Raleigh, N.C. — Gov. Pat McCrory on Tuesday signed legislation that will cut the state gas tax in the short term but raise it in the long run.
Senate Bill 20 would lower the state gas tax from 37.5 cents per gallon to 36 cents per gallon on Wednesday. But it would cancel out a much larger cut to the gas tax scheduled to take effect in July.
Rep. David Lewis, R-Harnett, said the current formula by which the gas tax is calculated, passed 25 years ago, is outdated and too inherently unstable to allow the state to plan for road and bridge construction and maintenance.
If the gas tax were allowed to drop to 30 cents in July, as it's scheduled to do, it would mean $400 million less in transportation funding. Much of that money goes to cities and counties for their transportation needs.
"This will benefit each and every constituent that we serve because that’s what paves the roads in our districts, our towns, our communities," Lewis said.
While conceding that the tax would likely be higher this summer with the bill than without it, he argued the state can't afford not to make the change.
"What’s at risk? Four hundred million dollars to our communities for safe roads and bridges if we don’t change this formula," Lewis said. "We need to provide the stability that this bill provides to make sure that we can meet our obligations."
Rep. Paul Luebke, D-Durham, took issue with the GOP characterization of the measure as a tax cut.
"Consumers of this state need to know that, on July 1, in rounded terms, they’ll be paying 6 cents more for a gallon of gas," Luebke said. "I think it’s important for people to know that."
Rep. Jeff Collins, R-Nash, rose to challenge Luebke, asking, "You’ve become a champion of tax reform and of lowering taxes?"
"Rep. Collins, I’m telling it like it is. You can interpret it as you wish," Luebke replied. "When people do something for what they believe is a good cause, they ought to call it what it is."
Democrats, including Minority Leader Larry Hall, criticized Republicans for raising the gas tax while delaying a more comprehensive fix for transportation funding, even while planning to take next week off.
"It was more convenient to go ahead and raise this tax on these working North Carolinians," said Hall, D-Durham.
Some Republicans were also critical of the bill's temporary nature.
"This is just one big old Band-Aid," said Rep. Gary Pendleton, R-Wake."It needs to be fixed."
Republicans countered by pointing out how much the scheduled cut would cost local governments, potentially leading to higher local property taxes.
"You know those potholes you like to fix? Gone," said Rep. Charles Jeter, R-Mecklenburg. "There are things about every bill that we can always find that we don’t like."
Despite nearly an hour of debate, much of which centered on other tax changes in the bill, the final House vote was 79-39, a larger margin of support than the bill received in Monday night's second-reading vote.
The Senate also gave the bill final approval Tuesday afternoon by a vote of 41-8.