A Formula for Roads (John Locke Foundation)
By John Hood
April 08, 2010
RALEIGH – If North Carolina lawmakers continue to eye the state transportation budget like greedy kids spying a basket of candy, they’ll continue to grab and squabble. As JLF adjunct policy analyst Dave Hartgen observes in a new Spotlight briefing paper, policymakers need to look at the issue from a different perspective – as members of an investment pool seeking the highest possible rate of return.
Building transportation infrastructure is an investment activity. In rough proportion to their use of state roadways, motorists pay car and gas taxes into the Highway Fund and Highway Trust Fund. Officials are charged with investing some of the money in adding valuable new capacity to the system, saving the rest for maintaining the value of the existing capital stock.
Unfortunately, so many hands touch the capital flow that it becomes diluted. Transit boosters want to force non-riders to subsidize the trips of transit riders. Governors want to do favors for their biggest supporters and friends. Legislators want to maximize the flow of funds into their districts as a means of buying votes, with the more-senior members having the greatest opportunities to do so. The private firms that design, build, and supply raw materials for new projects want to maximize their revenues. City and county officials want to move their local projects to the top of the list.
At a legislative committee meeting yesterday, many of these individuals or interests paraded past the microphone to restate their wants. Few offer a coherent, objective assessment of the state’s true transportation needs.
Hartgen did so in his new research paper. Rather than focus on divvying up highway funds by region, Hartgen argued that North Carolina needs to focus on projects, wherever they are located, that promise the greatest bang for the buck in alleviating traffic congestion and improving safety. The need is pressing, because:
• Roads of inadequate quality and capacity reduce the incomes of North Carolina citizens by billions of dollars a year in lost time, lost fuel, and vehicle repairs.
• Achieving a significant reduction in future traffic congestion alone would boost the state’s economy by nearly $1 billion a year.
• Reallocating existing revenues to address the state’s highest priorities is a more realistic approach than trying to tax our way out of the problem, since North Carolina’s transportation-related taxes are already high by regional standards.
The conventional wisdom in Raleigh appears to be is that North Carolina needs to raise taxes and change the equity formula to steer more dollars to urban areas such as Charlotte and the Triangle. It’s not so much the wrong answer as it is the wrong phrasing of the question. If policymakers used current and projected traffic counts to allocate highway dollars, some counties would gain projects and some would lose them. But North Carolinians do not confine their driving within county lines. They travel from city to city, region to region – or, at least, the products they consume travel across the state in trucks. Most North Carolinians would benefit from projects that alleviate congestion and improve safety along highly traveled corridors, be they around the southern side of Wake County or a stretch of rural interstate in the foothills, sandhills, or coastal plain.
Tossing a pot of money into the basket and watching immature politicians fight over it may be entertaining, but it’s not a transportation policy worthy of the name. Maybe some grownups will get involved at some point.
Hood is president of the John Locke Foundation
