Senate tentatively OKs gas tax changes

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."

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.