Gov. Perdue’s 2010-11 Budget Recommendations: Transportation

Governor Perdue’s total proposed FY 2010-11 budget for Transportation is $2.8 billion. This includes a $7 increase (from $28 to $35) in annual registration fees for cars and light trucks.

Perdue’s new budget would establish the NC Mobility Fund within the Highway Trust Fund. The Mobility Fund will not be included in the Equity Formula, rather provide funds for projects of “statewide significance” including aviation, ports, transit, and rail. The Fund would be financed by increased Department of Motor Vehicle fees (most notably, the $7 increase in registration fees) along with the Highway Trust Fund retaining $22 million of the annual transfer from the Highway Trust Fund to the General Fund and diverting it to the new Mobility Fund.

Who will select the NC Mobility Fund’s projects and how will the funds be monitored in distribution? Perdue’s budget is unclear.

The transportation budget consists of two components: the Highway Fund and the Highway Trust Fund. The Funds are primarily financed through the state gas tax, a sales tax on vehicle sales and various licenses and fees levied by the Division of Motor Vehicles.

Major expansions and reductions include:

Expansions

• $94.6 million to establish the NC Mobility Fund. Revenue for the fund will come from $72.6 million in increased motor vehicle fees and diverting $22 million from the annual transfer from the Highway Trust Fund to the General Fund
• $4.3 million spending expansion to the Rail Division for construction of the Pembroke Northeast Bypass project to ensure improved multi-modal access to southeast North Carolina
• $33 million to restore funding for the Driver Education Program. The funding had been cut in last year’s biennial budget pending a continuation review of the program

Reductions

• The $22 million being retained from the annual transfer to the General Fund to help establish the Mobility Fund counts as a spending reduction as it reduces the amount appropriated to the General Fund