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The State of Transportation in North Carolina: Updates from the NC Chamber’s Transportation & Infrastructure Summit

| Infrastructure

North Carolina’s transportation infrastructure is a critical component of ensuring our state is a top place to live and work, and there is still much work to be done to continue to meet the mobility needs of our fast-growing state in an increasingly competitive business environment. 195 industry leaders from across the state gathered last week at the NC Chamber’s annual Transportation & Infrastructure Summit to discuss the state of transportation in North Carolina.

NC DOT Funding:

North Carolina Board of Transportation Chairman Michael Fox reported that NC DOT finances are strong despite lost revenue due to the COVID-19 pandemic and the impacts of inflation. However, he noted that current revenues will not keep pace as we look to the future.

NCDOT’s Construction Cost Index (“CCI”) measures how inflation impacts costs over time. Fox shared that this number has increased at an average rate of 4.5% per year since 2021. In 2022, the CCI was at a level of 190, meaning that the Department would need to spend $1.90 today to equate to a dollar spent in 2012. Identifying additional, modernized revenue streams will be critical to funding necessary investments in North Carolina’s transportation and infrastructure systems.

Transportation Funding Modernization:

Currently, North Carolina’s transportation funding relies heavily on the gas tax. Fluctuation in this tax makes funding for transportation infrastructure volatile and unsustainable in the future due to the increasing vehicle fuel efficiency and electric vehicles. Continuing to place such a heavy emphasis on the gas tax will prevent us from meeting demand in the not-to-distant future. Continued funding diversification that establishes predictable sources of revenue was top of mind for Summit speakers and attendees.

Joe Milazzo, executive director of Regional Transportation Alliance, spoke about one such proposal to modernize transportation funding in the form of a vehicle registration-based access user fee, which would charge a flat and consistent user fee for all drivers regardless of the number of miles driven. Learn more about this concept here.

John Drake, vice president of transportation, infrastructure, and supply chain policy at the U.S. Chamber of Commerce, shared about another concept, the mileage-based user fee, which would instead charge drivers based on the number of miles driven.

The NC Chamber will continue to champion the Access User Fee concept and any other idea that creates conversation on how to sustain the transportation system of the future without the gas tax.

Ports, Rail, and Airports Update:

Brian Clark, executive director of the North Carolina State Ports Authority, Carl Warren, president of the North Carolina Railroad Company, and Kevin Baker, executive director of the Piedmont Triad Airport Authority, provided updates on  long-term plans for port, rail and air transportation in North Carolina. All three speakers noted that permitting and project delays are the biggest challenges as they sometimes face 10+ year lead times for projects that need to be completed much sooner.

The group also spoke to the importance of improving the roads in and around port, rail, and air terminals. Continuing to invest in this infrastructure is critical to efficiently moving increasing numbers of imported and exported manufactured goods across our state, country, and world. The group pointed to the importance of intentional planning not only around these critical transportation hubs but also around megasites in our state in order to allow for exporting goods made in North Carolina.

The NC Chamber would like to thank those who joined us for these important conversations. View our 2023 Legislative Agenda to learn how the NC Chamber will advance bold solutions to the transportation funding challenges facing our state, and sign up to receive the NC Chamber’s latest transportation and infrastructure updates.