Press Releases and Newsletters
Joint Transportation Approps Committee 2/8/2011
Joint Appropriations Subcommittee on Transportation Feb. 8th, 2011 presentation on budget process.
How we can use existing transportation dollars for job growth (The Hill)
President Obama said in the State of the Union address that to win the future: “We’ll put more Americans to work repairing crumbling roads and bridges. We’ll make sure this is fully paid for, attract private investment, and pick projects based [on] what’s best for the economy, not politicians.”
Now it’s time for elected leaders to make good on these promises by making smart investments to help keep our country on the road toward economic recovery. How can we pick projects that are best for the economy? We can start by putting more focus on fixing our existing roads, bridges and public transportation, and providing people with more transportation choices. You don’t have to look any further than the stimulus to see why.
The 2009 American Recovery and Reinvestment Act (ARRA) was designed by Congress to stimulate the economy and put people back to work. As part of ARRA, states received $26.6 billion in flexible transportation funds to create jobs and spur the economy.
As President Obama said during the State of the Union, smart transportation strategies can attract new business and bring millions in private sector investment and revenue.
Which states translated those dollars into jobs and economic growth?
According to a recently released study from Smart Growth America, a national organization that advocates for transportation policies that support businesses, create jobs and provide more options for how people get around, states that maintained and repaired existing roads and bridges and invested in public transportation projects created the most jobs. The states that ranked poorly spent their funds building new roads and bridges.
Historically, investments in public transportation generate 31 percent more jobs per dollar than new roads; road and bridge repairs create 16 percent more jobs per dollar than new construction. Why? Because these projects invest more in workers and their paychecks and less in land, which has little or no stimulative or reinvestment value.
The new study documents an even more dramatic finding in ARRA; each dollar spent on public transportation produced 70 percent more job hours than a dollar spent on highway programs.
Unfortunately, only 1.7 percent of the stimulus’ flexible transportation money was allocated to the top job creator: public transportation. Fifty-nine percent of this money went to the second largest job creator: preserving and maintaining roads. And while this might seem good, as a country we have hundreds of billions in repair backlogs that we can’t afford to pay now. Spending nearly 40 percent of the money on the activity that creates the least jobs – to add to an infrastructure that we already can’t maintain – seems like a missed opportunity.
We have to do better. President Obama’s speech provides us with a call to action that we hope local, state and federal government will heed.
Governors and legislatures are beginning to make the hard choices about next year’s spending priorities. The good news is they can produce more jobs with existing dollars. We urge them to reprioritize their transportation funding and focus on projects that will provide the strongest economic stimulus: repair and maintenance of existing roads and bridges and investment in public transportation.
Past decisions about transportation spending are detours, not dead ends. While the golden opportunity of ARRA funding has passed, state and federal governments can learn the lessons of ARRA and meet President Obama’s challenge to do what is best for the economy.
Smarter transportation spending makes sound economic sense. Plus, people are asking for it. According to a recent national survey conducted by Smart Growth America, 91 percent of voters believe that maintaining and repairing our roads and bridges should be the top or a high priority for state spending on transportation programs, and 68 percent believe that expanding and improving bus, rail, van service, biking, walking, and other transportation choices should be the top or a high priority.
Rebuilding the economy is the most significant issue of our generation. At this critical moment, we must spend the money we have effectively. Wise spending of transportation dollars produces immediate results in jobs and economic prosperity, and also gives us the long-term infrastructure we need to prosper in a competitive world. With smart transportation funding, our leaders have the opportunity to win the future.
Christine Todd Whitman is the former governor of New Jersey and a former U.S. Environmental Protection Agency administrator. Parris Glendening is the former governor of Maryland, and is the president of the Smart Growth America Leadership Institute, which helps state and local elected, civic and business leaders design and implement effective smart growth strategies.
By Christine Todd Whitman and Parris Glendening – 02/07/11 10:43 AM ET
BUDGET BALANCING (The Associated Press)
Republican legislation that seeks several hundred million dollars to help narrow a projected $3.7 billion gap for North Carolina’s budget next year has received final Senate approval. The Senate voted 31-16 in favor of a plan that directs Democratic Gov. Beverly Perdue to locate at least $400 million in cost savings throughout state government. The measure also would take about $140 million from reserves and other pots of money. Democrats voting against the measure complained the bill takes $75 million from Perdue’s incentives programs and a tobacco trust fund at a time when government should encourage private-sector jobs. The chamber approved a Republican amendment that preserved $4.7 million sitting in a cancer research fund at UNC Hospitals. The bill now goes to the House.
