Take Five: NCAA’s Jasper Stem weighs in on the aggregates market in North Carolina

Kerry Clines

December 6, 2017

North Carolina Aggregates Association
Jasper (Jay) G. Stem, Jr., P.E., executive director, North Carolina Aggregates Association.

AggMan understands that the aggregates business is made up of local businesses throughout the nation. As such, we are focused on providing insights into these local markets, as well as national markets, in print and online.

We contacted Jasper (Jay) G. Stem, Jr., P.E., executive director of the North Carolina Aggregates Association (NCAA), who was kind enough to give us his take on what’s happening with the aggregates industry in the state of North Carolina.

1) How would you characterize the state of the aggregates market in North Carolina?

Stem: The state of the aggregates market in N.C. is improving, but it is not evenly distributed across our state. The majority of the growth is occurring along the I-85/I-40 corridor from Charlotte to the Triad (Winston-Salem/Greensboro) to the Triangle (Raleigh/Durham/Chapel Hill). Some along the coast in Wilmington and in the mountains around Asheville. The rural eastern and western parts of our state are seeing slower growth.

2) How is North Carolina addressing transportation funding?

  • The funding for our transportation system is heavily dependent on revenue from the state motor fuels sales tax — it accounts for almost 60 percent of our funding. Being so heavily dependent on a funding source that will be decreasing in the future because of increased café standards, more electric cars, etc.; our General Assembly, in 2015, passed a bill that increased our DMV fees (which had not been increased in a decade) and eliminated the transfer of approximately $200 million in transportation dollars to the state’s general fund to pay for the Highway Patrol and other non-transportation related expenses. These changes equate to about $350 million per year in additional transportation dollars.
  • With project delivery delays, the NCDOT’s cash balance has built up over the past few years, so the Secretary of Transportation plans to “spend down” the cash balance over the next two years by accelerating the project delivery process. This will increase our annual highway lettings from $1.7 billion to $2.6 billion.
  • Our Secretary of Transportation and the General Assembly are talking about additional revenue from a possible transportation bond referendum during the 2018 legislative session — between $2 billion to $3 billion. The bond package would be in two years, following the NCDOT spending down the cash balance.
  • The General Assembly has a legislative study committee that’s making recommendations for long-term transportation funding. With the future decline in revenues from the state motor fuels sales tax, the General Assembly must find alternative funding sources to replace that revenue stream.

3) What are the big opportunities for producers in North Carolina (DOT projects, commercial construction, etc.)?

  • With the increased revenue for transportation and the accelerated highway lettings, NCDOT has revised their Transportation Improvement Plan to include an additional 144 projects.
  • Commercial and home construction are very robust along the I-85/I-40 corridor, in Wilmington, in Asheville, and emerging rural markets outside of the major Metro areas.
  • The Atlantic Coast Pipeline will be traversing a number of rural counties in the eastern part of our state, the planned CSX intermodal project (it has been placed on hold, pending reassessment of CSX’s traditional hub-and-spoke strategy), the possibility of landing the second HQ for Amazon and/or the new Toyota-Mazda Factory will be a huge benefit for our members.

4) What are the big obstacles for producers in North Carolina (legislation, neighborhood groups, etc.)?

  • Like every state, one of our big obstacles will always be increasing regulations on our industry from the agencies that regulate us.
  • In North Carolina, our producers are facing an immediate problem in finding qualified skilled workers to hire. Making the situation even worse, many of their experienced employees are nearing retirement age and will need to be replaced. NCAA is educating our legislators about the need to have the community/technical colleges focus on short-term vocational training that can be completed in weeks, not years.

5) What would you like your peers to know about aggregates production in North Carolina?

 

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