Carolina's Road to Improvement | Eastern North Carolina Now

   Publisher's note: The article below appeared in John Hood's daily column in his publication, the Carolina Journal, which, because of Author / Publisher Hood, is inextricably linked to the John Locke Foundation.

    RALEIGH     In my forthcoming book on North Carolina's economy, Our Best Foot Forward, I discuss at length the role that transportation has played in the state's economic history. I also propose reforms that will increase the productivity of government investment in highways and other infrastructure.

    Politicians and activists tend to think of the issue primarily in terms of budget totals. That's a mistake. There is no consistent relationship between government capital spending and outcomes such as accident rates, traffic congestion, and economic growth. Some states and localities spend their money well. Others spend it poorly.

    When it comes to infrastructure, North Carolina certainly faces some major challenges. According to federal data, for example, 61 percent of our urban interstates are congested. That's the ninth-worst congestion rate in the country. We have the 10th-highest share of bridges rated as deficient and rank above the national average in the share of rural roads in bad condition. Not coincidentally, we are also higher than average in highway fatalities per miles traveled.

    On the other hand, while North Carolina has some obvious deficiencies, we don't compare poorly in every infrastructure category. In its latest nationwide study, the American Society of Civil Engineers gave North Carolina a C- in infrastructure. That's certainly nothing to brag about, but it was slightly higher than the national grade of D. Not surprisingly, North Carolina ranked poorly in bridges and roads. But we matched or exceeded the average national grade in aviation, water and sewer systems, rail service, and school facilities. We ranked particularly high in drinking-water service, a B- vs. a national average grade of D -.

    How many times have you heard that North Carolina has the largest network of state-maintained roads in the country? The statement is true but often misunderstood. It does not mean that North Carolina leads the nation in road mileage per driver or in government spending on roads. What it simply means is that, unlike much of the rest of the country, North Carolina has no county road systems. Our cities do administer the state roads in their jurisdictions, and often supplement highway revenues from the state with local bonds or property taxes. But in relative terms, North Carolina leans heavily on state rather than local responsibility for roads.

    If you combine state and local spending together, we rank below the national average in highway investment, both in per-capita terms and as a share of personal income. Fiscal conservatives, please take note: that also means that North Carolina ranks below the national average in highway-related taxes and fees. We have the sixth-highest state tax on motor fuels, certainly, but in other states local property taxes, both on vehicles and real estate, play a much more significant role in road finance than they do in North Carolina.

    That's not an argument for raising North Carolina's gas tax in order to generate more revenue for bigger highway budgets. First off, North Carolina governments need to do a better job of spending the taxes and fees they already receive. And to the extent additional revenue is needed for new highway capacity, electronic toll collection and other direct user charges are an attractive alternative.

    Fortunately, North Carolina is already heading in the right direction in both areas. In the case of road and bridge conditions, they have actually been improving since the turn of the 21st century. While 61 percent of our urban interstates are congested, for example, the rate was 75 percent as recently as 2002.

    With regarding to highway finance, the General Assembly enacted legislation in 2002 to authorize new toll roads. The first stretch of the $1 billion Triangle Expressway is already in operation, with thousands of daily users paying tolls either through transponders or camera-based billing. There several more potential tollways in the planning stages, including four Charlotte-area projects: the Monroe Connector to the southeast, the Garden Parkway to the west, new toll lanes on the southern section of I-485, and converting a carpool lane to a highway-occupancy toll (HOT) lane on I-77 north of the city.

    There are many things left to do - and many potential benefits to North Carolina's economy from doing them. More on that in a future column.