By Gary D. Robertson.
Posted on Mon, Feb. 07, 2011
Video Gambling (THE ASSOCIATED PRESS)
The state lottery has formally requested information on how it could operate casino-style video gambling machines in the event that lawmakers and Gov. Beverly Perdue agree to make them legal and regulate them. New lottery Executive Director Alice Garland said her agency put out a request for details from companies that have the ability to run a centrally operated video lottery terminal system that would operate multiple games. The request, which sets a Feb. 28 deadline for responses, is not a request for competitive bids to actually carry out such a set of games. Garland emphasized the lottery has no opinion about whether the state should get in the business. Rather, it wants to be prepared as a precautionary matter. “Should the Legislature decide to do something, they’re going to want it done yesterday,” Garland said, adding that the request for information “gives us a legitimate way for us to get educated” on the topic.
Perdue has said she’s considering whether to recommend the Republican-led Legislature should pass legislation to regulate the machines, which are currently the subject of a state ban that’s being litigated. The lottery provided data to lawmakers in 2010 showing the state could one day generate $576 million annually if lawmakers legalize video poker machines again and regulate them heavily. Garland said the Perdue administration has asked many questions in recent weeks about video lottery gambling but “I’ve not gotten an affirmative response that they’re going to do anything” on the idea. The Legislature banned traditional video poker machines in 2007 and lawmakers have tried twice to also prohibit video sweepstakes machines, where customers buy Internet or phone time that gives them the opportunity to uncover potential cash and prizes with mouse clicks on a computer screen. A Superior Court judge ruled in November that portions of the sweepstakes law are too broad and violated free-speech rights, opening the door for some machines to keep operating. Attorney General Roy Cooper’s office appealed the ruling to the Court of Appeals.(Gary D. Robertson, THE ASSOCIATED PRESS, 2/07/11).
GOP came ready to govern (Charlotte Observer)
RALEIGH Most legislative sessions start out with a congenial break-in period that lets lawmakers learn one another’s names, ease into committee assignments and find out how to turn ideas into drafts of new laws.
This year, everything is different. Committees were named fast, drafts of major legislation were ready to go to committees, and legislative leaders were intent on passing laws as quickly as they could get to them. There were high hopes for a bipartisan start to the session, but they soon showed signs of strain.
The House approved a bill in effect exempting North Carolina residents from the new federal health care law’s mandatory purchase of insurance, producing some testy exchanges with Democrats led by former Speaker Joe Hackney.
The Senate tentatively approved a bill giving the governor more power to order $400 million in savings in the current budget year to get a head start on covering a big shortfall expected next year. But it also ordered the capture of $140 million more in unspent funds, including more than $67 million for the Golden LEAF Foundation and more than $8 million from the One North Carolina Fund and the Job Development Investment Grants program that Gov. Bev Perdue considers essential to entice businesses to create more jobs.
Pretty soon Republican patience wore thin with Democrats’ attempts to preserve those items. Sen. Bob Rucho, R-Mecklenburg, spoke for a number of GOP members who for years sat in the minority and watched while Democrats got their way. Pointing his finger, Rucho said, “You spent us to death…. Pay attention – this is what you should have done when you had a turn. Don’t come crying about jobs now.”
Rucho’s sharply pointed remarks drove home the key point about this session: Republicans not only have the votes, they also have firm ideas about what to do. They’re going to do it as fast as they can.
In fact, says House Speaker Thom Tillis, the majority hopes to produce a new state budget by June 1 – dramatically sooner than most legislative sessions in recent decades and well ahead of the June 30 end of the current fiscal year. Not only that, but legislators will also have at least three days to read the bill before they have to vote, he vowed. The House plans to adopt a budget by April 22, in fact, just a week after tax day, and the Senate will act by May 13 on its bill.
I asked Tillis spokesman Jordan Shaw whether the House would need to return to the legislative schedule lawmakers followed in the 1970s and 1980s when I was first covering the General Assembly – staying in session each week through Friday mornings instead of leaving after sessions around midday on Thursday.
Friday sessions were axed in the 1990s in part to let legislators have more time to tend to their jobs and other matters back home. Tillis plans to continue that practice to help preserve a citizen’s legislature. But if lawmakers need to be in town to handle important work, Shaw e-mailed, there may be exceptions.
