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Governor Announces New Transportation Funding Model

April 18, 2013

Governor Pat McCrory this morning announced a new model for transportation funding in North Carolina, describing a proposed Strategic Mobility Formula that the Governor and members of his cabinet said would allow the State to undertake more transportation projects, create more jobs, and enhance North Carolina’s economic competitiveness.

The plan does not raise any additional transportation revenue and does away with the current Equity Formula used to distribute transportation dollars. In its place, the Strategic Mobility Formula would divide transportation revenues among State, Regional and Division tiers and allocate those revenues based on a combination of data-driven criteria and local input. Here is how the revenue allocation and project selection criteria break down:

·         State

o   Revenues:  40 percent ($6.4 billion over 10 years)

o   Project selection: 100 percent data-driven (based on such criteria as reduced travel time, project cost, big city/small town connectivity, economic competitiveness, congestion, etc.)

 

·         Regional

o   Revenues: 40 percent ($6.4 billion over 10 years), distributed among 7 regions on a per capita basis

§  Note: The 7 regions consist of paired NCDOT districts, a map of which can be found here

o   Project selection: 70 percent data-driven, 30 percent local ranking (from area planning organizations)

 

·         Division

o   Remaining 20 percent of revenues ($3.2 billion over 10 years), shared equally across the 14 transportation divisions

o   Project selection: 50 percent data-driven, 50 percent local ranking

 

Additional information from the N.C. Department of Transportation is available here, including a Fact Sheet and Frequently Asked Questions. That information notes that the Powell Bill supplement from the Highway Trust Fund will be discontinued as part of this plan, but that the total Powell Bill amounts going to municipalities will be held harmless under this new program. This change could affect the Powell Bill’s growth rate, though. It also states that local officials can influence project decisions at the statewide level “by agreeing to help fund those projects by supplementing the state funds that will be required to construct their priority projects.”

All modes of transportation would compete for funding within each tier under the proposed formula. NCDOT Secretary Tony Tata said the Strategic Mobility Formula would allow for more local input on transportation projects. He said local organizations would be able to nominate projects at all three levels (State, Regional, and Division) and that the criteria would tell where the greatest need for the money was.

Tata emphasized the jobs components of the Strategic Mobility Formula, which he said over the next 10 years would allow the state to take on 85 more transportation projects than it otherwise would have and would create over 240,000 jobs as compared to 174,000 under the current system. He noted that while the state’s population is projected to grow by 1.3 million people over the next 10 years, the state is also facing a $1.7 billion decrease in transportation revenues.

“We can no longer rely on workarounds to address statewide transportation issues,” Sec. Tata said.

The Strategic Mobility Fund would require legislative approval for it to go into effect. Both Speaker of the House Thom Tillis and Senate President Pro Tempore Phil Berger appeared at the press conference to announce the plan this morning and expressed their desire to work with the Governor to pass the plan in the General Assembly.

The League has been and will continue to be working with legislators and members of the Governor's staff on the legislation that would implement the Strategic Mobility Formula. We will have more information on this proposal in tomorrow's LeagueLINC Bulletin and as further details become available. Check back with the League's website frequently and follow the League on Twitter @LeagueLINC for the most up-to-date information available.

Posted on April 18, 2013 by Chris Nida