House pushes cap on gas tax

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.