Raleigh, N.C. — The House gave preliminary approval Wednesday to legislation adjusting the state tax code, including how the tax on gasoline is calculated.
After a 70-47 vote on second reading, the House will hold a final vote Thursday before the proposal returns to the Senate.
The Senate initially called for lowering the current gas tax from 37.5 to 35 cents per gallon for three months and then setting 35 cents as the floor on the tax, preventing it from falling to 30 cents per gallon in July – and even lower next January – as scheduled.
The House version would drop the tax to 36 cents per gallon and hold it there only until January, when it would be allowed to return to its current formula.
Rep. Bill Brawley, R-Mecklenburg, called the House proposal "a patch" to hold the line on the tax until lawmakers could craft a better long-term plan for funding state road construction and maintenance.
"We have tied our revenue for transportation to a volatile, internationally traded commodity," Brawley said, adding that a more stable system is needed.
House Democrats engaged in the semantic debate that began last month in the Senate, calling the plan a tax increase because it won't let the gas tax fall as expected this summer.
"We have the potential of putting another burden on our citizens," said Rep. Charles Graham, D-Robeson, who noted that the House approved a tax break for airlines on jet fuel earlier in the day.
"Our actions do matter," Graham said. "They matter to the people we represent.
Rep. Nelson Dollar, R-Wake, praised Democrats' concern over taxes, but he said not stabilizing the gas tax will cost the state money needed for highway repairs and upgrades.
"We have problems enough as it is maintaining our roads," Dollar said. "Don't put your citizens and your families at risk."
Allowing the tax to drop this summer could cut state transportation funding by 20 percent, Brawley said, making it difficult to keep up with the long-range construction plans the Department of Transportation has crafted in recent months.
He contrasted that loss with the added amount North Carolina drivers would pay at the pump from July through December, which he said was about $3.75 per month.
The House approved one amendment to the bill, eliminating a provision that would have taxed senior citizens who transferred money in their tax-free retirement accounts to charities.
The House on Tuesday added a provision that eliminates an income tax charge on people who have had their bad mortgages written off.