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December 03, 2007

Changing road financing

There have been two major changes in the way North Carolina roads may be financed. First, counties are now allowed to build roads, and second, roads may now be built with revenue from tolls. N.C. State University economist Dr. Mike Walden talks about what's behind these changes. Listen

"I think what's behind it is the fact that if you drive around North Carolina - and North Carolina, of course, is a very fast growing state - and particularly if you drive around in urban areas, you see congestion; you see perhaps roads not maintained to the level we would want. And of course this all comes down to money and resources," says Walden, a North Carolina Cooperative Extension economist and professor of agricultural and resource economics. "One problem with road construction and maintenance is that road costs have been increasing very fast. There is an oil component there that people may not realize in asphalt. Everything to do with construction has been going up because of the worldwide construction boom. So the cost of building and maintaining roads has been going up. And the revenues, primarily through the gas tax, have not been going up at the same rate. So there is a money crunch there. And the state has been dealing with this, and in fact, there is a new state commission that will be looking at this."

Walden adds, "But you’re right, two things have changed in the recent years that may change the way roads are done in North Carolina. One is: now for the first time counties - if they want to, they will have to decide to do this - may be able to build roads. They would have to go to their taxpayers and ask for a revenue source - perhaps in property tax - but they can build roads if they want to.

"And then secondly, North Carolina does have a toll road commission. We haven't built a road yet using tolls, but of course a toll road is a road where people who directly use that road, pay for it. So I think all of this is suggesting that we may see big, big changes down the road in how we build roads."

Posted by Dave at December 3, 2007 08:00 AM