Lawmakers Look to Stop Gas Tax
December 22,2005
By Barry Smith - Freedom Raleigh Bureau

RALEIGH - Some Republican lawmakers are calling on Gov. Mike Easley to keep the scheduled 2.8-cent-per-gallon increase in the gasoline tax from taking effect on Jan. 1.

But Easley, a Democrat, isn't planning on calling for such a session.

The increase, which is an automatic component built into the state's gas tax, is based on a six-month average wholesale price. It will raise the total state gasoline tax from 27.1-cents-per-gallon to 29.9-cents-per-gallon, the highest in the Southeast.

The increase for a 15-gallon fill-up would cost a motorist 42 cents. Filling that tank once a week for a year would cost an additional $21.84.

Senate Minority Leader Phil Berger, R-Rockingham, called on the governor to convene the General Assembly into special session to consider reducing the gas tax.

Noting that Republicans had earlier called for such tax-reduction legislation, Berger said, "The governor continues to ignore the fact that higher fuel costs are hurting families and small businesses in North Carolina. â?¦ Allowing an automatic tax increase to go into effect at a time when higher heating costs will be squeezing consumers shows a tremendous lack off concern."

"The governor will not throw the state's budget out of balance by $135 million, violating the state constitution and delaying highway projects," said Jill Lucus, Easley's deputy press secretary.

Dan Gerlach, Easley's top budget advisor, said that people are buying less gas now, which results in fewer dollars coming in for road projects.

"The increase that comes up Jan. 1 would balance it out," he said.

Lucas said that capping the gasoline tax would save the average consumer only $15 per year.

While Republicans point to North Carolina's gas tax being higher than others in the Southeast, state Sen. David Hoyle, D-Gaston, said that the whole story about highway funding needs to be told. He said that in other states, many roads are paid for with local property taxes instead of a state sales tax.

"Highway-use taxes ought to pay for roads," Hoyle said.

He said that while North Carolina maintains 78,641 miles of roadway, Florida maintains 12,052 miles. Other highways in the state are maintained locally, he said.

Hoyle said that Georgia maintains 17,872 miles, Tennessee 13,793 miles, South Carolina 41,475 miles and Virginia 57,323 miles.

Rep. Cary Allred, R-Alamance, said he thinks North Carolina's tax ought to be more in line with neighboring states.

"I don't know why we should allow our state to benefit from the largess of the oil companies," he said.

He questioned some of the highway projects conducted by the N.C. Department of Transportation.

"They need to spend the money more wisely," he said.

Rep. Alice Underhill, D-Craven, said she is concerned that North Carolina motorists might have to pay the added gasoline tax, but she is also concerned about the condition of many of the roads.

"I hear from them (her constituents) that they want the roads improved," Underhill said.

"Certain roads are great," she said. "But if you go down to Pamlico County, to some of those roads that have been waiting for a while, they're bad."

Rep. Debbie Clary, R-Cleveland, agreed with Berger's plea for a special session on the gas tax. She cited figures showing that, after the first five months of the 2005-06 fiscal year, the state is $95 million ahead of projections.

"There is absolutely no reason fiscally to say that the money is not there to do it," Clary said. "We should do it."

Clary acknowledged that the figures are for the state's general fund and not the Highway Fund and Highway Trust Fund, which pay for state highway projects and maintenance. But she pointed out that the General Assembly annually transfers money from the Highway Trust Fund - this year it's $252.6 million - to the general fund.

"When you've restored the integrity to the Highway Trust Fund by spending it just on highways, then we'll talk about separating the funds," Clary said. "Right now, in reality, that's not what's happening."

Rep. Stephen LaRoque, R-Lenoir, called the upcoming increase a burden on small businesses and citizens.

"With the price of gas what it is, anything the state can do to help the people, we ought to do it," he said.

Rep. William Wainwright, D-Craven, said that if Easley called for a special gas-tax session, he would be willing to participate in it, noting that he is a part of the motoring public that will have to pay the extra tax if it takes effect.

He said he isn't sure if he'd support eliminating the scheduled increase.

"I don't want to prematurely make up my mind," he said. "You really want to weigh the pros and cons on this particular issue to see what is in the best interest of the state."

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Barry Smith can be reached at bsmith@link.freedom.com.