(The Center Square) – North Carolina should be getting more money for roads, according to new projections from the state.
Revenue from the state’s motor fuel tax, Department of Motor Vehicle fees, highway use tax and sales tax on fuel go into two state funds – the Highway Fund and Highway Trust Fund.
According to the forecast, in the remainder of this fiscal year, North Carolina will receive $3.4 billion in Highway Fund revenues and $2.5 billion in Highway Trust Fund money, an increase of $59 million over a previous projection.
“The upward revision is due to a number of factors, including stronger consumption of motor fuels and higher auto sales than expected at the time of the last consensus forecast in May 2025,” the state forecast said.
Prospects for future years are also bright, the state said. The projections for next fiscal year, 2025-27 are also higher.
“Looking forward to 2027 and beyond, lower short- and long-run interest rates should result in a more favorable environment for consumers looking to buy new and used vehicles, boosting revenues to the state’s 3% highway use tax,” the state said. “Fees collected from the state’s new transportation commerce tax should also be more robust than initially anticipated.”
The numbers reflect North Carolina’s robust economy, Aaron Moody, spokesman for the North Carolina Department of Transportation, told The Center Square.
“This projected increase reflects the ongoing growth in our state, and as one of the fastest growing states in the nation, stable and growing infrastructure funding is essential to our ability to keep up with the growing demand on our transportation system,” Moody said.
The extra money couldn’t come fast enough for state legislators who complained at a recent committee meeting of rising road construction costs and a huge backlog of needed projects. They also complained that Raleigh and Charlotte are soaking up a disproportionate share of North Carolina’s road construction funds, leaving other fast-growing parts of the state behind.
Another challenge has been funding and repairing road damage from Hurricane Helene in 2024, legislators said.
The state forecast warned that a prolonged conflict in the Middle East could put a damper on road revenues.
“The largest near-term risk is the ongoing conflict in the Middle East, which has increased gasoline prices and threatens to keep them elevated in the weeks and months ahead,” the forecast said. “A prolonged conflict would dampen travel, resulting in less motor fuel consumption, and weaken sales of motor vehicles due to lower consumer sentiment and less disposable income after accounting for higher spending on motor fuels. Furthermore, constrained global refining capacity is raising concerns about a possible shortage in diesel fuel, which could negatively affect state’s freight and shipping industries.”
