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GOP eyes resurrecting cap on state gas tax

Posted March 8, 2011

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— As fuel prices soar, Republican lawmakers are looking at once again capping the state tax rate on gasoline.

The state eliminated the cap two years ago, flipping it upside-down to set a minimum tax of 29.9 cents per gallon. The tax is now at 32.5 cents per gallon.

The state Department of Revenue recalculates the gas tax, which is tied to the wholesale price of fuel, every six months. Officials said the rate would likely increase by 2 to 2.5 cents in July because of higher gas prices.

The price of gas has been climbing steadily in recent weeks and is at a two-year high, averaging $3.51 a gallon nationwide.

"I worry about that kind of loss of money (people spend on gas) that would normally go for goods and services," said Rep. Bob Rucho, R-Mecklenburg.

North Carolina's gas tax is the highest in the Southeast, and lawmakers said it might be time to rein it in to help both consumers and retailers statewide.

"I think we need to fix the gas tax because people are crossing the border to Virginia and South Carolina (to fill up)," said Sen. Neal Hunt, R-Wake.

The gas tax is the largest revenue source for the state Department of Transportation, and officials said the agency would lose $1 billion over the next decade if the tax is capped.

"It is a lot of money, particularly when you look at all the needs we have in this state, to take care of our aging infrastructure and to take care of the congestion problems we have in the state," said Mark Foster, chief financial officer for the DOT.

Seventy-five percent of the gas tax funds road maintenance projects, and the DOT estimates that 18,335 miles of pavement statewide wouldn't be resurfaced if the gas tax is capped at its current level. That includes 890 miles in Wake County, 341 miles in Cumberland County and 278 miles in Durham County.

GOP eyes resurrecting cap on state gas tax

Hunt said DOT can simply shift money slated for new projects to maintenance.

"Stop projects that aren't needed. Put the money back in maintenance programs. Preserve what we've got, and cap the gas tax at the same time," he said.

Foster and other DOT officials argue that there is little correlation between the gas tax and the actual cost at the pump. Whether a station in Raleigh charges $3.47 or $3.59 a gallon, the tax is the same, they said.

Some drivers support a cap, saying they need every little bit of help they can get.

"I think every cent counts right now, especially the way the economy is," driver Danielle Davis said.

Driver Michael Chavis said, however, that he doesn't believe a gas tax cap would help ease the pain in his wallet.

"Unless you're getting 100 gallons or 200 gallons of gas, it (won't) make a difference," Chavis said. "If you're getting 15 gallons, what's 2 cents (a gallon)?"

75 Comments

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  • waterford04 Mar 9, 2011

    How can you lose 1 billion dollars that you don't even have yet? In my house I don't spend money unless I have it on hand. If you want to save some money stop hiring 20 people to do the job of 10. I am tired of seeing construction sites that have multiple works standing around looking at the sky.

  • dlk13ster Mar 9, 2011

    "While that might be accurate,"

    It is. Most of our easily-accessible reserves are either already-tapped, or depleted. Only recently have oil prices made the more hard-to-get resources (e.g. oil shale, deep water) economically viable.

    "If it is so limited, then why isn't some technological genius out there inventing a motor that uses something more efficiently than fossil fuels?"

    They did.

    They're called FlexiFuel cars. Brazil uses them (hence the fuel independence), and they can operate on gas, ethanol, or liquid natural gas, meaning that customers get to CHOOSE which ones they want to use to fuel their cars.

    There are also gas-electric cars like Chevy Volt, highly efficient Plug-in hybrids (PHEV) like the Prius+, and all-electric vehicles like the Nissan Leaf and Tesla Roadster and S-series.

    They've also developed biodiesel for trucks, buses, & cars from used cooking & vegetable oil.

    There are also some more out-there techs, & the Ford Clarity hydrogen fuel cell car.

  • sillywabbitthepatriot Mar 9, 2011

    "The US does not have enough oil left to supply our demand for more than a few years"

    While that might be accurate, that could also be reason to take advantage of a market in which you can gouge people into paying for something they think is limited. If it is so limited, then why isn't some technological genius out there inventing a motor that uses something more efficiently than fossil fuels? I don't really think oil is as limited as it appears to be.

  • wildervb Mar 9, 2011

    "How about a gas rebate at the pump! We should be getting oil from US sources, without limitation and refining it here as well. We are just fools to allow the middle east to control our gas pump pricing. Drop the taxes and cap the wholesale price at $25 a barrel."

    1. The US does not have enough oil left to supply our demand for more than a few years. Doesn't make sense to pump out our last reserves just for this generation's convienance.

    2. Dropping the gasoline tax will make deficits worse and take away all funding for highway repairs.

    3. Capping the price at $25 a barrel, that really is socialism, only a handfull of countries control gasoline prices China, Iran and Venzuala are three of them.

  • Tax Man Mar 9, 2011

    How about a gas rebate at the pump! We should be getting oil from US sources, without limitation and refining it here as well. We are just fools to allow the middle east to control our gas pump pricing. Drop the taxes and cap the wholesale price at $25 a barrel.

  • citizensoldier16 Mar 9, 2011

    NC has the highest gas tax of all the states around us. There used to be decals at the gas pumps showing the taxes by state...but when NC raised its taxes even more, those quickly disappeared.

  • ykm Mar 9, 2011

    Here is a list sillywabbit
    Ferries - $41 million
    • Drivers Ed for teens - $31 million
    • Bike paths - $1.1 million
    • Visitor centers - $400,000 annually

  • ykm Mar 9, 2011

    Great comment MEP.

  • oldrwizr Mar 9, 2011

    Well now there's a right-wing philosophy I can get on board with!

  • sillywabbitthepatriot Mar 9, 2011

    Where does the other 25% of the gas tax funds go? I'd like to know. Without reporting that fact, this news about the GOP putting a cap on gas tax is inconclusive. You can cap the gas tax without compromising the 75% to fix the roads, so where does the other 25% go WRAL?

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