Remarks for Secretary Lyndo Tippett
Greensboro and High Point Chambers of Commerce
2006 Transportation Summit
Tuesday, Nov. 28, 2006 at 4 p.m.
High Point Chamber of Commerce
Introduction
Good afternoon.
I want to thank Pat Danahy for inviting me to share with you the current outlook for transportation in North Carolina.
First I want to commend this group, especially the program sponsors, for taking such an active role in this county's development by holding this annual event.
Your input and involvement have made a tremendous difference in the quality of life in the Greensboro and High Point communities.
Because of your extraordinary efforts, Guilford County - like most of our state - is becoming an increasingly popular place to live and work.
Guilford County Construction Projects
The North Carolina Department of Transportation is currently working on several highway projects to help accommodate this surge in population and help reduce traffic congestion in the Triad.
Two of the main projects currently under construction compose the Greensboro Western Urban Loop, which stretches from I-85 near Groometown Road to north of Bryan Boulevard.
The loop will open next summer and offer motorists traveling along I-85 a more direct route to the Piedmont-Triad Airport and northern Guilford County, which should help reduce traffic along I-40.
We are also beginning construction on the Greensboro Eastern Loop from U.S. 70 to U.S. 29 in 2011, nearly completing the Greensboro Loop.
In addition, construction of the High Point East Belt will begin in spring 2007. This route will connect the new U.S. 311 - completed in 2005 - to I-85 north of Archdale and will be a major artery in the future I-74 corridor.
This is truly an exciting time of growth and development for both cities.
And while rapid growth is a good thing in many ways, it is steadily increasing the transportation demands of our state and stretching our limited financial resources.
The Problem of Growth
To put this growth in perspective, let me give you some recent statistics:
· North Carolina's population grew from 5 million in 1970 to 8.5 million in 2004, and is expected to grow by 4 million more people in the next 25 years- making us the seventh largest state in the country.
· Vehicle miles traveled more than tripled, from 30 billion in 1970 to 94 billion in 2004, and are expected to increase 50 percent more by 2020.
· Truck freight hauled in North Carolina is projected to increase to 808 million tons by 2020, a 190-percent increase since 1998.
Many of the state's highways were built as farm-to-market roads and were not designed or built to handle the heavy traffic volumes they carry today. As a result, an increasing number of the state's most important corridors need significant upgrades.
Other Contributing Factors to NCDOT's Funding Difficulties
There are several factors besides growth that make this situation especially challenging for North Carolina.
In North Carolina, unlike many other states, a major portion of the burden to fund local transportation improvements rests on the state level rather than the local level. We have more than 79,000 miles of state-maintained highway. Only Texas has as many.
According to a recent census report, North Carolina ranks 19th nationally in per capita highway spending on the state level, but only 49th in those same expenditures on the local level.
Construction inflation continues to increase ¾ by about 45 percent over the last three years
alone - making it more costly for us to complete needed projects. Unfortunately, these costs are continuing to rise.
Meanwhile, we are also dealing with a drop in revenues.
Our primary source of income is derived from the state's gas tax. However, in recent years as cars have become more fuel-efficient and people are driving less, the gas tax is simply not pulling in the same level of revenue it once did.
We also collect less money through highway use taxes and fees than many other states.
For example:
· Georgia's current state gas tax is 18.5 cents per gallon and the state maintains just over 18,000 miles of highway.
· Tennessee maintains just 13,752 miles of highway while their gas tax is 21.4 cents per gallon. Additionally, their highway use tax is 7 percent - compared to North Carolina's 3 percent.
Gov. Easley and the General Assembly recognize the strain placed on the department's budget by decreased revenues, and they built $200.7 million into this year's budget to reduce the annual transfer from DOT's Highway Trust Fund to the General Fund. They also provided an additional $18 million to the Highway Fund for maintenance.
This means that more of our transportation revenues will actually go toward transportation improvements.
Other Steps We are Taking to Improve NCDOT's Financial Outlook
Our department is looking hard at ways to help generate new funds for transportation and is also maximizing existing resources.
We are working to implement the 25-year Statewide Transportation Plan, which the Board of Transportation adopted in the fall of 2004.
At the time of its adoption, the plan anticipated a nearly $30 billion gap between transportation needs and funding over the next 25 years.
By allocating our available resources as the plan recommends, we can meet more of the state's needs, particularly through maintenance and modernization improvements.
However, simply shifting our money around will not solve the problem.
We are also working to identify additional and other types of funding for transportation.
Two options being explored are tolling and GARVEE bonds.
As I'm sure you know, the General Assembly has established the North Carolina Turnpike Authority to oversee the process for bringing toll roads to our state.
North Carolina is one of the few states - and the only state on the East Coast - that does not use toll financing to supplement traditional pay-as-you-go funding for highway projects.
Currently, the Turnpike Authority is authorized to develop and operate up to nine toll roads across the state. The Authority is studying a number of possibilities in central North Carolina including the Monroe Connector and the Gaston East-West Connector in the Charlotte area and the Triangle and Western Wake parkways in Raleigh-Durham.
The state cannot toll existing roadways, and toll facilities must have an existing parallel free route.
Additionally, and a key point to remember, is that local government support is required before a road can be tolled. Locals have to request it and sign off on it.
Another funding method the state has moved forward with is the use of GARVEE bonds, or Grant Anticipation Revenue Vehicles.
Already used by many states, these bonds allow us to borrow against future federal funding and accelerate our transportation dollars to complete needed projects sooner and reduced costs.
We have been approved to issue $950 million in GARVEE bonds, and we are currently in the process of evaluating candidate projects.
DOT has also been pursuing the expanded use of public-private partnerships to get more transportation dollars.
These partnerships allow the department to work with private entities to build and maintain mutually beneficial transportation facilities.
In addition to identifying new funding, we're also streamlining our operations and reducing contract lettings to help save money.
We are increasingly using the design-build method, which allows a project's design and construction to be completed under one contract, to reduce overall project completion time and costs.
Another way we are working to improve project delivery is through an important partnership we have in place with the Department of Environment and Natural Resources, known as the Ecosystem Enhancement Program or EEP.
Since its inception in July 2003, about 35,000 acres of valuable environmental assets throughout the state have been protected and more than $1.6 billion in road construction was facilitated without a single delay due to lack of mitigation.
The department also continues to revise our letting schedule and adjust the Transportation Improvement Program to make sure we have the resources needed to complete top priority projects.
Conclusion
I know I've covered quite a bit of information this morning, and if you take anything away with you, let it be these two points:
1) Funding for transportation is essential for the continued economic prosperity of North Carolina. We cannot continue to attract people, jobs and businesses without a high-quality transportation system that keeps pace with North Carolina's growing needs.
2) This goal is not something NCDOT can accomplish alone. We must all - including members of government, private industry and organizations like yours - work together to ensure that we have the transportation resources to sustain our state in the future.
North Carolina cannot afford to wait for transportation improvements, and NCDOT simply cannot solve the transportation funding challenge alone.
I know that you are already making this issue a top priority, and I ask that you continue to recognize just how critical transportation funding is and join in our efforts to secure additional resources for our state.
Events like this, which allow us to work together to develop transportation solutions, are certainly a step in the right direction.
I congratulate you on your outstanding efforts and thank you for inviting me to join you here today.
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