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January 18, 2008

Why counties will be building roads

A new law in North Carolina allows county governments to build roads, something they've not been allowed to do since the 1930s. The state and federal governments now finance all road work in the state. Will this new law gradually shift road-building responsibility to counties? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"I think it will because when you combine it with the fact that the state now caps the state gas tax at around 30 cents a gallon, what this will mean is that as inflation continues, which it will, and road costs go up, that 30 cents a gallon the state collects will buy less and less material to build roads. Therefore, the state simply won't have as much money in purchasing power terms to build and maintain roads down the line.

"So the counties will be left holding the bag, so to speak. They will be left with facing the responsibility of increasingly building more roads. And then I think the big question is, How are they going to finance that? We could, for example, have a county gas tax. That would take legislative authority, but that would be just as unpopular as the state gas tax. We could have the counties get additional authority for a new sales tax, and again that needs legislative authority. The only tax that counties have total power over is the property tax. So my forecast is that as we move along you will see more and more counties asking voters and citizens in their county to allow them to tax property more in order to finance roads in their area."

Posted by Dave at January 18, 2008 08:00 AM