NC 21ST CENTURY TRANSPORTATION COMMITTEE AND OTHER COMMENTS 
Legislators on the 21st Century Transportation Committee have given final approval to a report that proposes a new tax on the number of miles a car is driven each year, as well as other options for generating highway and transit money within the state of NC. The vehicle miles tax would be calculated during the car’s annual inspection and likely would supplement or replace the gas tax but don’t count on it. The proposal is for a ¼ to ½ cents per mile tax for passenger cars and ½ to 2 percent per mile tax for trucks. A quarter cent tax based on 10,000 auto miles driven would produce $25 per auto for example. Increasing the highway use tax on vehicle sales would bring in $200 million more annually. In addition to the huge detrimental impact this could already have on struggling motor carriers, it would be grossly unfair to NC based companies if the tax doesn’t apply to their out of state competitors that are doing business in NC. The special committee was formed to propose a menu of options for transportation funding, because the state’s primary sources of money-the gas tax and tax on car sales are flat or declining. The group also proposed toll booths on I-77 and I-95, an idea that has been floating around Raleigh for several years, especially the tolling of I-95. While under Federal Law it is illegal to toll interstate highways, the American Trucking Association reports that the Federal Highway Administration has announced the creation of the Office of Innovative Program Delivery. This new office will focus on “helping state governments explore opportunities” to convert their freeways into toll roads. It is also unlawful in the state of NC to toll an existing highway but a federal order could change that. Steve Jackson, an analyst who focuses on transportation issues for the NC Justice Center ’s Budget & Tax Center criticized the committee report as lacking vision. The crumbling economy is hitting the state’s highway department particularly hard, with the NC Department of Transportation scrambling to adjust to plummeting gas taxes and a dive in taxes collected from the purchase of new cars. The DOT is debating how to cope with an expected drop of revenue this year of 12 to 15 percent, which is about $350 million. Some projects will be delayed and the state could temporarily freeze all work. Fifty-five percent of the DOT’s budget comes form a 29.9% gas tax, in addition to an 18.4% federal gas tax. Revenue from the state gas tax declined 10% in October compared to the same month in 2007. Nationwide, the amount of miles Americans have driven has declined for 11 straight months, according to the Federal Highway Administration. For example in September, Americans drove 4.4 percent less than the same time a year ago. Rural interstate travel was impacted the most, falling 8 percent. Experts think Americans will be cautious about returning to the road. The aforementioned highway use tax was down 29 percent in October. The recent 5.5-mile segment of Interstate 485 that just opened cost $94 million. If projects are pushed back by six months or a year, Charlotte ’s DOT office does have a possible backup. Barry Moose, division engineer, saved $180 million to build the Monroe Bypass/Connector, which Raleigh has agreed to partially fund with new money. Moose had planned to use that money for one or two large projects, such as finishing I-485 early or widening I-85 through Cabarrus County . He could instead use it to replace lost funding. It is also possible that the Obama administration could give highway departments money in a stimulus bill that’s likely to pass Congress in January. Outgoing NC Gov. Mike Easley has ordered spending cuts of up to 5 percent and held up building repairs to locate up to $1.2 billion the state will need later to cover any shortfall. NC Gov elect Bev Perdue vowed on the campaign trail to overhaul transportation policy and reshape the problematic NCDOT into an efficient, effective and professional 21st century organization. She pledged to get the policies out of road building and to fix the poor management and structural problems that have contributed to the snail-like attention to roadbuilding and transit needs, particularly in urban areas such as Charlotte . The NC Budget & Tax Center has reported that if current economic realities remain unchanged, North Carolina ’s budge gap could balloon to more than $3 billion in 2009-10. 

NEW I-485 LEG OPEN IN MECKLENBURG
The new 5.5 mile leg of I-485 is now open after 234 days of delays with the road builder Skanska and the NC DOT both blaming each other for the delays. The leg connects with NC 115 and I-77. The remaining connection from NC 115 to I-85 and completion of the belt is many years away unless funding is found.

STIMULUS LIST
NC House Speaker Joe Hackney said that the I-85 bridge over the Yadkin River in Rowan County could be a beneficiary of an economic stimulus package being considered by Congress. States are pressing Congress to pump new money into the economy and they think one of the best ways to do that is to fund about $136 billion in “ready to go” infrastructure projects such as roads, bridges and sewers that could be started within a few months. States have compiled lists of projects they think would qualify for an infusion of federal funds, but only a fraction are likely to be funded, said Mark Foster, chief financial officer for the NC Department of Transportation. A $400 million replacement for the Yadkin Bridge (noted by AAA Carolinas as the worst bridge in the state) is on the state’s wish list of about 300 projects totaling $5 billion, Foster said. Less likely to qualify for stimulus dollars are the unfinished portions of the I-485 outer belt around Charlotte . Obama and congressional leaders have said that they re committed to a stimulus package but details have not been worked out. Other likely provisions include a temporary extension of unemployment benefits, a hike in food stamp benefits and an increase in medical assistance programs like Medicaid. Speaker Nancy Pelosi said she hoped Congress would have a package ready when lawmakers return to session early next year. States are hurting because of lower tax revenue and higher welfare payments. At least 43 states are facing deficits that could total more than $140 billion over the next two years according to PA Gov. Ed Rendell. Leading the way is California , where officials fear a $28 billion deficit by June. Hackney, president of the National Conference of State Legislatures, said it is uncertain what kind of shortfall North Carolina would face without assistance from the federal government, but he’s heard estimates ranging from $800 million to $3 billion. 

