About That Gas Tax Proposal…

Americans For Prosperity (AFP) is circulating a petition to halt a bill that includes a temporary cut to the state’s gas tax rate and that also sets a new minimum rate level to stabilize the revenue stream, which the DOT depends on.

The AFP petition doesn’t that the current floor minimum is 37.5 cents:

If it’s not bad enough that Congress is considering a federal gas tax hike, our very own state general assembly is trying to pull a fast one with Senate Bill 20.

While it temporarily lowers the gas tax, SB 20 sets a new floor on the tax at 35 cents and thereby keeps the gas tax artificially inflated over time. At 35 cents the tax is 6 to 8 cents higher than it would be under current law.

Enough is enough. Families are struggling and temporarily lower gas prices are no excuse for our legislators to play fast and loose with our gas tax. Tell your legislators to vote no on SB 20 and any legislation hiking our gas taxes.

Could this lead to higher gas taxes down the line? Sure.  I tend to agree with some of Becki Gray’s list of alternatives to messing with the gas tax.
UPDATE: Haymaker weighs in – #ncga: Things looking rather dicey in House for NC Chamber’s gas tax hike  Civitas: Bad Bill of the Week – Billion Dollar Gas Tax Hike

Let’s take a look at the math and what’s going on nationally.

For drivers, the falling gas prices are a welcome change, but for state departments of transportation they present a budget problem.  One might think a gas tax hike is on the way, as may the case nationally or in South Carolina, but in neighboring North Carolina, the opposite is happening.

A proposal to lower the state’s gas tax by 2.5 cents was introduced in the North Carolina General Assembly and passed the Senate. See SB 20.

The gas tax cut would put in place a new minimum rate and would be effective on March 1. This would take the current of 37.5 cents per gallon down to 35 cents.

The main purpose for the change appears to be an attempt to steady the revenue stream the tax provides and which is critical to the state’s Department of Transportation budget.

“There’s an immediate tax cut” in the new proposal, said Sen. Kathy Harrington, a Gaston County Republican who co-chairs one of the Senate’s budget-writing committees. “And it freezes it by putting a floor in place — and provides stability going forward, (to guarantee funds) for road projects that are already in the queue.” – The State.com

The current law governing gas taxes has a mechanism that allows for adjustment according to market pricing every six months.  The formula currently in place starts at 17.5 cents and then adds which ever is greater of 3.5 cents or 7 percent of the average national wholesale price.

The new proposal would change the existing formula to make a new minimum rate of 35 cents. To meet that minimum, whichever amount is greater would be used; an additional 17.5 cents or 9.9 percent of the average wholesale fuel price. Remember the current minimum is 37.5 cents.

About A.P. Dillon

A.P. Dillon is a reporter currently writing at The North State Journal. She resides in the Triangle area of North Carolina. Find her on Twitter: @APDillon_ Tips: APDillon@Protonmail.com
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