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Finance & Budget

North Carolina has a large and diverse transportation system consisting of all modes of transportation, including highways, rail, aviation, ferries, public transit and bicycle and pedestrian transportation.

With an annual operating budget of about $4.7 billion, the N.C. Department of Transportation is responsible for building and maintaining this transportation network, as well as overseeing the state's Division of Motor Vehicles.

Transportation funding comprises approximately 80 percent state revenues and 20 percent federal revenues.

State Funding Resources

Approximately 50 percent of state transportation funding is based on revenues from the Motor Fuel Tax; 30 percent comes from driver and vehicles fees collected by the N.C. Division of Motor Vehicles; and 20 percent is from the Highway Use Tax on vehicle title transfers.

For more on the sources of these funds and how they are used, see the charts in the top right column of this page.

Motor Fuel Tax

In March 2015, the N.C. General Assembly established the following rates:

​Period​Rate
​April 1, 2015 to Dec. 31, 2015
​36 cents per gallon
​Jan. 1, 2016 to June 30, 2016
​35 cents per gallon
​July 1, 2016 to Dec. 31, 2016
​34 cents per gallon
​Jan. 1, 2017 to Dec. 31, 2017
34 cents per gallon, multiplied by a percentage
Starting Jan. 1, 2018, the rate will change at the beginning of each year based on a statutory formula that takes into consideration population and energy cost inflation.

DMV Fees

The N.C. General Assembly sets various fees collected primarily from licensed drivers and vehicle registration.

Highway Use Tax

The N.C. General Assembly set the tax at 3 percent of a motor vehicle's net retail value (after trade-in allowance) when a certificate of title is issued in North Carolina.

Federal Funding

Appropriated by Congress, federal transportation funding comes from a federal motor fuel tax and vehicle fees (mostly on trucks). It accounts for approximately 25 percent of NCDOT's overall budget and about 45 percent of its construction budget.

Details about the current appropriations bill, called the Fixing America's Surface Transportation Act, are available on the Federal Highway Administration website.

State Funding Allocation & Distribution

Funding from the three state revenue sources (Motor Fuel Tax, DMV fees and Highway Use Tax) are allocated to two state funds the Highway Fund and Strategic Transportation Investments as follows:

Highway FundStrategic Transportation Investments
​Motor Fuel Tax71 percent​​29 percent
DMV Fees​​Approx. 85 percent​Approx. 15 percent
​Highway Use Tax-​​100 percent

Highway Fund

The Highway Fund primarily supports projects that help take care of the state's existing transportation system. This includes resurfacing highways, replacing bridges and paving unpaved secondary roads. Funds are distributed across North Carolina based on need.

The Highway Fund also supports the Powell Bill Program, which provides state aid to municipalities for pedestrian, bicycle and road improvements.

Strategic Transportation Investments

Strategic Transportation Investments primarily funds new construction and expansion projects across all modes of transportation. Funding is allocated on local, regional and statewide levels based on data and input from local planning organizations and NCDOT divisions.

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7/10/2018 10:19 AM

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