North Carolina’s FY 2010-11 State Budget: Transportation

The 2010 Budget
Introduction
General Government
Public Education
UNC System
Community Colleges
Justice and Public Safety
Health and Human Services
Transportation
Natural and Economic Resources

The 2010-11 State Budget establishes the N.C. Mobility Fund. The Mobility Fund will be dedicated to road projects of a “statewide significance,” but does not establish any mechanism or authority for how these projects are selected and how the Fund’s distributions will be monitored.

The Fund will initially be financed by diverting $46 million that was scheduled to be transferred from the Highway Trust Fund to the state’s General Fund. The $46 million is roughly half of the amount included in Gov. Perdue’s proposal. The key difference is that the final budget does not include the $75 million worth of increased motor vehicle registration fees favored by Perdue.

Furthermore, the final budget rejected a proposal in the House’s budget plan that would have prompted the Ferry Division to raise user fees in order for the Division to become largely self-sustained. Instead, the budget increases the amount appropriated to the Ferry Division from the Highway Fund by $11.3 million, bringing the total subsidy required to cover the Ferry Division’s operating costs to $43.5 million.
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:

• $11.3 million in additional funds to support operating costs for North Carolina’s Ferry Division. The total appropriation out of Highway Fund dollars will come to $43.5 million for the state’s ferry services.
• $500,000 to pay for two state aircrafts,  three pilots and one mechanic being transferred from the Department of Commerce to the Department of Transportation’s Aviation Division
• $32 million to partially restore funding for the Driver Education program. The program’s funding had been temporarily taken off the 2010-11 budget pending a continuation review

Reductions:

• $4.4 million decrease in funding for maintenance of the State’s highway infrastructure
• $1.9 million in savings from eliminating 30 DOT positions vacant prior to Jan. 1, 2010