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How to pay for roads

How can North Carolina pay for the construction and maintenance of roads in the future?

The North Carolina Future Investment Resources for Sustainable Transportation (NC F1RST) Commission is looking for ways to ensure North Carolina can continue to build and maintain the roads it needs. Patrick McHugh of the NC Budget and Tax Center and I spoke to the NC F1RST Commission last week about our shared principles and areas of disagreement on the current system and future funding. John Hood has echoed the core principle on which we largely agreed:

As our state continues to grow and develop, we will need to have transportation revenue and expenditure systems that keep up with demand and produce high value for every dollar invested. As much as possible, they should follow the benefit principle: the more you use, and the more you use during periods of peak demand, the more you should pay.

The gas tax has been a reasonable proxy for usage. It provides 40% of the $5 billion in state transportation revenue. The federal gas tax provides another 24%. As cars become more efficient and electrics and hybrids make up a larger share of vehicles on the road, the gas tax will be provide less revenue even as it becomes more of a burden on people with lower incomes.

Tolls have not been popular. Other ways to track mileage raise privacy concerns. The gas tax is less of a burden to pay or collect than other taxes. The future of transportation funding is an open question, but at least we agree broadly on the goals.

Joseph Coletti / Senior Fellow

Joe Coletti is a senior fellow at the John Locke Foundation focused on fiscal policy issues. He previously headed the North Carolina Government Efficiency and Reform initiativ...

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