NC to recommend new fees affecting developers, billboard companies

November 5, 2014 | 0 Comments

On Thursday, November 6, the North Carolina Board of Transportation will vote on recommendations to implement fees affecting developers and billboard companies. The board’s action follows its October 1 meeting, when Mike Holder, chief engineer for the North Carolina Department of Transportation (NCDOT), recommended the fees.

cars and billboards on NC highway

NC lawmakers have been advised to increase fees for billboard services, which will hurt the very same lawmakers in charge of implementing the fees. From versageek.

Currently, developers and outdoor advertisers pay fees to local governments for services like analyzing project plans, approving plats, and monitoring encroachments that include pipe and cable installation, among other activities. Those fees can total thousands of dollars for a single subdivision.

While the NCDOT collects some fees for similar services — field inspections of billboards, regulating oversized and overweight trucks, for example — its fees are unusually modest, forcing the agency to rely heavily on gas taxes and motor vehicle fees.

But those revenue sources are plunging not just in North Carolina, but nationwide as motorists choose more fuel-efficient cars. So, despite having the highest motor fuels tax in its region — 36.75 cents per gallon — and ranking among the 10 states with the highest gas taxes in the country, North Carolina is looking for additional revenue sources.

Indeed, the state legislature’s 2014 budget mandate requested—at NCDOT’s behest—recommendations for new fees to cover service costs, as well as cost-cutting options and ways to generate revenue from private sponsors and marketers. Governor Pat McCrory followed suit in September by promising to identify new revenue sources for the 2015 General Assembly, as well as possibly recommending a gas-tax cut.

The state’s transportation needs are projected to run between $94 billion and $123 billion by 2040, and already it faces a $5 billion shortfall for the Charlotte Area Transit System’s long-range 2030 plan. Recent transportation decisions by the legislature, such widening Interstate 77 in the Lake Norman area to make room for a toll lane, have proven unpopular, but Edward Curran, CEO of Bissell Cos. and chair of the transportation board, says the state must study alternatives.

“We clearly get that we can’t be as reliant on a declining revenue source like the gas tax,” he said. “I think it is appropriate that we’re trying to look at lots of different areas to raise more revenues.”

While the board will only provide recommendations on possible revenue sources to the legislature, which has the power to act on those suggestions, it’s not clear that the board will support new or higher fees. The nineteen-member board includes developers and real estate executives, such as David Brown, owner of DLB Properties, and Malcolm Fearing, co-owner of The Fearing Realty LLC, whose industries would absorb the higher or new fees.

Said Bill Saint, CEO of Classica Homes and board chair for the Home Builders Association of Charlotte, “The bottom line to any of those fees is always that, [even] if you think you’re passing it on to a home builder, clearly it gets boiled into the home price. It gets passed on to the homeowners.”

But Curran, whose company operates in the real estate sector, has a retort: “Every other jurisdiction charges us fees for the development process, so why shouldn’t [the NCDOT]?”

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Category: Infrastructure, Legislation

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