House makes big changes to gas tax bill

Posted March 3, 2015

— House lawmakers began debate Tuesday morning on a Senate proposal to increase the state's gas tax, but they're making major changes to the bill.

As it passed the Senate last month, Senate Bill 20 would have lowered the current gas tax from 37.5 to 35 cents per gallon for three months. But it would have set 35 cents as the state minimum, keeping the gas tax from falling to 30 cents per gallon in July – and even lower next January – as scheduled.

The Senate version also permanently increased the variable portion of the tax and required the Department of Transportation to cut 500 filled positions almost immediately.

The version rolled out in the House Finance Committee on Tuesday morning is a mostly temporary measure. It would lower the current gas tax to 36 cents per gallon instead of 35, stopping the scheduled drop to 30 cents in July as the Senate bill did. But the rate would be allowed to return to its current formula in January. It would cut 40 unfilled positions at DOT to pay for part of the lost revenue.

House sponsor Rep. Bill Brawley, R-Mecklenburg, said that's intended to pressure lawmakers to pass permanent changes to the tax by the end of this year's session.

"This patch is simply to allow this body time to come up with and debate a more comprehensive fix to the problem of transportation funding,” Brawley said.

The bill passed the Finance Committee on a voice vote and also cleared the House Appropriations Committee later in the day. House leaders say it is due to be taken up and voted on the House floor Wednesday and Thursday.

Brawley said another section of the bill cutting 500 positions at NCDOT this fall was also intended to put pressure on lawmakers, but Rep. Skip Stam, R-Wake, successfully argued to have that cut removed, saying those positions are needed for road construction and repair.

"I’m all in favor of putting pressure on ourselves to get something done," Stam said. "There’s no reason to put a couple of thousand employees in the position of wondering for the next six months or so whether they’ll have a job."

As in the Senate, there was a lot of discussion about whether the legislation amounts to a tax cut, a tax hike or something in between.

Rep. Paul Luebke, D-Durham, said it's a tax increase. Come July, he said, "For the middle-class consumer at the pump, those consumers will pay 6 cents more per gallon for gasoline than they would otherwise without this bill."

But Rep. David Lewis, R-Harnett, argued the opposite. "Thirty-six cents is less than [the current rate of] 37.5 cents."

Both progressives on the left and free-market groups on the right have been pressuring lawmakers not to raise the gas tax. But the proposal has the support of both the North Carolina Chamber and the North Carolina League of Municipalities, who say the fix is needed to stave off deep cuts in transportation funding as the gas tax plunges this summer.

"We’re not raising the tax. We’re not allowing it to decrease as much as it would have absent this bill," said Brawley. "I’m not selling this as a tax decrease or anything.

"We have essentially two choices," he added. "We can drop the gas tax by 7.5 cents, or we can fill the potholes and fix the roads. Pick one."

"It is what it is. Everybody can see it for what it is, and I’m not going to go down that rat-hole," agreed Rep. Charles Jeter, R-Mecklenburg.

The gas tax has been an increasingly unstable revenue source for some time. Stam pointed out that is driven by "three good things": falling gas prices, increasing fuel mileage and more cars that don't use gas at all.

Supporters say the House bill will buy lawmakers a few months to find a new, more stable solution.

"The gas tax as it's written will not work. This bill gives us an incentive, for lack of a better term, to do the right thing," Jeter said. "Let’s pass this bill, and let’s fix it before we get out of here."

The measure passed the House Finance Committee on a voice vote that sounded extremely close.


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  • Joanne Batjer Mar 4, 2015
    user avatar

    it needs to be lowered

  • Lorna Schuler Mar 3, 2015
    user avatar

    "visit some of our neighboring states...."
    Ummm.... yeah, start with real neighbors SC and VA. And please, get off the interstates to do your road inspection. You will soon quit complaining about NC roads, trust me.

  • Carl Keehn Mar 3, 2015
    user avatar

    View quoted thread

    It's actually not difficult to figure out. North Carolina maintains a greater proportion of roads than most other states. The majority of rural and urban roads are maintained by the state, we are second only to Texas in the number of state roads.

    In other states, roads are maintained not only on a State level but also on the county level. You are still paying for the upkeep, you are just paying your county, not the State.

  • Adam Pearce Mar 3, 2015
    user avatar

    I think they need to hire one independent consultant to overhaul DOT operations. The DOT is just as bloated as any other gov't entity, IMHO. This setting of a state minimum at 35 cents is dangerous and unpredictable. Sounds like they think with the "if it ain't broke, don't fix it" mentality, but it IS broke. Fix IT!

  • Mike C Mar 3, 2015
    user avatar

    I have yet to figure out why NC has one of the highest gas taxes and some of the worst roads in the country. Instead of raising the gas tax, why don't our DOT officials visit some of the neighboring states and see what makes their system work and our fail?

  • Matt Price Mar 3, 2015
    user avatar

    This is all a perfect example of what happens when you give a drunk booze and then try to ween her off.

    The government needs to start to make hard decisions - since our roads are horrible - loosing those 500 jobs isn't going to hurt NC in the long run.

    In fact, I went to Tennessee and they had better roads for the most part than NC and they have no income tax - so go figure if they can do it - why can't NC?

    Me thinks the DOT is drunk, and needs Alcoholics Anonymous. Now they have this obscenely high tax rate - they don't want to let it go.