In other words, Tillis and Senate President Pro Tem Phil Berger are pushing their members to get more work done faster — not only not adding to the length of the legislative session, but finishing things earlier.
I cannot recall anything like this before in 34 years of covering the place – where members came to Raleigh ready to work right away, announced a schedule for when the budget would be voted on or when a final version would be approved.
This depends on a number of things, primarily party discipline. Democrats have come to town determined before – but watched as those plans fell apart over differences among party factions, rivalries between the House and Senate and deteriorating relations between the legislature’s two chambers and the governor. Even when Democrats held most of the votes and the governorship too, there were plenty of disagreements, delays and dysfunctions.
What’s different this year, it seems to me, are five things:
The new majority’s leadership is intent on working fast.
It is focused on what it wants to do on jobs, on the budget, on charter schools, on elections laws and a host of other issues.
It has specific plans for what it wants to approve in the early going and what it will do later.
It has a schedule in mind for when it wants to finish its major work.
And, perhaps most remarkably, it has members who appear to be unified in what they’re doing and how and when they’ll do it.
Each of these things could fall apart as the session moves along and as legislators approve spending cuts or make unpopular program decisions. When Republican legislators’ constituents start squawking about consequences of legislative actions, the going will get harder for the new majority.
But so far the early going has been fascinating to watch from a strategic point of view.
Remember: In the mid-1990s when Republicans held the House for two sessions, there were serious questions about whether Republicans were ready to govern.
Quite aside from whether you like or dislike what the Republican majority is doing this time around, it’s evident they are not only prepared to run the place, they are doing it exactly how they want to.
By Jack Betts
Associate Editor
Posted: Sunday, Feb. 06, 2011
Jack Betts writes on politics and life in The Carolinas for the Charlotte Observer’s Editorial page.
Jack Betts is an Observer associate editor based in Raleigh: jbetts@charlotteobserver.com.
N.C. court system seeks volunteers for job buyouts
N.C. court officials are seeking a voluntary reduction in their workforce as a result of a $3.7 billion-dollar deficit confronting the General Assembly.
John Smith, director of the N.C. Administrative Office of the Courts in Raleigh, notified court officials about the plan in a Jan. 31 letter. He said employees who agree to the voluntary separation will get a severance package.
“Having concluded that this voluntary reduction in force plan is the best course, I am asking that our senior resident and chief judges, elected clerks, and district attorneys look carefully at the situation and determine if any positions in your office or under your supervision could be vacated voluntarily and held as a cushion against the likelihood of cuts which may otherwise require the involuntary elimination of filled positions,” Smith wrote.
Smith said court officials are looking for voluntary separations which will result in a savings, and will consider any reasonable plan to accomplish that.
“If you believe your staff is already so thin that no further cuts can be sustained, or that any program is so important it cannot be compromised, we will support your decision at this time,” he wrote. “However, it is because we cannot assure anyone that future cuts will not be so severe that the positions may be lost anyway that this decision was made.”
Smith said the court system’s budget is 90 percent compensation, and that the only place left to look for recurring cuts is in personnel.
“It is only by managing this process now, while we can pay for it, that we can position ourselves to survive the likely cuts necessary for a balanced budget,” he wrote.
Smith wrote that he recognizes the needs of the court system, and that the services provided to the citizens of the state need protection.
“But it would be irresponsible not to prepare for the possibility, which now seems more likely than not, that our current strategies will be inadequate to meet the projected deficit,” Smith wrote.
Mecklenburg Chief District Judge Lisa Bell said employees at the courthouse, including clerks and court administrators, had to request severance package estimates this week. They would have to leave their jobs by Feb. 28, she said.
Bell said five employees asked for the severance package estimates, but declined to accept the voluntary separation after learning what the compensation would be.
“There are very difficult decisions that will have to be made on all levels of the court system,” Bell said. “The courts are feeling the economic pinch just like the private sector.”
By Gary L. Wright
gwright@charlotteobserver.com
Posted: Saturday, Feb. 05, 2011
Hawaii transportation committees approve higher vehicle fees to repair state roads (Canadian Business)
HONOLULU (AP) – Hawaii drivers would be charged higher annual fees on their vehicles to help repair the state’s well-worn roads, according to legislation that passed the House Transportation Committee on Wednesday.
