North Carolinians will come to rue July 30, 2009.

That’s the day that the N.C. Turnpike Authority began spending a billion-plus dollars of borrowed money to build the state’s first modern toll road.

The 18.8-mile turnpike will cut through western Wake and southern Durham counties, providing a second, outer beltline around Raleigh and easing traffic to busy Research Triangle Park.

A debate on whether the road is needed is for another day. The problem with the highway is that it takes North Carolina into the inequitable and wasteful toll-road business.

Highway planners say they’ve solved the traffic-related problems associated with toll roads. There will be no toll booths, so motorists will not have to stop and drop their quarters. Traffic should flow and dangerous back-ups should be avoided.

The authority will collect tolls electronically. Motorists will secure transponders that signal their presence. Later, the authority will bill them by mail or deduct the toll from an existing account balance. The authority will photograph the license plates of vehicles without transponders and bill these drivers by mail.
Therein lies the first problem with toll roads: the cost of collecting revenue. Neither the administrators nor the equipment needed to operate the billing system will be cheap.

Who will do all of this work? The turnpike authority’s bureaucracy, of course. The tolls will pay for more administrators and employees who will join the current staff. And with the new bureaucracy will come all of the things on which bureaucracies waste money – press spokesmen, junkets to conferences in San Diego, etc.

Compare this with the alternative to tolls: an increase in an existing tax or fee, most likely the gas tax. The same $1 billion in construction money could be raised without requiring any new employees. There’d be no additional costs to collect the money. All of the taxes and fees North Carolinians paid would go straight to the project.

A higher tax would also be fairer. As it stands, the people who use this new turnpike will be paying all of the existing transportation taxes and the toll on top of that. People living elsewhere will not pay extra to use their roads to get to work.

Why should the rest of us care if we aren’t using this road? Because more toll roads are coming. And when they land in our backyard, we will be double-taxed while others never are. That is simply unfair, and over the years it will breed discontent in North Carolina just as it has in many other toll-road-reliant states.

RALEIGH, N.C. – When the Legislature capped North Carolina’s gasoline tax in 2006, it gave politicians something to crow about at election time to show they cared about voters’ pain at the pump. While motorists currently save about a nickel for each gallon they buy because of the cap, its loss for the state Transportation Department is much greater: $600 million.

That’s about how much less the department will have taken in cumulatively by the time the cap is scheduled to expire next June 30, compared to the amount that would have been collected had there been no cap, according to state estimates.

The department and General Assembly researchers estimate more than half of that money would have been collected this fiscal year, when record gas prices combined with the state’s variable gas tax formula would have brought in more than $400 million extra.

Lawmakers returning to Raleigh in January must decide whether to let the cap expire or extend it and find money elsewhere to pay for road construction and repair. There’s an estimated $65 billion gap between transportation revenues and needs in North Carolina through 2030, the Department of Transportation has said.

“Politically to some it would be better not to touch” the cap, said Rep. Becky Carney, D-Mecklenburg, a member of a blue-ribbon transportation funding committee meeting last week. “But there’s no money. We’re going to have to find it somewhere and it’s going to have to be in the form of a tax or fee.”

The extra money could have been used to reduce a road-building backlog that now stretches for decades. This year’s uncollected money would have been enough to cover the $316 million shortfall now projected for the Highway Trust Fund and Highway Fund this fiscal year.

The gasoline tax and a tax on car sales are the primary sources for the two dedicated building funds that receives nearly $3 billion annually. Both have fallen off because people are driving less and buying fewer vehicles.

Salisbury attorney Bill Graham, who led a 2006 petition drive to lower the gasoline tax, said the uncollected taxes have meant more money in the wallets of working families and businesses reliant on fuel. The state’s gasoline tax was among the highest in the country.

“While the revenue was not generated, that also meant there was a savings to the general driving public at a time when some people are losing their jobs,” said Graham, who ran unsuccessfully for the Republican nomination for governor this year.

The state’s gasoline tax is automatically adjusted twice annually based on the average wholesale price of a gallon.

The adjustments, based on a six-month average for gas, were designed to keep the tax’s value from eroding. Until recently, the material cost for building roads had doubled in price compared to 2003, said Mark Foster, the chief financial officer for the Department of Transportation.

“The cap was intended to be a recovery of inflationary costs, so obviously we lost $400 million of opportunity to cover increases in fuel and construction materials,” Foster said.

The Legislature agreed to limit the tax to no more than 29.9 cents per gallon starting in mid-2006 after complaints when it rose by roughly 3 cents because gas prices had surged in the aftermath of Katrina and Hurricane Rita. Gov. Mike Easley and transportation advocates didn’t like the idea but he agreed to it when he signed the budget bill that year.

Without the cap, the Legislature’s Fiscal Research Division says the tax now would have been 34.8 cents per gallon and soared to 41 cents the first of next year.

“I still believe that the cap on the gas tax was the right thing to do,” Graham said.

The sheer size of the lost revenue can’t be overlooked. The $600 million exceeds the value of all road-building contracts approved by the Board of Transportation at monthly meetings from July through November. Replacing the aging, narrow Yadkin River Bridge along Interstate 85 could cost $400 million, Foster said.

With the struggling economy forcing contractors to bid less to highway projects and recent lower oil prices reducing the cost of construction materials, the extra cash could have helped accelerate work.

“We would’ve had the money in the bank to do these kind of things, and capitalize on the (bad) economy,” said Rep. Nelson Cole, D-Rockingham, co-chairman of the Legislature’s transportation oversight committee. “It would have multiplied our efforts considerably.”

The Legislature might let the cap expire in a non-election year. The public may forgive lawmakers, too, if gas prices are still at their current $2 per gallon.

Graham said the cap should be extended and no new road revenue sources authorized until DOT and Gov.-elect Beverly Perdue makes the agency more efficient.

Rep. Bill McGee, R-Forsyth, another blue-ribbon panel member, said voters would prefer to have a flat tax rate that doesn’t change. But McGee acknowledged that fixing the gas tax won’t change the larger problem.

“The gas tax is not going to raise the amount of money that we need,” he said.

Beverly Perdue and Pat McCrory say they want big changes in how North Carolina builds roads.