Perdue taps two familiar sources for transportation money (News and Observer)
Published Wed, Apr 21, 2010 11:42 AM
Modified Wed, Apr 21, 2010 11:43 AM
RALEIGH Gov. Bev Perdue isn’t ready to hike taxes to meet more of the state’s transportation needs, but in her 2011 budget proposal she finds $94.6 million in “new” money from two sources the legislature has tapped in the past.
She proposes to hike Division of Motor Vehicles fees again ($74.6 million) to help establish the N.C. Mobility Fund for big transportation projects. (See today’s story – some details were cut because of space limitations.)
And she cuts off another slice ($22 million) of the controversial transfer from the road-building Highway Trust Fund that, until a few years ago, was pumping $172 million a year into the non-transportation General Fund.
The annual registration fee for cars and light trucks will rise from $28 to $35 if the legislature adopts Perdue’s recommendation.
That’s worth $48.9 million. Car owners won’t be happy about the $7 increase, especially after DMV has been so ham-handed and customer-hostile in its two-year campaign to link inspections with registration renewals.
The fee paid by insurance companies to get copies of driver license records also would rise by 25 percent, to generate $17 million. Insurance firms won’t like that. Two other DMV fee hikes are worth $6.7 million.
The Highway Trust Fund transfer was established in 1989 to compensate the General Fund for the loss of about $172 million in yearly sales taxes on cars. The car tax was replaced by a similar highway use tax on car sales, with this money going to the Highway Trust Fund instead.
It wasn’t controversial until the Easley administration and the General Assembly started raiding the Highway Trust Fund to balance the General Fund budget. Between 2001 and 2006, they took an extra $525 million from the Highway Trust Fund. Later they repaid only $125 million of this.
But – blog commenters and letter writers to the contrary – legislators and governors stopped plundering the Highway Trust Fund after 2006, and they started phasing out that annual transfer to the General Fund.
For fiscal year 2010, the General Fund received $108.5 million from the Highway Trust Fund. The other $64 million went to the N.C. Turnpike Authority, to cover gaps between the cost of three toll road projects and the money expected to be collected in toll revenues from drivers.
Starting in 2011, the Turnpike Authority will get $99 million a year in gap funding for four projects: the Triangle Expressway in Wake and Durham counties, the Monroe Connector / Bypass in Mecklenburg and Union counties, the Mid-Currituck Bridge in Currituck County, and the Garden Parkway in Mecklenburg and Gaston counties.
That would leave $72.8 million to be transferred from the Highway Trust Fund to the General Fund, but Perdue wants $22 million of this for her new N.C. Mobility Fund.
If the legislature agrees, the General Fund transfer will drop to $50.8 million a year.
And there will be more reductions in that number in coming years. Perdue wants the
yearly appropriation for her Mobility Fund to grow to $300 million a year.
If she grabs that other $50.8 million in 2012, where will she find the rest?
A gas tax hike doesn’t seem likely. But the highway use tax on car sales, lower in North Carolina than in neighboring states, looks like a sronger candidate once the economy rebounds.
You can expect political leaders to consider hiking the use tax rate, or changing the way North Carolina calculates it – which reduces the tax based on the value of trade-in cars.
But not this year.
