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Jan 07

How Do We Pay for Roads?

Posted on January 7, 2020 at 9:18 AM by Brooke Kochanski

traffic            When it comes to transportation, a lot of the discussion in the Triad are about the importance of maintaining our roads. Here at the Piedmont Authority for Regional Transportation (PART), we know that public transit plays an important role in preserving these asphalt lifelines to our communities. And they most certainly need lots of routine care and attention!  There is a reason we are considered the “Good Roads State”, and we should be proud of those references.  But there is a cost.

            Like any other piece of public infrastructure, roads are a good example of the notion that there is cost to nearly everything we encounter in our daily lives. From street signs to lamp posts to sidewalks, we come across hidden costs more often than you might even realize.

            So how exactly are our vital roadways paid for? How are the streets and highways we depend on every day financed — and where does the money come from to repair them?

            The simplest answer is taxes. Like so many public services in our lives, roads are primarily funded by taxes. That goes for the side-street in your neighborhood all the way up to interstate highways like I-40.

            This all starts with the federal fuel tax, which currently sits at 18.4 cents per gallon. Every time you fuel up at the gas pump, you are paying that surcharge on top of the cost of fuel. This money goes back to Washington, DC and Congress determines how these dollars collect from throughout our Nation get added into the overall federal transportation budget. Following the Legislative process, the money could end up going towards any number of transportation-related projects: roads, pedestrian improvements, public transit or maritime use, for example.

            Portions of this federal tax fund also makes its way down to the state level; mostly in the form of grants that various agencies and groups can compete for. According to the NC Department of Transportation, this federal fuel tax “accounts for approximately 25 percent of NCDOT's overall budget and about 50 percent of its construction budget.”

            States also charge their own fuel taxes. Now, every state’s funding structure is different, but we’re going to focus on our home state of North Carolina. As of the beginning of 2019, the North Carolina fuel tax is 36.2 cents per gallon. This funding helps account for 54% of the entire NCDOT budget, and it is often adjusted at the start of every year to account for both population and energy cost (fuel) changes.

            Fees you pay at the DMV — such as when you transfer car titles, purchase a new vehicle or renew your registration — contribute another piece of the road-funding budget. These fees account for roughly 46% of the state budget and often go towards covering maintenance project costs.

            Finally, there are toll roads. We have a few toll roads here in North Carolina (none of which are located in the Piedmont Triad). In general, toll roads help make up for a lack of local funds in a given area, meaning that there is not enough tax revenue generated by normal means. Toll roads present an interesting element to the funding of our roadways because they are the most tangible way drivers pay for the roads they use: you take a toll road; you pay a fee.

            But as we’ve outlined above, there are many kinds of taxes that go towards paying for road improvement and maintenance.  And while no one likes paying taxes, the daily vehicle use does impose wear and tear to our roadways, and requires mutual investment from both citizens and the government to keep them safe and drivable.

            So the next time you hit the open road, take a moment to remember that the roads you’re driving on aren’t free. By using public transportation, carpooling, or vanpooling, you can reduce the daily wear and tear on our roadways; ultimately helping to lower our annual investment into infrastructure repairs. Find your bus route today at www.partnc.org/express or give us a call to plan your trip 336-883-7278,  email us at contactus@partnc.org and share on social media.