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.