Lifting gas-tax cap could help DOT funding woes

Posted November 6, 2008
Updated November 7, 2008

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— North Carolina transportation officials say removing the cap on the state's gas tax could help a projected shortfall this coming year.

Mark Foster, the Department of Transportation's chief financial officer, says the state agency lost $179 million over the past two years because of the cap.

Its projected loss for this budget year is $412 million, he said.

"A bridge replacement probably costs $2 million. That's a lot of bridges we could have repaired or replaced with that $400 million," Foster said.

About 75 percent of the gas tax goes directly to the state highway fund for road and bridge maintenance as well as repair and preservation. The remaining portion goes for new construction.

Without the extra revenue, Foster says the DOT is forced to absorb construction costs, which have doubled in the past six years.

Without the cap, which is set to expire in July 2009, the DOT says it would have collected an additional 5 cents a gallon during the first half of this year and 10 cents more during the second half.

"Obviously, none of us want to pay more, but the reality is without that money to repair our roads and keep our roads safe, we all suffer," Foster said.

North Carolina's gas tax is 29.9 cents per gallon – 12 cents above the national average, and other charges are added to that. A portion of the tax is a flat rate and another portion depends on the wholesale price of gasoline. The cap limits the total tax per gallon to 30.15 cents.

Foster acknowledges the gas tax is higher than other states, but says motorists are actually taxed less because there are fewer fees and other taxes that go to funding transportation needs.

"When you take into consideration all the revenue sources that we collect, we're actually one of the lowest," he said.

The DOT is projecting an 11 percent to 12 percent budget shortfall for the next fiscal year, and Foster says a $900 million to $1 billion shortfall is possible in the state's three-year spending plan.

The statewide 21st Century Transportation Committee – charged by the governor to reduce congestion and improve efficiency – is expected to submit its funding recommendations next month to the General Assembly.

Among the options it has before it is removing the gas tax cap, increasing vehicle registration fees and taxes associated with buying vehicles and implementing an annual fee based on the number of miles traveled.


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  • pbjbeach Nov 17, 2008

    Would some one out there please explained to me the difference between a fee increase an a tax increase the republicans would call a fee increase a tax an the dem's call a tax a fee increase what is the difference when the state taxpayers are the one that suffer regardless of what you call it be it a fee or a tax increase. a tax is a tax is a tax

  • killerkestrel Nov 10, 2008


    yes, it is dumb to put in the rasied reflective pavement markers just before winter, but they are very cheap. About $700 is what it costs to do a mile of two laned road. Snowplowable ones cost about $5,000 a mile. Also, reflective paints are already used. Those cost about $7,000 a mile, or TEN times as much. Resurfacing that secondary road costs about $120,000 a mile.

    The LED lights save piles of money. They use much less power, and last a lot longer, so you don't have to send someone out there to replace a bulb all the time. They may be replaced, but the heads are reused and reused where they can be.

    Those who doubt construction costs haven't doubled don't deal with construction costs like I do. If you only knew...

  • ridgerunner Nov 7, 2008

    Like Bev said in the ad, "I will do what has been done before". Perhaps now you see that means TAX and SPEND.

  • jse830fcnawa030klgmvnnaw+ Nov 7, 2008

    NCDOT's approach in solving their inefficiencies by increasing the gas tax is WRONG! They need to be help accountable for the misuse of the revenues from the gas tax we currently have, not increase the tax for more money to cover their mistakes.

  • nccruiter Nov 7, 2008

    NC_interest How long have you been a part of DOT? You continue to work there?

  • TheAdmiral Nov 7, 2008

    Well, lifting the cap will give them more money.

    But it will add to people not buying or going anywhere.

    South Carolina gas (far south) $1.33 a gallon.

    $1.67 a gallon here with current taxes if we were on the same playing field.

    The DOT will need to stop spending. PERIOD.

  • james27613 Nov 7, 2008

    hi Rev. RB,

    Here is how DOT can save big money:

    Stop using those glued in place reflectors.
    The first ice/snow storm we get, the plows will rip
    the reflectors from the pavement and they end up on the
    side of the road, broken and bent metal ready to tear up
    your tires.

    Up north we have reflective highway paints, looks like
    glass particles mixed into the road paints so you can
    see the roads even in heavy rains.

    This makes those expensive reflectors a bad choice.

    Few years ago when the LED traffice lamps were starting to appear, DOT got on the LED bandwagon and started replacing old bulbs with the new (expensive) LED lights.

    Problem is many of these signal lights were replaced not once, but two or three times (Glenwood Ave. Ebeneser CH. Rd) at Carmax intersection. Yes, they replaced that traffic signals over FIVE TIMES in the past ten years.

    DOT waste money and they have the good ol'boy system. I mean "Good" as in past DOT man.

  • Adelinthe Nov 7, 2008

    james27613 - "Wake County has very nice roads compared to up north (NY LI area) where I cam from 20 years ago."

    There's severe weather up north that makes it understandable up there, but not down here.

    God bless.

    Rev. RB

  • Adelinthe Nov 7, 2008

    willis2 - "If the tax goes too high, I drive less. If it gets to the point I can't afford it I will walk. How will that help the state's budget shortfall? Watch out DOT - it can happen."

    It happened a great deal when the gas prices went high.

    By and large, we showed the oil companies just how much we'll stand for, which isn't much over $3/gallon, before we start staying home.

    God bless.

    Rev. RB

  • Adelinthe Nov 7, 2008

    And stick it to the people once again.


    I heard just this evening that they're thinking about turning I-40 into a toll road as well as I-540. And they think that will help locals and tourists - how!?!

    God bless.

    Rev. RB