public policy advocacy for the professional engineer                                                 June 13, 2014    


Legislative Update on the Budget - ACTION ALERT


Part 1 – Transportation


The House approved a vastly different budget today than the Senate approved a few weeks ago.  While many of the significant differences occurred in Education and Medicaid, we want to make you aware of items that affect Professional Engineers who work in Transportation.  A separate communication will be sent out on Monday highlighting the differences between the two budgets in Natural and Environmental Resources, Commerce and Capital.


There are a few key items in the transportation budgets where our industry needs to take a position to ensure the best outcome for our members.  Please take time to review this e-mail then contact the legislators listed at the bottom to voice your support or opposition to the various budget proposals. 


In summary, PENC’s list of recommendations are:


1) Support for more funding for system preservation and maintenance (Senate proposal of $81 million for pavement preservation vs. House proposal of $50 million)

2) Support for more outsourcing (both House and Senate)

3) Oppose the use of “engineering specifications” as outlined in the House budget’s Highway Maintenance Improvement Program (House position).  These specifications are not appropriate for use in a general statute. 

4) Support for highway use tax increases to be used for projects funded through the Strategic Mobility  Formula (Senate)

5) Support for eliminating the Economic Development Fund which is under-utilized (Senate position)

6) Support for phasing out transfer of transportation dollars to DPI (general fund) for driver education (Senate position)

7) Oppose the use of “off the top” maintenance funds for capital ferry needs (House position)

8) Oppose a study for Strategic Transportation Investment law.  The law only passed last year and it is too early for a study. (House position)

9) Support for Public Transportation including bicycle/pedestrian projects with a suggestion that this program be reviewed to determine better utilization of funds.  (House position)


1) Both the Senate and House budgets create a Pavement Preservation program with similar requirements that specify eligible and ineligible uses.  However the Senate appropriated $81 million in funding while the House only appropriated $50 million. 

PENC supports the Senate proposal of $81 million.  The Senate’s budget proposal continues to phase out transfers from transportation funds to the general fund – for instance the Senate does not include a transfer of $3.5 million for leaking underground storage tanks.   Additional Pavement Preservation funding can be achieved by elimination of transfers and other funding realignments that are supported by the Senate. 


2) The House and Senate budgets both increase the targets for outsourcing of preconstruction activities by NCDOT but vary slightly in their recommendation for outsourcing of roadway design.  The differences are as follows:                                                                                                                      





Preconstruction and Technical



Roadway Design     



Project Dev. And Envir. Analysis           



Right of Way 

increase by additional 5%




PENC supports continued outsourcing as appropriate while ensuring that adequate expertise resides in NCDOT to support project management and oversight.  While the more aggressive House proposal for Roadway Design, on the surface, appears to be in line with the goal of more outsourcing, it may be unachievable given that the current percentage outsourced is now below 40%. 


3) The House budget contains very specific language in their description of the Highway Maintenance Improvement Program specifying specific pavement preservation treatments that must be used and how they should be applied.  A link to the section can be found here:

PENC opposes the use of specific pavement specification treatment language codified in law when these decisions should be made by a licensed professional.  This is not appropriate language to be included in a budget bill. 


4) The Senate budget included raising the caps on commercial vehicles, recreational vehicles and out of state vehicles’ highway use tax to generate additional revenues for transportation.  The House did not include these fee increases which would generate an additional $12 million each year. 

PENC strongly believes these fee increases are justified because 1) our highway use tax is currently the lowest in the southeast and 2) these caps have been the same since 1989. If we are truly serious about transportation revenue reform, ending all the transfers to the general fund and justified fee increases have to be a first step in the process.


5) Last year’s enacted budget contained funding for an NCDOT Economic Development fund in the amount of $4 million, non-recurring.  These funds were to be used on special projects that would be awarded based on their ability to generate economic development activity as identified by the Department of Commerce.  To date very little if any of this money has been spent (only two projects).  The Senate did not include any funding for this program.  However, the House doubled the amount to $8 million and designated it as recurring. 

PENC supports the Senate proposal that does not continue funding for the Economic Development fund program for two reasons 1) the strategic mobility formula uses economic competitiveness as one of its criteria for ranking projects 2) there are contingency funds in the NCDOT budget that can be used for this purpose.  It is not necessary to establish and appropriate money for another fund. 


6) The Senate proposal seeks to end the transfer of $27 million in transportation dollars to the Department of Public Instruction for the driver’s education proposing that this funding be non-recurring and indicating their desire to end the transfer after next year.  The House continues the transfer as a recurring item.

PENC supports the Senate proposal to eventually end the transfer to DPI.  However a phased in approach will be necessary as the drain on the general fund could be too severe if taken all in one year.


7) The House includes language that removes the existing ferry tolls and the authority for future ferry tolling to be determined by the NC Board of Transportation.  The House also establishes a new Ferry Capital Improvement Account and transfers $6.2 million from each highway division to fund the program.  The Senate version of the budget keeps the ferry tolls in place.

While PENC does not take a position on the tolling of ferries, we do object to the use of taking money from the Highway fund (maintenance) to fund ferry capital needs. 


8) The House budget proposes a study of the Strategic Transportation Investment Law passed last year.  It is unclear why House members feel this study is warranted so soon after the law was enacted.

PENC does not support the House proposal and believes resources would be better spent implementing the law as enacted last year. 


9) The Senate budget included a 4% cut to the non-highway modes including public transportation and bike/ped.  The House did not include these cuts.

PENC supports funding for public transportation and bicycle and pedestrian projects and, therefore does not support the Senate reduction to these programs.  However, these projects continue to accrue balances making them vulnerable to future cuts.  The NCDOT should be required to come up with a plan to better utilize these dollars or risk losing them.



Please contact your Senate and House Appropriation Chairs no later than Monday, June 16th regarding our position on these important transportation budget items.  They need to know that the Engineers are engaged on these issues.


Rep. Nelson Dollar – House Appropriations Senior Chair

Rep. Justin. Burr – House Appropriations Chair

Rep. Bryan Holloway – House Appropriations Chair

Rep. Linda  Johnson– House Appropriations Chair

Rep. Pat McElraft – House Appropriations Chair

Rep. Phil Shepard – House Transportation Appropriations Vice Chair

Rep. John Torbett – House Transportation Appropriations Vice Chair


Senator Harry Brown – Senate Appropriations Chair

Senator Kathy Harrington – Senate Appropriations Chair

Senator Neal Hunt – Senate Appropriations Chair

Senator Brent Jackson – Senate Appropriations Chair

Senator Bill Rabon – Senate Transportation Appropriations Co-Chair

Senator Wesley Meredith – Senate Transportation Appropriations Co-chair

If there are questions or you need additional information, please feel free to contact me at or phone 919-834-1144, ext. 1.


Betsy Bailey
Professional Engineers of North Carolina




What's In This Edition:

Legislative Update on the Budget- Transportation


System Preservation and Maintenance




Engineering Specifications


Highway Use Tax Fee Increases


Economic Development Fund


Transfer of Transportation Dollars to DPI


"Off the top" Maintenance Funds for Capital Ferry Needs


Strategic Transportation Investment Law Study


Public Transportation


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Charlotte Regional Seminar- September 11, 2014

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