NCDOT In Financial Crunch From COVID-19 Losses
The state Department of Transportation says it has reached a milestone that is forcing it to make changes that include layoffs and delays of future plans.
The department is required to have a cash floor of $293 million. Now that it’s fallen below that threshold, no new contracts can be put in place and future projects are on hold.
DOT officials say work that is already underway can continue, and highways can be maintained with the materials it has on hand.
But it can’t make right-of-way purchases, buy new equipment or enter into new construction contracts.
The DOT says it has laid off nearly half its temporary employees and some of its consultants. It’s also working on a department-wide furlough plan.
DOT makes most of its funds off gas taxes, highway use funds, and DMV fees. With fewer people driving because of stay-at-home orders, that revenue has declined by about $300 million for the current fiscal year ending in June. A loss of $370 million is projected for the next fiscal year.