House pushes cap on gas tax

Posted November 28, 2011

State House lawmakers are moving quickly tonight to put a cap on the state's gas tax.

North Carolina's gas tax is linked to the wholesale price of gas. It adjusts automatically every six months. It's scheduled to increase by nearly 4 cents per gallon on January 1st. 

Republican House leaders are pushing a bill, H645, that would postpone the increase for six months, till July 1, 2012. 

Capping the tax at its present level would mean the loss of $95 million in revenue for the state's transportation system.  About a third could be offset from reserves, supporters say. But the rest would come out of operating funds already budgeted for the year.

Rep. Mitch Gillespie, R-McDowell, says the other 64 million or so in cuts would be spread throughout the DOT and DMV. He said he expects the impact to be "minimal," although he conceded "we've not had time to go in and analyze any reserves they might have" to help cover the cuts. 

The measure specifically authorizes the DOT to cut personnel. And the cuts could mean job losses outside the state payroll as well. Christee Barbee with the Carolina Asphalt Pavement Associations says a $95 million reduction in spending translates to nearly 2800 fewer jobs for contractors. 

"We're talking about an industry that's already at 30% unemployment," Barbee said. "Transportation construction has the highest unemployment in the construction sector." 

Rep. Bill Owens, D- Pasquotank, made the same argument in the House Rules committee this afternoon. "When you take this money, you cut out jobs," he said.

Owens asked why the cap was being taken up in such a hurry and with so little study.  "I think there ought to be more looking at what we're doing."  

House Rules passed the cap along party lines. And House Finance passed it with strong bipartisan support, 28-3.

It's expected to be on the House floor for a vote this evening.

Its fate in the Senate, however, is less certain. Senate leaders have not been enthusiastic about the cap, saying the state already doesn't have sufficient money to maintain its roads.  

The measure would also set up a comprehensive study of the way the state pays for roads, and how it allocates the money it gets. That study would be conducted by an outside consultant and would be presented to the legislature in 2013. 


This blog post is closed for comments.

Oldest First
View all
  • ptrrrk1 Nov 30, 2011

    Vote out the republicans

  • AlbertEinstein Nov 30, 2011

    Flow Easy... the scenario that you suggest is very typical of what I would consider as a socialistic representation in that your expectations of income exceed your potential. Personally, I do not subject myself to the annual income promised - rather, I spend and plan my spending on what I have in the bank. If the bank looses my money, then and only then can I claim that I have lost something rather than expend the energy on what "could" be the input to my bank.

  • Come On_Seriously Nov 29, 2011

    Ok Einstein, actually it is pretty common practice and you can indeed claim to lose $95M in expected revenue. The tax is already 'in action' and set by law- the discussion is about postponing the automatic increase.

    Try this- if you make $50k/year and have an accident and can't work for an entire year, would you consider that a $50k loss of income or just a year off? Since you have bills to pay, food to buy, family to support and such, its a loss even though you haven't technically earned it yet.

    Keep the tax as it is. If it hurts too much to pay it, try using public transportation or walking or riding a bike. The gas tax is a use tax- the frequency of your gassing up is tied to the amount you use the roads, and the more you are liable for helping maintain them. If you have a vehicle that costs a fortune to fill up, that's just bad planning on the car purchase.

  • AlbertEinstein Nov 28, 2011

    Very improper math here... you cannot claim to loose something that has not yet been established as income. Saying, "loss of $95 million" for a tax that has not yet been put into action is very poor reporting.