SOCAL PORTS TRUCK FEE BEGINS
Marine terminal operators in the twin ports of LA and Long Beach on Nov. 17 began collecting fees to subsidize the ports’ clean truck program. Excerpts: On Oct. 1 the LA and Long Beach ports implemented the first state of their program to significantly cut diesel emissions from trucks shuttling containers to and from their complexes. Trucks built before 1989 are now banned from the ports and older trucks are progressively phased out in the coming years until the entire fleet of 17,000 trucks has 2007 or newer engines. The plan includes a $35-per-TEU fee to help subsidize truck replacements and a new licensing regime for trucking firms that meet a long list of port qualifications. The fees, equal to $70 for a 40-foot box, are directly collected from cargo owners instead of truckers by PortCheck Inc. a not-for-profit company established by the local terminals collaborating in a federally approved discussion agreement. The ports had to resort to a sticker system to identify compliant trucks and postpone collection of the $35 fee on Oct. 1 because the electronic payment and tracking system was not ready. The PortCheck system will rely on radio frequency identification devices affixed to each delivery truck and readers at the terminals to monitor the traffic and only allow compliant trucks into the port. Beginning Nov. 17 no cargo is allowed to enter or exit a terminal until the cargo owner goes to the PortCheck Web site and claims their container. Customers have direct payment (debit card, credit card or electronic check) or account-based options for paying the fee. PortCheck Chief Executive Officer Bruce Wargo, said in a conference call with reporters. Companies with account privileges get credit approval that allows them to claim containers and receive a bill each Monday for the previous week’s activity. PortCheck is piggybacking on the pre-existing PierPass program the ports established in 2005 to reduce local congestion by shifting more container traffic to off-peak hours. What happens if PortCheck Inc. does make a profit or accumulates a considerable cash reserve. Will they lower their fees?

DELTA NOW WORLD’S LARGEST
Delta Air Lines Inc. has completed purchase of Northwest Airlines and is now the world’s largest air carrier. The new airline will keep Delta’s name and Atlanta headquarters. The new Delta will have $35 billion in annual sales and 75,000 employees, and deliver $2 billion in new revenue and cost savings, the airlines have said. The transaction was valued at $2.63 billion. Delta will also begin charging $15 to passengers for their first checked bag on domestic flights, and $25 for a second checked bag on domestic flights effective Dec. 5. Delta is also dropping a fuel surcharge for frequent flier award tickets, as well as a $3 fee for curbside check-in. 

86% OF CHARLOTTE FLIGHTS LANDED ON TIME
in October, one of the best months in the past 14 years for on-time arrivals nationwide, according to federal transportation statistics. US Airways was the third-best major airline for on-time arrivals in October, with more than 87 percent of flights nationwide landing on time. 

EUROPEAN STIMULUS PACKAGE
European leaders have backed an economic stimulus package of about $264 billion to ward off recession in 27 nations. Many European Union nations are entering a recession and the 15 nations that share the euro have already seen two quarters of negative growth since the past Spring. Leaders singled out automakers and builders as most in need of help.

JAPANESE STIMULUS PACKAGE
Japan ’s prime minister has announced a new $255 billion stimulus package to shore up the country’s economy. The new package includes $111 billion in tax breaks and public financing, and provides up to $144 billion to address the credit crunch, including capital injections for lenders and other financial institutions.

US TRADE DEFICIT LOWER BUT EXPORTS DECLINE
The US trade deficit dropped to $56.5 billion in September, 4.4 percent below the $59.1 billion recorded for August. The September deficit in goods and services was the lowest monthly figure since October 2007, according to the Commerce Department. Imports fell by a record 5.6 percent to $211.9 billion in September, the steepest monthly decline since September 2001. Imports from the European Union fell 3.8 percent and imports from the Organization of Petroleum Exporting countries dropped 27.1 percent. The volume of oil imports was the lowest since February 2003. Excluding crude oil, the trade deficit increased to $35.6 billion in September from 33.7 billion in August. Imports and auto parts fell by 3.8 percent to $732 million, as shipments from Germany , Japan , South Korea and Mexico all declined. Imports from China hit a record high of $33.1 billion in September. Merchandise exports by the US fell l6 percent, the sharpest drop since September 2001, to $155.4 billion, led by a drop of $3.3 billion in exports of commercial aircraft. Exports of capital goods, including civil aircraft, dropped after recording strong results in July and August. The value of US exports to European Union was at its lowest level since December 2007. China ’s exports shrank unexpectedly in November as global demand plunged, raising the thread of heavy job losses that could fuel political unrest, and a sharper downturn in the world’s forth-largest economy. November’s exports fell by 2.2 percent from the year-earlier period, the government reported Wednesday, a sharp drop from October’s 19.1 percent expansion and far below analysts’ forecast of up to 15 percent growth. Imports fell by 17.9 percent, pushing the trade surplus to a new monthly high of $40.1 billion. The fall in exports suggest China ’s economy has deteriorated despite a massive stimulus package meant to boost growth by encouraging Chinese consumers to spend more. The trade decline is also a setback from foreign exporters who hoped China might help support global demand as the US weakened. 