Vehicle registration fees would increase from $25 to $45 a year, and weight fees would approximately double, with the heaviest vehicles paying the highest rates.
The new charges would raise a combined $56 million a year for paving, repairs, drainage, traffic signs, guardrails, lighting, sidewalks, landscaping and storm cleanup on nearly 2,500 miles of state roads.
With an estimated 1.1 million vehicles statewide, the increases amount to an additional $51 in yearly fees required for each vehicle, on average.
“We have a big backlog of highway improvements and filling the potholes,” said House Transportation Committee Chairman Joe Souki, D-Waihee-Wailuku. “If we want to maintain the highways, we need to put money in the highway funds. You get what you pay for.”
Money that’s supposed to be set aside for road maintenance has been taken by lawmakers to help balance the state’s general fund budget in recent years, and now highway funds need to be replenished, Souki said.
The fee increases would be paid into the Highway Special Fund, and they wouldn’t be used to help balance the state’s $800 million projected budget deficit over the next two fiscal years.
But charging higher vehicle fees would hurt the economy and raise the cost of a Hawaii vacation for tourists who rent cars, said Christine Ogawa Karamatsu, testifying for Enterprise Rent-A-Car, Alamo Rent A Car and National Car Rental.
“Much of this increase will be passed onto Enterprise’s customers in the form of higher rental fees,” she said in written testimony. “Ultimately, this will make the cost of a Hawaii vacation less attractive than other comparable visitor destination areas.”
She estimated the fees would cost her companies a combined $1.1 million for its fleet of cars.
The fees haven’t been raised since 1991, and the state’s highways have fallen into disrepair, said Sen. Kalani English, chairman of the Senate Transportation Committee, which approved similar bills earlier this week.
“The bottom line is that it’s needed,” said English, D-East Maui-Lanai-Molokai. “If you go on this current path, then we’re going to have very dangerous highways.”
These proposals previously passed both the House and Senate, but the bills died in conference committee last year.
The legislation will next be considered by each chamber’s money committees.
Separate bills also are pending that would start pilot programs to tax drivers based on how far they drive instead of how much gas they buy, an idea known as the vehicle mileage tax (VMT).
By Mark Niesse
February 3, 2011 – 11:16 AM
N.C. Senate prepares budget cuts (Charlotte Business Journal)
A plan moving its way through the N.C. General Assembly could mean significant cuts to several economic development funding sources that primarily target rural counties.
Senate Bill 13, which the Senate approves Thursday afternoon by a 30-18 margin, would divert $142 million from various funds. That includes $67.6 million from the Golden Leaf Foundation, which was funded by a settlement with tobacco companies. Under the plan, half of the money the Golden Leaf Foundation is slated to receive next fiscal year would be diverted to the state’s General Fund.
The N.C. House is expected to take up the measure soon.
The bill, Balanced Budget Act of 2011, also provides for the General Fund to receive $11.7 million from the state’s Health and Wellness Trust Fund, which was created in 2001 to address statewide health issues, and $2.8 million from Tobacco Trust Fund, which helps farmers and others involved in the tobacco industry transition into other segments of the economy.
It also sweeps $5.2 million from the One North Carolina Fund, a cash fund used to attract companies to the state.
Also facing the ax: $13.5 million from information-technology reserve funds; $14 million from a motor-fleet reserve, $1.8 million from farmland preservation; and $4.7 million from money headed to the UNC Cancer Center; among others.
Gov. Bev Perdue criticized Senate leadership for proposing the cuts to economic-development programs.
“The proposed cuts to North Carolina’s jobs and economic development funds will damage our ability to recruit new jobs and to expand existing businesses in the state,” Perdue says in a statement. “I am truly surprised that Senate leadership is considering taking North Carolina’s jobs money as a way to balance the budget. It won’t work, and what’s more, our people won’t work if we can’t bring new companies and new industries to our state.”
Senate Bill 13 is one of several efforts to address a budget deficit estimated at $3.7 billion. Senate leaders hope to cut $800 million from the budget.
“Our job is to make tough choices to balance the budget,” said Senate President Pro Tem Phil Berger, an Eden Republican.
Charlotte Business Journal – by Triad Business Journal
Date: Thursday, February 3, 2011, 5:37pm EST
Lawmakers Shouldn’t Ignore Transportation Spending and Tax Cuts
It’s budget season again and the new Republican majority in Raleigh is scrambling to come up with almost $4 billion to fill in the state budget hole. Budget items that are paid for by the General Fund, such as education, Medicaid and public safety are going to get the lion’s share of attention.
