Outer Banks Bridge construction

In this 2018 photo released by the North Carolina Department of Transportation, construction personnel work on a new Bonner Bridge that will span the Oregon Inlet on North Carolina's Outer Banks.

(The Center Square) – The North Carolina House is expected to review a bill this week that would set a temporary floor on a gasoline tax, increase financial safeguards at the North Carolina Department of Transportation (NCDOT) and balance the agency's budget.

The Senate last week unanimously passed House Bill 77, which reins in the financially troubled NCDOT and increases controls on its cash balances.

HB 77 cuts about $528 million in state funding from NCDOT and offsets some of it with federal aid. The General Assembly earmarked $300 million for NCDOT in the state's coronavirus relief package, and the agency receives around 25 percent of its funding from the federal government.

A May state audit revealed the department went $742 million over its $5.9 billion spending limit for fiscal year 2019, and its 14 highway divisions were short on cash and borrowed against the next year's budget. 

HB 77 also would stop the motor fuel tax rate from falling below the current rate of 36.1 cents per gallon for the next two years, increasing revenue by $20.2 million in the next fiscal year and $33.4 million in fiscal year 2021-22, the fiscal research office predicted. However, the economy's response to COVID-19 adds uncertainty.

The measure would increase the Highway Fund's share of motor fuel tax revenue and decrease the revenue stream to the Highway Trust Fund.

Under current law, half-a-cent per gallon of the revenue from the gas tax is distributed to the Underground Storage Tank Cleanup Fund and the Water and Air Quality Account. Then, 71 percent of the remainder goes to the Highway Fund, and 29 percent is allocated to the Highway Trust Fund.

HB 77 would allocate 80 percent of the remaining share to Highway Fund in 2021 and 79 percent in 2022. In the following fiscal years, 2022-2023 and beyond, the Highway Fund found would receive 74 percent.

In response to the audit, the measure allows Cooper and the Legislature to appoint the members of the State Board of Transportation. The 20 board members would be required to have experience in transportation or financing and would oversee NCDOT's finances.

"This bill has been a bipartisan effort from the beginning. With this landmark legislation, we're restoring confidence and trust in the department," Sen. Tom McInnis, R-Richmond, said. "From this point forward, there will be more oversight and more transparency of the department's finances." 

HB 77 would also: 

• Authorize the state treasurer to issue $700 million in Build NC Bonds for NCDOT to use on existing projects;

• Increases the maximum annual debt service on the federal Grant Anticipation Revenue Vehicles bonds from 15 percent to 20 percent; 

• Directs the secretary of transportation to notify the governor when anticipated costs from major disasters will exceed funds in the Emergency Reserve;

• Urges the governor to convene a special session to appropriate additional disaster funds.

Staff Reporter

Nyamekye Daniel has been a journalist for three years. She was the managing editor for the South Florida Media Network and a staff writer for The Miami Times. Daniel's work has also appeared in the Sun-Sentinel, Miami Herald and The New York Times.