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My thoughts on NC Transportation Equity Formula

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A few weeks ago, a blog reader made the following comment on my post "Will Charlotte stop complaining about I-485 now?":

Adam, do you have any idea if the equity formula will be modified or dropped in the next few years? With rural areas losing clout in the state government to the more urbanized Piedmont, and the larger number of discontented voters voicing their concerns in the Piedmont, it seems likely to me that NCDOT and/or the General Assembly will want to alter this some way soon. That would be a shame for our rural areas of course, particularly in the east and west, but as an urbanite in the Triangle, I frankly think it needs to happen, as right now the major metropolitan areas just are not getting what they need if they want to continue to boom transportation-wise this century. Your thoughts?
A great comment and question by the reader.  So here goes.  (Editors note: Brian or Bob if you want to write your own opinion to this comment - feel free.):

The first part of the comment asking about the chances of the equity formula being modified is certainly possible.  And we don't have to look any further than current Secretary of Transportation Gene Conti and Governor Beverly Perdue's efforts to reform the DOT.  The decision to move decision making ability away from the Board of Transportation is a good first step.  Conti's goal to have the DOT achieve 80-90% of proposed work TIP compared to 50% now is another example.  His goal is to put together a five year work plan based on what funding is available and what is the strongest needs in the state. 

Reforms like that will allow residents of the state to know when various projects will be completed and not have to see the dates change every other year because of political expediency and pull.

As for eliminating the formula all together, I can't see that happening just yet.  The Equity Formula exists from a 1989 act of the North Carolina Legislature.  It came about the same time as the Highway Trust fund and the various loop proposals.  As a result, any changes to the equity formula will have to come from the General Assembly.

And that's where the problem exists.  Even with a shift in population to more urban and suburban areas within the state, the political power in the state is based in the rural eastern counties, specifically Eastern North Carolina Democrats.  (The last three Democrat governors of NC are from that powerbase: Governor Perdue is from New Bern, former Governor Mike Easley is from Rocky Mount, former Governor Hunt is from Wilson.) 

Because of the strength within the legislature of the rural eastern counties, I just can't see State Senator Marc Basnight, who is the President pro tempore of the State Senate, championing a complete elimination of the Equity Formula.  However, I do see some slight modifications happening.  First, the previously mentioned reform efforts by Perdue and by Conti within NCDOT leads me to believe that some change in the funding will occur.

Though there hasn't been any talk of reforms to the equity formula, the upcoming release of the new NCDOT five year work plan may start the ball rolling.  Seeing what projects NCDOT considers as top priority (Yadkin River Bridge replacement, modernizing a 50 year old Interstate 95, completing various freeway loops, etc.), I think will have the biggest impact on any future reform.  These reforms may include: increasing/decreasing the requirements of the equity formula - specifically the 25% that is based on intrastate mileage that is remaining to be completed, funding of priority transportation projects first regardless of where they are located, changes in revenue accounts to fund various projects, etc.

As you can see, the equity formula is the biggest target when it comes to NC highway financing.  It doesn't matter if it comes from political leaders or local citizens.  It is certainly time for the NC State Legislature and Governor Perdue to look into reforming the equity formula.  It is outdated, easily manipulated, and in need of real reform.  The steps by Governor Perdue and Secretary of Transportation Gene Conti to reform NCDOT appear to be great first steps.  Now it is time for Governor Perdue to push equity formula reform within the state legislature.  Hopefully, the governor is willing to take on that task.

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