But legislators shouldn’t overlook the “other” state budget – one that recently imposed a tax increase and contains plenty of low hanging expenditures just ripe for cutting. This “other” budget is the nearly $3 billion the state spends every year on transportation.
When considering North Carolina’s transportation budget, it is best to start at the beginning: the source of the money. Nearly two-thirds of the state’s transportation spending comes from the Highway Fund.1 The fund started in 1921 with the creation of North Carolina’s first ever gas tax. The Highway Fund was established primarily to support highway construction and maintenance, then later began financing the State Highway Patrol and the Division of Motor Vehicles.
The other third of the state’s transportation funding comes from the Highway Trust Fund. The HTF is focused on financing North Carolina’s intrastate highway system, urban loops and local secondary roads.
In 1921 the state’s first gas tax was a penny per gallon2 and supported highway construction and maintenance.3 The current rate is 32.8 cents a gallon and supports a variety of projects, many of which are not highway related.
At 32.8 cents per gallon, North Carolina has the second highest gas tax rate in the Southeast and the 13th highest rate in the country.4 To put it in perspective, NC consumers pay almost double the 16.8 cents per gallon rate of South Carolina.5 The rest of North Carolina’s neighbors get a better deal too with rates of 19.7 cents per gallon in Virginia, 21.4 in Tennessee, and 20.8 in Georgia. Florida is the only state in the region that charges more, at a rate of 34.4 cents per gallon, and it doesn’t have an income tax.
The gas tax in North Carolina is partially tied to the price of gas. The tax consists of a flat rate of 17.5 cents per gallon, plus 7 percent of the wholesale price of fuel. So when gas prices go up, taxpayers pay more at the pump.
Several years ago, with gas prices on the rise, the state legislature implemented a tax ceiling, ensuring that the gas tax would not go above 29.9 cents a gallon, no matter the price of gas.
In 2009, the price of fuel fell, meaning less revenue for state government. Rather than let the tax fall with the price of gas, lawmakers turned the ceiling into a floor; ensuring that the state would make at least 29.9 cents on every gallon of gas sold in North Carolina. This move might have made sense if the money was going to meet the demand for more roads in high traffic areas, but in reality the opposite is true.
Today revenues from the gas tax fund projects like drivers education for teenagers ($34 million), ferries ($41 million), visitor centers ($400,000), bike paths ($1.1 million), and even transportation services for trade shows ($1.2 million).6 These kinds of transportation themed expenditures don’t fit with the original goal of the tax which was to place the burden of highway maintenance on users. Bike paths might be a worthy expense, but they should be paid for with local government funds rather than come out of money specifically designated for state highways.
Furthermore, the state’s method of allocating gas tax revenue— the part that does get spent on building and maintaining highways– doesn’t do a very good job of putting the money where the need is. The state’s equity financing formula allocates money by region rather than by need. Because of this formula, some rural parts of the state have unused four lane highways while cities like Raleigh and Charlotte have problems with highway congestion and are struggling to keep up with maintenance and population growth. North Carolina started using the formula in 1989 and more than 20 years later it is clearly not an efficient way to allocate the state’s highway funds.
Cutting non-highway projects and changing the allocation formula could save the state millions of dollars. Cuts don’t have to mean abandoning all that previous investment in highway infrastructure—the right priorities will actually allow the state to spend more on roads where they are needed and provide tax relief to citizens in the form of lower gas taxes.
The new majority in Raleigh’s General Assembly ran on a platform of fiscal responsibility and keeping down taxes. There is ample opportunity to fulfill these promises when it comes to transportation spending.
1 http://www.ncdot.org/about/finance/
2 http://www.dornc.com/taxes/motor/rates.html
3 http://www.ncdot.org/about/finance/
4 http://www.api.org/statistics/fueltaxes/upload/Gasoline_Diesel_Summary.pdf
5 Rate data from 1/1/11 American Petroleum Institute report. http://www.api.org/statistics/fueltaxes/upload/State_Motor_Fuel_Excise_Tax_Update.pdf
6 http://www.nccivitas.org/2008/cutting-gas-tax-proposal/
Posted on February 3, 2011 by Taylor Holgate in Economy
