on (U.S.) 117, some improvements on (U.S.) 70," he said. "The objective there, if we get this authorization, we would be able to do all of those plus some additional ones that may be out beyond the five-year period.
"That will be extremely important because we have to deliver more than just 17 percent of what the state needs. We have to do it first with some financing options, and then we have to address long-term transportation needs. The reason why I say that is because we have a limited amount of time, about five years."
Two years ago the new vehicle fuel economy standard was about 24 miles to the gallon, he said. This year it is 34 miles, and by 2025 it will increase to 54 miles, he said.
"I am 57 percent reliant on motor fuel tax -- 57 percent of my revenue comes solely from motor fuels tax," Trogdon said. "So what's going to happen is our revenue will start shrinking rapidly."
Even if the assumption is 54 miles per gallon, which is a bad assumption because the industry will far exceed that because most vehicles by 2025 will be fully electric, he said.
That translates into "zero" revenue, he said.
"That is a significant problem," Trogdon said. "So the objective as I said is to take the cash balance accelerate in the next two years. Do some financing. Accelerate up to five years' worth of projects. That gives us five years to solve what our long-term transportation revenue needs are going to be, and it will not include motor fuel taxes. It can't, or we will not be successful either as a DOT, as a state, region or as a nation."
Trogdon said that unfortunately he does not have a lot of impact on what happens in Washington, D.C.
However, the DOT is submitting projects for the pending trillion dollar national program.
"Still haven't gotten legislation, but we hear a lot of discussion so we want to make sure our projects are ready to take advantage of that," he said. "However, the federal problem and the state problem are the same.
"We are both heavily dependent on a revenue source that will be eliminating itself by our industry. So we have to move and we have to move urgently and now."