New idea to avoid tolls on NC's highways...too little too late?

Recent days have seen some interesting comments regarding transportation funding from NC Senator Jeff Tarte.  Here's one from his Facebook page.  The comments revolve around funding sources allowing the state to avoid tolls on our roads. 

I've got to say, there is a good bit I like about this idea of dedicating new revenue to these seemingly intractable problems.  It's out of the box thinking which is always a good thing from our elected officials.  I particularly like the notion of dedicating revenues from physical, State resource like oil, gas, and wind(?) to physical, State resources like infrastructure.  It reminds me of something the Town of Davidson did recently where it dedicated money from selling some right of way for a gas pipeline towards future improvements for town greenways.

However, there is a part of me that always asks "why"?  Why bring this up now?  Why start floating ideas for alternate funding sources to avoid tolls when the date for signing the I77 HOT lanes contract looms right around the corner to implement tolls?  Could it be that the finances are not working out as "critics" of the HOT lanes plan have been saying all along?  Could it be that toll operators need more money to make their schemes work?  Senator Tarte sent out an email just days before the last election assuring people this was not the case and that NCDOT's General Trogdon had told him the numbers "do work".  (Of course that was just days before the good General went to work for a pro-toll company, so take that for what it's worth.)

For a long, long, time now we've all been told that tolls were the only way we would ever get the widening of I77 done in the next few decades.  Is Senator Tarte's idea really a solution that allows us to avoid tolling a widened I77 in the next few years?  At this point the only way for us to know would seem to be the demise of the HOT lanes plan before signing a 50 year contract next spring. 

Senator Tarte has not been what you'd call a strong opponent of the HOT lanes plan for tolls on I77.  He has not been out there fighting its implementation.  If this idea is workable, it would have been a great one to throw out there and fight for as the HOT lanes plan was being steamrolled forward.  So in some ways, this idea may be too little, too late.  But in the off chance it sees the light of day at the Legislature, let's take it at face value and look at what challenges it might encounter.

Specifically, is there enough money to make a difference and who else in state government wants to sink their teeth into it?

Recent numbers from industry lobbyists indicate as much as $4 billion could come to North Carolina from offshore drilling alone.  That sounds like a lot, but spread over a long period of time and with an uncertain starting point it's likely not enough money to make a huge dent the road funding problem. To make the numbers truly work for roads, let alone education, the legislature would likely need to significantly increase the severance tax paid by drillers.  Currently, ours is the lowest in the country and to create a truly significant income stream, it likely needs to increase.  From the DENR's 2012 study on the impacts of expanded energy exploration:

"North Carolina’s Oil and Gas Conservation Act currently sets the state’sbseverance tax for natural gas at 5/100 of a cent – $.0005 per 1,000 cubic feet of gas. The revenues can only be used to pay the costs of administering the law. North Carolina has one of the lowest severance taxes in the nation. With the exception of those states that do not assess any severance tax, North Carolina’s tax rate was the lowest of all states for which severance taxes were identified as part of this study."

Those same industry lobbyists that are promoting energy exploration will likely fight any increases to these taxes and fees.    Putting forward a bill recommending the significant increase of this tax to compare with that of a state like Texas would be a real indication that the North Carolina is serious about creating an income stream to meet the scope of these problems.

Once that money is raised, for Senator Tarte's idea to work it looks like it would have to get in line behind ideas from other powerful state interests.  From that same Department of Environment and Natural Resources study, the DENR made these two funding recommendations:

1. Provide funding for any continued work on the development of a North Carolina regulatory program for the natural gas industry.

 

2. Address the distribution of revenues from oil and gas excise taxes and fees to support the oil and gas regulatory program, fund environmental initiatives, and support local governments impacted by the industry.

These recommendations were codified in S76 - Domestic Energy Jobs Act. which passed earlier this summer as the HOT lanes debate went into high-gear locally.  This bill dedicates energy industry revenues to such things as preserving "cultural heritage and quality of life".  Good things to be sure, but probably not things in line with spending money on roads or even education - meaning implementing Senator Tarte's idea would require additional legislation.

And the DENR is not the only one that has it's eye on this pot of money.  Our State's Commerce Secretary also want's a piece of it to create a "slush fund" similar to Texas's for economic development incentives to recruit businesses.  

I commend Senator Tarte for throwing out ideas.  It takes significant ideas to make significant changes.  However, for this idea to work it will require a huge effort to corral the needed revenue and then fight off the sharks that will certainly be circling.