Senate tentatively OKs gas tax changes

Posted February 11, 2015

Pumping gas, gas pump

— After a debate centered more on semantics than substance, the state Senate gave preliminary approval Wednesday to a measure that would lead to higher gas taxes in North Carolina over the next few years.

Senate Bill 20 is scheduled for a final Senate vote Thursday.  It then goes to the House.

Republicans, who have long argued that state gas taxes are too high, called the measure a "tax cut" because it would lower the current gas tax from 37.5 cents per gallon to 35 cents for four months. That would cost the state $33 million, mostly to be paid for by laying off 500 Department of Transportation workers and eliminating 50 vacant positions.

However, the legislation would eliminate a steeper tax cut to 30.4 cents per gallon scheduled for July because falling gas prices would factor into the current formula for determining the state tax. Instead, the bill sets the state's minimum gas tax at 35 cents. It also raises the variable part of the gas tax in future years.

The result would be an additional $1.2 billion in revenue over the next four years. Leaders say that money is needed to pay for the upkeep of the state's roads and bridges. If the state's gas tax were to be allowed to drop under the current formula, backers warn, the state could find itself $800 million short on needed funding by 2019.

"Just to let you know what this bill does in everyday common speech," said sponsor Sen. Bill Rabon, R-Brunswick, "it cuts, it freezes and it stabilizes a very volatile tax."

Rabon added that the gas tax supplies about 70 percent of the state's transportation spending and that the ups and downs in global petroleum markets are making it difficult to plan DOT's budget.

"As we move into spring break," said Sen. Michael Lee, R-New Hanover, "this gives folks like myself and my family and other families across the state an immediate tax cut as we go into April."

Sen. Ben Clark, D-Hoke, objected to the terminology, pointing out gas taxes will be higher each year under the proposal than they would be under the current formula.

"I think most citizens in the state of North Carolina would consider that to be a motor fuels tax increase," Clark argued.

"This is not really about semantics," Rabon replied. "This is a two-and-a-half-cent tax cut, period."

"We must be clear to our constituents. We must be above board. This is a tax increase. Period, plain and simple," Clark came back. "You don’t generate $1.2 billion over four years with a tax cut."

Gas tax comparison (estimated)

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Source: Fiscal Research Division

Sen. Terry Van Duyn, D-Buncombe, said GOP lawmakers should instead reconsider their 2013 tax reform that cut hundreds of millions from the tax bills of corporations and the state's wealthiest taxpayers.

"Slipping a tax increase into a must-pass bill and then calling it a tax cut is not fair to working families in North Carolina who are still waiting for their share of the 'Carolina Comeback,'" Van Duyn argued.

"We can use semantics, we can talk about all we want to," answered Sen. Tom Apodaca, R-Henderson. "It’s the same tired rhetoric we’ve heard, and it’s just not true. The voters spoke in November. Everybody had their say, but some people can’t get over what happened."

Republican leaders repeatedly asked Democratic critics if they wanted to lose millions of dollars in transportation projects and municipal grants in their respective districts.

"If you don’t want your road money in your district, please vote against this bill," Apodaca said.

The vote was 36-14, with Democratic Sens. Joel Ford of Mecklenburg County, Floyd McKissick of Durham County and Josh Stein of Wake County voting for the proposal and Republican Sen. Tamara Barringer of Wake County voting against it.


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  • Roy Hinkley Feb 12, 2015
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    View quoted thread

    You misunderstood.
    The NC State Senate is moving ahead with adjusting (i.e. increasing) the gas tax, not the US Senate. As such, they have no control over the gas tax in other states.

  • Jenna Moore Feb 12, 2015
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    View quoted thread

    Bob, that was covered in an earlier story. http://www.wral.com/gas-tax-changes-head-for-senate-vote/14437302/


  • Carl Keehn Feb 12, 2015
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    View quoted thread

    It goes to the maintaining and building of state roads. North Carolina maintains a much larger proportion of state roads than the other states you mentioned, second only to Texas. According to 2009, the most recent national statistics, North Carolina supports nearly 10% of the entire nation's rural state highway infrastructure. In the other states you mentioned, a significant portion of the roads are maintained on a county level, passing the cost down to a different taxing authority.

  • Bernadette Dan Unger Feb 12, 2015
    user avatar

    If the Senate has the power to limit the gas tax in NC then they should set the same tax in every state at $.35 per gallon. But beware people, government is getting to far into our everyday lives and that will have it's own costs.

  • Tom Boswell Feb 12, 2015
    user avatar

    According to the Tax Foundation's web site our gas tax rate is the country's 8th highest. Our neighbors are Virginia 40th, South Carolina 47th and Tennessee 36th. Where is this revenue going that on a new expressway we have to have a $12 round trip toll to travel on 36 miles of concrete.

  • Mark Farmer Feb 11, 2015
    user avatar

    we are still one of the highest gas taxed state. maybe you should reduce it 20 cents.

  • Stuart Heyel Feb 11, 2015
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    Ooopppss I forgot part of my comment that might make some sense..... How about they pick a number that will fund the needed projects not vary based on wholesale price and doesn't lay off a lot of hard working people. If the number needs to change in two years to fund repairs..... Ahduuuhh change the number...... If it needs to change in six months.... change the number......

  • Stuart Heyel Feb 11, 2015
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    I find it truly amazing this will only effect 500 current DOT employees.... But not to worry the excellent social net that is available for unemployment and health care they will loose will take care of these loyal state employees with a swift kick in the a- ss..... And we put these these fools in Raleigh to govern.... What an inept group.............. Statesmen my rear end.........

  • Dan Kimrey Feb 11, 2015
    user avatar

    Thank you GA. Just what working families need. Yes, the voters spoke. What they got were tax and spend Republicans.

  • Bob Cooke Feb 11, 2015
    user avatar

    I read it twice and I still don't understand. I believe WRAL should have given more details about our current gas tax system (like what is the variable part).