Home cash-strapped Bill could relief cash-strapped North Carolina agency

Bill could relief cash-strapped North Carolina agency

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North Carolina lawmakers are attempting to step in to bail out the state’s Department of Transportation amid budget troubles.

The state Senate voted in favor of legislation Thursday that will route hundreds of millions of dollars to the department in order to resume stalled projects. It is now up to the governor to sign the bill to release the funds.

North Carolina law requires the department to maintain a cash balance between $282 million and $1 billion. The department has been scraping close to the minimum for most of the year, reports say. The Office of State Budget and Management ordered an audit by an outside consulting firm, McKinsey & Company.

McKinsey & Company found that the DOT was overspending because of disaster recovery efforts, overruns on construction projects and other areas.

“While NCDOT has continued to complete projects and serve communities across North Carolina, we have been forced to respond to unprecedented natural disasters and financial pressures,” NCDOT Secretary Jim Trogdon said after the audit results in September. “While we have many points of pride as an agency, our state faces new challenges every day that we must ensure we are using our resources to address.”

DOT’s financial issues also create a problem for the labor market, according to Sen. Harry Brown.

“Some might say that DOT shouldn’t get any help because they created their own problem,” he said. “Well, the result of doing nothing will be thousands of people get laid off across North Carolina through no fault of their own. That’s not an outcome I, or any of my Senate colleagues, can accept.”

Senate Bill 356 will allocate $100 million for current and future disaster recovery projects and another $100 million for infrastructure. 

Lawmakers are also offering the department loan forgiveness of $90 million for money it borrowed from the General Fund and a $100 million loan from the Highway Trust Fund.

In order to curtail any further issues, the department will be required to enact more cash balance reporting measures, call for quicker federal reimbursements, draw from other reserve accounts, and add a cap to certain claims.

Brown said he blames Gov. Roy Cooper for the cash-strapped department.

“We’re passing legislation to clean up the governor’s mess at DOT, and we expect to add even more accountability measures next session,” he said.