THE US ECONOMY
The world’s largest, is expected to contract by 2.8 percent in the fourth quarter of 2008, then drop an additional 0.9 percent in 2009, compared with 1.4 percent growth for 2008 as a whole, as reported by the Journal of Commerce. The report predicted recession for both Japan and the Eurozone countries. The Japanese GDP will drop 1 percent in the fourth quarter of 2008 and 0.1 percent in 2009, while Eurozone GDP will shrink by 1 percent in the fourth quarter and 0.5 percent in 2009.

HORIZON LINES TO RESTRUCTURE
Horizon Lines has announced a workforce restructuring initiative that will reduce its non-union workforce by at least 10%, or approximately 70 of its 700 plus non-union employees. Initially, Horizon will offer a voluntary severance program to certain eligible non-union employees. The company expects to complete the workforce reduction initiative by Jan. 31, 2009 . Chuck Raymond, President and CEO, commented that “while our company remains well-capitalized, with strong liquidity, our focus for 2009 will be on conserving cash and removing costs from our organization whenever possible”.

SOUTH CAROLINA TO START BUYING LAND FOR I-73
State and federal highway officials signed papers in the state capital Columbia for the northern stretch of Interstate 73. The action clears the way for buying land for the interstate between I-95 and the NC state line. Interstate 73 will eventually link Myrtle Beach and Michigan . It will provide the first interstate connection to the beach, which is the heart of South Carolina ’s $16 billion tourism industry.

NOVEMBER JOBS LOST
The United States lost 533,000 jobs in November, including 85,000 manufacturing jobs, the US Bureau of Labor Statistics reported Dec. 5.

CHINA PUS PTEXTILE SUBSIDIES BY $10 BILLION
On the eve of the expiration of quotas on Chinese textile and apparel products, the Chinese government has increased export subsidies to its textile industry by $10 billion, a 55 percent increase, the National Council of Textile Organizations reported. The Chinese government action came shortly after China pledged to reject protectionism and defend open markets during the recent G20 Summit on Financial Markets and the World Economy. This action also followed the release of US Government figures that showed that China had posted the biggest overall trade surplus in history with the US while manufacturing job losses in the US accelerated. NCTO President Cass Johnson has called on the Obama administration and the new Congress to take tough actions against China ’s predatory practices. Johnson stated “at a time of international economic turmoil, the Chinese government is essentially bankrolling the destruction of the US textile industry and the jobs of American workers”. On Nov. 20 China announced that it would increase a subsidy currently given to Chinese textile and apparel exporters from 14 percent to 17 percent. This move followed two similar increases already given to Chinese industry earlier this year, for an overall increase in the export rebate from 11 percent to 17 percent, or an increase of 55% since July 2008. As a result, Chinese exporters have seen export subsidies from the Central Government increase from $19 billion to $29 billion in just the last four months. 

HONDURAS
Honduras boasts the largest textile industry in Central America , benefiting from heavy investment by US, Canadian and Korean corporations. The Central American Free Trade Agreement allows companies using US yarn to export to the US duty free. Honduras has grown to be the third-largest suppliers of apparel to the US behind China and Mexico . 

LANCE TO BUY TWO COOKIE COMPANIES
Charlotte based Lance Inc., plans to buy two ailing cookie companies for $30 million: Archway Cookies LLC and Mother’s Cake and Cookie Co. Lance bid $30 million for the companies combined assets. It plans to use available liquidity under its current credit facilities to pay for the acquisition, according to a company news release. 

RATE INCREASES ANNOUNCED
Reimer Express will take a 3.9% increase January 5, 2009 on its Canadian domestic tariffs. FedEx Freight will implement a general rate increase of 5.7% effective January 5, 2009 and will apply on interstate and intrastate traffic, as well as certain shipments between the US and Canada and Mexico . Please contact your FedEx Freight representative if you have questions. The new base rates and rules tariff for FedEx Freight will be available on the company’s Website at www.fedex.com/us/freight/main after January 5.

TEAGUE RECEIVES AWARD
The Gaston Area Traffic & Transportation Association has presented Bill H. Teague their annual Lifetime Achievement Award December 9 at the Gaston County Country Club. President Willie McClelland also presented checks to Hospice, The Gaston County Battered Women's Shelter, Holy Angels and the Mt. Holly CRO . 

Merry Christmas to all our Faithful NCLTL Members and Best Wishes for a Prosperous 2009

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