North Carolina’s transportation infrastructure is vital to supporting market access and economic growth, enhancing public safety and improving the overall quality of life of our citizens. In recent years, the NC Chamber Foundation’s research has informed significant transportation infrastructure funding reforms. As the state experiences explosive growth, more work is needed to create comprehensive and sustainable transportation funding for North Carolina, and data is essential to informing the solutions.

Released earlier this month, TRIP’s “Keeping North Carolina Mobile” report examines the condition, use, safety, and efficiency of North Carolina’s surface transportation system and the impact of additional transportation funding.

In this month’s Foundation Forecast, NC Chamber Foundation Sr. Director of Infrastructure Competitiveness Dana Magliola reports on this new data on the condition and funding of our state’s transportation network.

Meredith Archie
President
NC Chamber Foundation 

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New Report Points to Need for Additional Transportation Revenue and Investment

North Carolina’s growth has historically been tied to industrial and commercial development supported through the development and expansion of modern infrastructure. Earning the moniker “the Good Roads State,” North Carolina has continued to invest in infrastructure, and today the North Carolina Department of Transportation maintains more than 80,000 miles of roads, second only to Texas in this metric.

However, the role of infrastructure as a major factor in North Carolina’s economic competitiveness is at risk due to a multitude of factors, including population growth, inflation and increasing construction costs, and shrinking funding sources and unsustainable funding mechanisms. In its recent annual report, The Road Information Program (TRIP) provides an up-to-date perspective on the state of surface transportation infrastructure in North Carolina and draws attention to these issues of concern. The report also provides insight and information into freight movement in the state, congestion and the economic impact of delays on commerce.

In its 2024 report, TRIP states that “from 2000 to 2019, annual vehicle miles traveled (VMT) in North Carolina increased by 37%, the fifth highest rate of growth in the U.S., from approximately 89 billion miles traveled annually to approximately 122 billion miles traveled annually.” Following the significant decline of vehicle miles traveled during the COVID-19 pandemic, “by 2023, North Carolina’s overall VMT levels had rebounded to 2% below 2019’s pre-pandemic levels.” The upwards trajectory of VMT in North Carolina will continue as the state gains more than 140,000 people annually, outpacing population growth for all US states except Texas and Florida.

(Source: North Carolina Office of State Budget and Management, December 2023)

With increased population and activity on our roadways comes increased wear and tear on our surface transportation network. According to the TRIP report, 37% of North Carolina’s roads rate in poor or mediocre condition while 25% rate in fair condition and the remaining 38% are in good condition. As roads and bridges deteriorate, the impact can be seen not only in the degradation of levels of service, but in the downstream maintenance costs borne by North Carolina drivers. These Vehicle Operating Costs (VOC) result in more than $5 billion additional costs or an average of $633 per driver.

For bridges in particular, the picture is a bit more optimistic with only 7% of the state’s bridges rating poor or structurally deficient. 52% of North Carolina’s bridges are in fair condition while 41% of the nearly 19,000 bridges statewide are considered to be in good condition.

 

One of the most pressing challenges articulated by the TRIP report, and no surprise to those following infrastructure investment and development in North Carolina, is the uncertainty of funding for future infrastructure investment and current infrastructure maintenance and management. According to the Federal Highway Administration, national highway construction labor and materials costs increased by 43% in 2023 and by nearly 70% since the beginning of 2021.

Another key issue for the funding of infrastructure remains the downward trajectory of gas tax revenues. As automobiles increase in fuel efficiency, previously predictable revenues are in question. Combined with the impact of inflation, North Carolina must come to terms with the long-term sustainability of the current infrastructure funding model.

However, it’s not all doom and gloom as the last few years have seen an unprecedented level of federal funding made available to states to support infrastructure development. The Infrastructure Investment and Jobs Act (IIJA) passed in 2021 increased federal funding by nearly 30%, and North Carolina has aggressively pursued these and other federal funding to bolster infrastructure planning and construction. The IIJA will infuse $7.2 billion into North Carolina’s infrastructure over the next five years.

In 2022, Foundation-led research informed efforts to transfer a portion of statewide sales tax revenue to support highway and road projects. By FY2024-25, these receipts are anticipated to provide an additional $710 million in highway funding.

Despite the increases in funding available in the short and near-term, addressing the long-term framework for funding transportation infrastructure will remain a pressing question for North Carolina policymakers and key focus of the NC Chamber Foundation’s work.

Transportation infrastructure effectively facilitates market access locally, regionally, and globally. On this network, freight itself is the physical manifestation of economic activity, and North Carolina’s economic activity is experiencing unprecedented growth. By 2050, freight movement on North Carolina’s surface transportation network is expected to grow by 64% by weight and by 97% by value. This growth will support economic development statewide, but freight movement is often hindered by congestion on the roadways. According to the report, congestion and bottlenecks cost North Carolina drivers $4 billion annually in lost time and fuel expenses. Urban centers in Charlotte and the Triangle lead all regions in total hours of congestion and cost to drivers.

 

Another key consideration to better understand the current state of North Carolina’s surface transportation infrastructure is safety. According to TRIP, nearly 7,900 people were killed in North Carolina between 2019 and 2023, an increase of 20%. This disconcerting metric represents an annual average of more than 1,500 fatalities each year, a rate higher than the national average. Increased investments in traffic and safety management operations will undoubtedly make a positive impact on the state’s safety profile.

The 2024 TRIP report, “Keeping North Carolina Mobile,” provides additional data and insight into these key challenges facing North Carolina’s surface transportation infrastructure ecosystem. The findings of this report reinforce just how important it is to continue our investment in infrastructure, our pursuit of sustainable funding mechanisms for future infrastructure investment, and our use of technology, innovation, and new ideas to ensure North Carolina maintains and grows the competitive advantage that infrastructure provides.

For more information about the TRIP report including a download of the full report, visit the TRIP website here.