Raleigh, N.C. — Lawmakers continue to tinker with the state gas tax in the House budget, proposing to drop it to 33 cents per gallon next January.
Appropriations subcommittees began reviewing Thursday morning various sections of the House's proposed spending plan for the next two years, and the full House is expected to vote on the budget next week.
In March, the House and the Senate agreed to put a floor under the tax, dropping it from 37.5 to 36 cents per gallon as of April 1 and eventually lowering it to 34 cents per gallon by late 2016. The effort was designed to head off a scheduled July 1 decrease to about 30 cents a gallon.
Lawmakers have said the gas tax revenue has become too unreliable for long-range highway construction and maintenance projects – vehicles are becoming more fuel-efficient, and people adjust their driving patterns in response to rising and falling gas prices – so they want to find other sources of revenue for road projects.
A bill pending in the House would drop the gas tax to 30 cents per gallon while raising fees charged by the state Division of Motor Vehicles by 50 percent and would adjust other taxes and fees as well to generate more highway revenue.
The higher DMV fees also are included in the budget proposal, but Rep. Grier Martin, D-Wake, said the move to raise fees and lower the gas tax results in a loss of $12.4 million in funding to the Strategic Transportation Investments program the Department of Transportation put in place two years ago to better match funded road projects with the state's needs.
"In making that shift, we've short-changed STI," Martin said.
Rep. Paul Tine, U-Dare, noted that gas tax revenue has been declining for years, and making the budget more reliant on fees and other sources of revenue would eventually produce more STI funding.
"The STI is a 10-year plan, and this is a two-year budget," added Rep. Frank Iler, R-Brunswick.