John Hood: Time to fix our interstates
Here are recommendations for how state can do it
RALEIGH — I’m a strong advocate for the user-pays principle in transportation. As much as possible, those who use a particular asset — be it roads, airports, seaports, or railroads — ought to pay in rough proportion to the operating and capital costs they impose.
For the most part, that’s our current policy. Surcharges on airfares pay the cost of operating North Carolina’s airports. Users pay to ship freight by port or rail. Motorists finance the vast majority of the cost of the state’s automotive transportation system by owning and operating personal or commercial vehicles (which represent about 80 percent of the total cost of the system) and paying taxes on cars and motor fuels (to cover the other 20 percent, mainly roads and bridges).
Only in the case of transit service is there is a substantial subsidy from non-users. There are also some inequities within each system.
Freight trucks, for example, appear to put far more wear and tear on highways than the value of taxes and fees collected from their operators. In general, however, the user-pay principle guides North Carolina transportation policy.
In fact, in recent years North Carolina has extended the principle to its logical conclusion when it comes to adding new limited-access highway lanes. The southern part of the new Outer Belt around Raleigh is being partially financed by tolls collected electronically from its users.
There are other toll-road projects being considered elsewhere in the state, including some bridges on the coast and new lanes on I-77 north of Charlotte.
While I favor tolls as a useful tool for adding capacity, it isn’t suited for every job. It is possible, for example, that some of the proposed toll projects may not reduce congestion and increase safety enough to justify their construction at this time. After due diligence, the state Department of Transportation ought to defer them in favor of higher-priority projects.
In addition, tolls should be used to add new roads or lanes, not simply to repair existing roads, and only in places where electronic toll collection is a practical option that won’t create too much congestion on alternative roads. In the case of North Carolina’s long-troubled section of I-95, which stretches from Northampton County to Robeson County in the eastern part of the state, tolling may prove viable in some places but probably not in others.
According to a new comprehensive transportation study conducted for my organization by the Reason Foundation and the Hartgen Group, refurbishing and modernizing I-95 is “vitally important to the state’s economy and the coastal plain in particular.” The long-term price tag could be in the billions. The work need not be done immediately, however. We should begin by devoting about $150 million a year to address I-95’s most critical needs.
Where can the state get the money? The new Reason-Hartgen report offers 20 recommendations for reorganizing the Department of Transportation, reshaping DOT’s priority list, increasing the use of innovative construction-delivery methods, and spending more money on maintaining the roads North Carolina already has to head off the long-term cost of repairing or replacing them. The plan includes the $150 million annual reserve for fixing I-95 while foregoing lower-priority projects, so it actually achieves a net savings of $21 million a year.
That would be a good start. We can accelerate the process further by ending the annual transfer of some $200 million a year in gas and car taxes to the state’s General Fund budget.
While these transfers may have been justified years ago, either to replace lost sales taxes or finance some programs, it’s time for them to end. We should dedicate the money to maintaining and expanding North Carolina’s critical transportation arteries, including I-95 and other interstates.
Via tolls and current auto-related taxes and fees, motorists can cover the cost of a better, safer, and less-congested system as long as the state sets firm priorities and embraces new ideas. It would be a good investment in North Carolina’s long-term economic health.
John Hood is president of the John Locke Foundation, which has just published “First In Freedom: Transforming Ideas into Consequences for North Carolina.”