Local News

Easley Calls For State Gas Tax Freeze

Posted May 5, 2006

— N.C. Gov. Mike Easley announced Friday afternoon that he will call on the General Assembly to freeze the state gasoline tax so that the rate will not increase from the current level.

This freeze will be in addition to broad-based tax relief and $10 million in heating and cooling assistance for the needy to be included in the governor's budget, which will be released next week.

Since 1992, North Carolina law automatically raises the gas tax when there is a substantial increase in the cost of fuel. With Easley's proposed freeze, the rate could decrease but it will not go above current levels.

The current state gas tax is 29.9 cents a gallon. There is no state sales tax on gasoline in North Carolina, while other states impose both a gas and sales tax on consumers.

"I believe that it is appropriate to put a freeze in place," Easley said in a written news release. "Even if gas prices continue to rise, the state tax will not."

The gas tax is a major source of money to build and maintain the state's roads. To ensure that road projects proceed, Easley will provide an additional $200.7 million to the Highway Trust Fund for road construction and $18 million to the Highway Fund for maintenance and contract resurfacing.

"The increased cost of fuel has placed an undue burden on all Americans," Easley said. "We have done our part at the state level to address energy challenges."

Six months ago, Easley called on President George W. Bush to launch a formal investigation into the record-high profits recorded by gas companies during the previous year.

"As these oil companies, once again, announced record profits, the White House hinted it might look into the matter," Easley said. "Today, I repeat my call for federal action and urge the president to stop waiting and start helping."

The cost of highway construction and maintenance has nearly doubled over the past two years. Asphalt is a petroleum-based product, and its price increases as the price of oil increases. Today it costs an average of $4.4 million to pave a mile of four-lane interstate highway compared with $3.4 million two years ago.

North Carolina has the nation's second largest system of state-maintained highways, nearly 80,000 miles. By comparison, Virginia's road system is 57,500 miles, South Carolina's 47,500, Georgia's 18,000 and Tennessee's 13,800.


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