- Associated Press - Tuesday, March 3, 2015

RALEIGH, N.C. (AP) - Motorists would see a small price drop at the pump in the House version of gas tax legislation pushed through two committees Tuesday by Republicans. The decrease isn’t as deep as Senate counterparts want, but both reductions eliminate an even greater cut expected this summer if lawmakers did nothing.

The House finance and budget-writing committees voted separately to reduce the tax by 1.5 cents per gallon - from 37.5 cents to 36 cents - starting April 1 through the end of the year. The state would then keep using the current formula, based in part on wholesale prices, to recalculate the tax annually. Currently it’s changed twice a year.

The Senate proposal approved three weeks ago would cause a 2.5-cent reduction and change the formula so that the tax could never fall below 35 cents.

Unless a bill becomes law, lower wholesale prices will mean the tax would actually fall much further starting July 1, likely to just under 30 cents per gallon, according to a legislative staff analyst. That would mean the loss of more than $236 million during the next fiscal year, growing to $352 million by 2019.

Like Senate Republicans, House Republicans consider the small decrease as a way to stabilize revenue while lawmakers figure out how to narrow the long-term gap between transportation revenues and statewide needs. One 2012 study calculated the cumulative shortfall through 2040 as high as $94 billion.

“We are not raising the tax, but we are not allowing it to decrease as much as it would have absent this bill,” said Rep. Bill Brawley, R-Mecklenburg, adding earlier that the freeze will “allow this body time to come up and fully debate a more fully comprehensive fix to the problem of transportation funding.”

Democrats on the finance panel pointed out that average drivers would nonetheless experience a higher tax. North Carolina’s motor fuels tax is among the highest in the nation and doubles or nearly doubles the rates in surrounding states, according to a bill analysis.

“Those consumers will pay six cents more per gallon for gasoline then they would otherwise without this bill,” Rep. Paul Luebke, D-Durham, told Brawley. “There’s a six-cent tax increase for the consumer at the pump.”

As a way to encourage votes of support, Brawley used figures provided by the state Department of Transportation and N.C. League of Municipalities to highlight how much road construction and maintenance money earmarked for cities and counties could lose if the gas tax fell by more than 7 cents in July.

The House measure still would mean the loss of nearly $13.5 million for road construction and maintenance through June 30. It directs reductions across dozens of DOT line items and the elimination of at least 40 vacant positions. An amendment deleted the directed elimination of 500 filled positions by September, but the Senate version still mandates it. GOP Gov. Pat McCrory, who would be asked to sign any bill into law, has raised questions about the personnel cuts.

The bill was expected to reach the House floor Wednesday for debate and the first of two required votes.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide