NC gas tax cap proposal falls short

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North Carolina House members agreed  Monday to temporarily cap the state’s gasoline tax – on the verge of sharply  rising in the new year – but the Senate decided to leave Raleigh without taking  up the idea, saying it wasn’t the right time to consider it, reports the Winston-Salem  Journal. The full House tentatively backed a bill keeping the state  motor fuels tax at 35 cents per gallon through June 30. The gas tax is  recalculated automatically twice annually – Jan. 1 and July 1 – based on a  formula linked to wholesale gas prices. The Legislature’s nonpartisan fiscal  staff estimates the state tax would grow to as high as 38.9 cents without the  cap.

“Maybe 4 cents on the gallon is not a lot,” said Rep. Edgar  Starnes, R-Caldwell, before the House voted 96-23 in favor of the bill. “But if  you’re unemployed or underemployed, then every penny counts and these are the  people that we need to help at this time.”

The measure could receive final House approval today, but  it didn’t matter because the Senate scheduled to hold a procedural session just  after midnight Monday and go home without taking up any more legislation. That  means the bill is dead.

Senators were less inclined to lose road-building funds that  have been projected in approving this year’s budget. Senate leader Phil Berger,  R-Rockingham, said members are concerned that Democratic Gov. Beverly Perdue,  not the Legislature, would decide which projects get delayed. The House bill  doesn’t make those decisions.

“Now is not the time for us to be dealing with that issue,”  said Berger, adding that the Senate would be glad to examine the gasoline tax  during the budget-adjustment session next May, and create a plan that could  actually cut the tax, not cap it. Any bill also would be sent to Perdue, who  would be asked to make the bill law or veto it.  The cap would have meant $95.8 million less in revenues, although the bill’s top advocate, Rep. Mitch Gillespie, R-McDowell, said about a  third of that loss would be canceled with yet-used money sitting on the bottom  line in the Highway Fund.

Supporters of freezing the cap at the current rate said it  would give relief to the public while promoting accountability within the Department of Transportation. The House bill would have directed a study of the  DOT tax structure. Some people believe the automatic recalculation of the tax  keeps the issue from becoming too political. Others argue it prevents lawmakers  from having to make tough decisions on the gas tax.

“This is the first step in the right direction,” said Rep.  Mike Stone, R-Lee.  North Carolina’s current combined federal-state gasoline tax of 53.7 cents ranks ninth-highest in the nation, the American Petroleum  Institute said. North Carolina’s state tax grew by 2.5 cents per gallon this  past July.  Opponents said the gas tax goes up because materials to  build roads – asphalt among them – increase at the same time because they’re  made from petroleum, too. “If we don’t have these dollars to look after our highway  system, we’re making a sad mistake,” said Rep. Jim Crawford, D-Granville.

Jim Trogdon, the chief operating officer at the Department  of Transportation, said the agency estimates capping the tax for six months  would mean 400 miles of road resurfacing and 72 bridge repairs would be delayed.  The bill, which would have required cuts throughout the agency, also could have  meant longer lines at driver’s license offices, he said.

“This is a true and significant impact,” said Trogdon,  adding that there are also no promises limiting the tax will result in lower prices at the gas pump. Cap supporters said the state would still spend more money overall on bridge and road repairs with a cap.

Christie Barbee, a lobbyist for the Carolina Asphalt  Pavement Association, told the House Finance Committee the bill also could have  placed up to 2,800 construction jobs at risk, although Gillespie said later he  believed the amount was overstated. Still, the bill passed the committee by a 28-3 wide margin, with several Democrats joining Republicans in backing what’s  considered a politically popular measure. Read More.

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