North Carolina has been known as “The Good Roads State” since the 1920s, when legislators approved a statewide program to connect all county seats with hard-surfaced roadways. The state’s commitment to building and maintaining highways for economic development continued throughout the rest of the 20th century, resulting in a state-maintained highway system now totaling 78,000 miles, second in size only to Texas.
For all the time North Carolina has taken such great pride in its modern highway system, the state has resisted the idea of toll roads.
One of only 15 states in the country to reject the toll-road solution, North Carolina also is the only Eastern seaboard state between Florida and New York with no prior experience in planning and building toll-supported transportation facilities. But rapid growth at the turn of the 21st century has created a critical dilemma for North Carolina’s transportation officials. During the 1990s, population in the state increased more than 15%, and travel on state highways grew by more than 40%. Moreover, forecasts provide no relief in sight, with population and travel expected to grow at even higher rates by 2010.
Highway funding emergency
The result of this exponential increase in North Carolina highway usage has been predictable. Even with 10 large projects topping $4 billion currently underway, the North Carolina Department of Transportation (NCDOT) has had a difficult time keeping pace with the demands of mushrooming population on highway travel.
According to a 2000 study by Dr. David Hartgen, professor of transportation studies at the University of North Carolina in Charlotte, North Carolina’s roads rank poorly on most basic performance indicators. The state’s chapter of the American Society of Civil Engineers agrees, citing congestion and the condition of roads and bridges as the top three infrastructure concerns in its 2001 state report card.
Unfortunately, long-term solutions to North Carolina’s highway problems come with no small price tag. According to state highway officials, an additional $550 million will be required each year to keep up with growing maintenance needs, public transportation projects and a list of planned but unfunded road projects that could take as long as a quarter century to complete.
Faced with unavoidable budget shortfalls in a variety of areas, the North Carolina state legislature in 2000 directed the DOT to conduct a feasibility study considering the option of toll-supported highway construction. For senior NCDOT officials, this represented an unprecedented opportunity to address the state’s highway-funding crisis.
A high-speed education
To facilitate the process of undertaking this study, NCDOT engaged the services of PBS&J, a firm with experience in toll-road consulting.
In short order, PBS&J undertook an effort to deliver a lot of information about toll roads to a lot of different people at a lot of different levels in the department.
In the first stage, PBS&J assembled a consulting team of professionals that consisted of PBS&J staff drawn from a variety of highway and toll-based disciplines along with representatives from one of the country’s top traffic and revenue consultants, transportation-management consultants knowledgeable in NCDOT practices and an investment backer who specializes in toll-bond issues.
In the first month, the team delivered a set of working papers covering topics from project objectives to governance options and met with a working group of senior NCDOT officials to establish communication and discuss basic issues.
The team also conducted a wide range of interviews with key external and internal stakeholders—including current officials from the North Carolina AAA and the North Carolina Motor Carriers Association, three former NCDOT secretaries and selected NCDOT senior staff members—to assess political and public perceptions of funding needs and toll-road acceptability.
At the second meeting, the team presented findings from the stakeholder interviews and outlined potential support and objections a toll-road proposal might expect to encounter. The second meeting also included extensive dialogue between the NCDOT staff and a peer panel of senior executives from other toll-road projects around the country representing a variety of organizational structures.
At the third meeting, the consulting team led the NCDOT staff through a series of specific recommendations based on NCDOT feedback dealing with governance issues and program development. The team also presented a rough framework for authorizing legislation based on those recommendations.
Following that rough proposal, the team put together a detailed outline for legislation to create a statewide, independent toll-road agency.
By coordinating information from a wide range of participants—within both the department and the industry—and by working to elicit rapid and meaningful feedback, the study team was able to complete its task by the legislature’s previously stated February deadline—a total project time of approximately four months.
The completed bill calls for an independent statewide authority with the ability to issue debt, condemn property and build toll-collecting turnpikes, with governance by a seven-member board of directors, five to be chosen by the governor and two representing the NCDOT.
At the completion of the the toll-road feasibility study, NCDOT staff worked with the governor’s legislative to draft a bill to create a new North Carolina Turnpike Authority. Introduced early in 2001, the bill’s progress was initially stalled by the legislature’s focus on a severe budget crisis.
The urgent need for this transportation funding tool and the commitment by legislators and state staff resulted in passage of the final bill and ratification by the governor in October 2002.
The statute authorizes creation of an independent authority governed by a nine-member board of directors that now has the ability to issue debt, condemn property and build tolled highways aimed at addressing the state’s pressing transportation needs.