AGENDA #10d

 

BUDGET WORKING PAPER

 

TO:                 W. Calvin Horton, Manager

 

FROM:            Jim Baker, Finance Director

 

SUBJECT:       Proposed Resolution for Increased Powell Bill Funds

 

DATE:             April 2, 2003

 

 

As requested by a Council member, attached is a resolution that would recommend that the General Assembly increase the State gasoline tax allocated to municipal street maintenance and construction.  The proposed resolution would raise the tax from the current 1 ¾ cents to 3 ½ cents.

 

BACKGROUND AND DISCUSSION

 

Powell Bill funding currently received from the State is based on an allocation of 1 ¾ cents of the current State gasoline tax distributed to qualifying municipal governments.  The distribution to local governments is based on a formula allocating 75% of the total funding available based on municipal population and 25% based on the local street mileage within a given jurisdiction.   The allocation to municipal governments is restricted to street maintenance, repair, and construction of the local street system within each municipal government.

 

The allocation of 1 ¾ cents for local governments has not changed since 1987 when the rate was changed from 1 ½ cents to 1 ¾ cents.  In 2001-02, the Town received about $1,553,000 in Powell Bill funding.  However, based on changes in legislation enacted by the General Assembly last year, funding in the current year declined to $1,490,000 and is expected to decline further to about $1,390,000 in 2003-04.

 

The attached resolution would request that the General Assembly increase the Powell Bill funding for local governments by increasing the portion of the State gasoline tax that is earmarked for municipalities from 1 ¾ cents to 3 ½ cents.

 

 

A RESOLUTION REQUESTING THAT THE GENERAL ASSEMBLY INCREASE POWELL BILL FUNDING BY INCREASING THE PORTION OF THE STATE GASOLINE TAX ALLOCATED FOR LOCAL STREET MAINTENANCE (2003-04-02/R-1)

 

WHEREAS, the Town of Chapel Hill and other local municipalities have received reduced Powell Bill funds; and

 

WHEREAS, the funds are inadequate for maintaining Town of Chapel Hill and other North Carolina municipal streets; and

 

WHEREAS, the gasoline tax is a major revenue source for Powell Bill funds and is intended to cover a major portion of street construction, maintenance and related costs; and

 

WHEREAS, the General Assembly has the authority to approve changes in the gasoline tax;

 

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby requests that the General Assembly increase the portion of the gasoline tax allocated for municipal street maintenance and construction from 1 ¾ cents to 3 ½ cents and remit the increase to municipalities in the form of additional Powell Bill funds according to the current distribution formula.

 

This the 2nd day of April, 2003.