RALEIGH – Sharp decline in revenue has resulted in the N.C. Department of Transportation falling below the statutorily mandated cash floor of $293 million.
State law prevents NCDOT from entering into new contracts that spend money on transportation projects.
“Never in the history of NCDOT has there been such an immediate and sustained decline in revenues,” Transportation Secretary Eric Boyette said. “We need revenue to begin putting people back to work across North Carolina.”
The NCDOT is funded through the Motor Fuels Tax, Highway Use Tax and Division of Motor Vehicles fees.
The drop in revenue from these sources due to COVID-19 will result in more than $300 million in lost revenue for this fiscal year, which ends June 30. An additional shortfall of more than $370 million is projected for fiscal year 2021.
NCDOT can’t enter into agreements that obligate additional funds for transportation projects until cash on hand is above the statutory cash floor.
What NCDOT can do while below the cash floor:
• Continue active projects
• Maintain existing infrastructure with existing supplies and staff
• Pay incoming invoices from private sector companies as long as funds exist
• Continue operating DMV functions
• Respond to emergency situations (with existing staff and materials)
• Hire new employees for critical, safety-related positions or DMV functions
What NCDOT can’t do while below the cash floor:
• Negotiate right of way purchases on projects not underway
• Buy additional equipment, supplies or services for transportation projects unless obligated to make such a purchase in an existing contract
• Award new construction, engineering or repair contracts
Actions NCDOT is taking:
• Laid off nearly half of all temporary employees and embedded consultants
• Suspended most programs
• Hiring freeze (except for positions impacting public safety)
• Canceled contract for passenger ferry
• Developing department-wide plan to furlough employees (plan not yet completed)
• Evaluating programs and areas for cuts