House Budget Includes $1.4 Billion for Toll Roads
So often in this debate we’ve heard elected officials say we need to find new sources of funding for roads. With vehicles getting better fuel economy, gas tax receipts are projected to decline by about 2% annually. And with more people moving to the state, the strain on our infrastructure will be even greater.
Before we get to the budget, we need to point out something: there is but one source of funding for roads. It’s us- the people- who ultimately pay. Whether that comes from taxes or tolls, it’s still pulled from the same wallet. For the I-77 HOT lanes, NCDOT officials tout “we’ll get $3 of infrastructure for every $1 we spend” because a private company is putting up the difference.
This is simply not the case. The private companies are not donating anything- they expect to be repaid with interest. In the end, if there’s $3 of infrastructure spent, we’re the ones paying for it. So the issue is not finding “new sources of revenues,” but rather using the one source we have most efficiently.
Which brings us to the recently passed house budget. Buried in the back are a couple of line items for the Turnpike Authority (NCTA), the entity chartered with building toll roads. For the 2013-2014 fiscal year, they’re slated to receive $154M. For FY 2014-2015, the number is $1.4 billion.
This is a staggering number, especially in light of the fact that fuel tax receipts in 2013 are projected to be around $1.8 billion in total. How are we able to fund $1.4 billion for toll lanes alone?
The answer is, in a word, debt. The budget shows a line item of $1.4 billion for “requirements,” and right below it another line item for $1.4 billion in “receipts.” So the plan is, starting in July 2014, the state will issue toll revenue bonds in the amount of $1,404,739,602.
This is in addition to the $788 million in debt the NCTA issued last year. How efficiently has the NCTA used that borrowed money? The first (and only) project they’ve completed is the Triangle Expressway, at a cost of $1billion. In 20 years it is projected to carry half the traffic I-77 does today. You can read more about it here, but suffice it to say if we’re in a funding bind we should not be spending a billion dollars on a road few people use.
Above all, let’s remember tolling- and the debt issued to enable it- is not a “new source of funding for roads.” Rather, it’s putting it on our children’s credit card.
Update: spelled out “billions” and “millions” to avoid any confusion.