Gas Tax and Politics

In the General Assembly, there’re a lot of confusing charges being hurled back and forth about the ‘Gas Tax.’ Let’s try to sort it out.

Let’s start with two facts everyone seems to agree on: First, both Democrats and Republicans agree there are roads we need to build and roads and bridges we need to repair. Second, both sides agree we don’t have the money needed to pay the bills.

The seven-mile, congested bottleneck on Highway 16 between Newton and Lincoln County (in my district) is an example – that bottleneck won’t go away until we can widen the highway. But that costs $148 million.

Right now, under our current system the gas tax is 37.5 cents per gallon. Since the tax goes up and down based on the cost of a gallon of gas, it is projected to drop to around 30 cents in July.

The Senate has just proposed an alternative: It proposes to drop the tax 2.5 cents per gallon now then ‘freeze’ the tax. In other words, the gas tax won’t drop below 35 cents per gallon.

Most of the hollering going on in Raleigh revolves around a single question: Is that a tax cut or tax increase?

It’s true that under the current system the tax would have dropped 7.5 cents, so if you look at just that piece the drop to 2.5 cents is a tax increase.

It’s equally true that the tax is now 37.5 cents and it’s going down 2.5 cents – and while that may not be a 7.5 cents cut, it’s still a cut.

This may be one of those times when the answer is in the eye of the beholder.

But here’s the bottom line: Both sides agree we need more roads and even the Democrats – who are calling this is a Republican tax increase – aren’t saying we should go ahead and cut the gas tax to 30 cents per gallon.

After I was elected to the General Assembly, I started commuting back and forth from Hickory to Raleigh and it didn’t take long to figure driving a gas burning SUV was going to get expensive. So, I decided to drive a car that ran on diesel and cut my fuel cost – and the gas taxes I pay – by nearly half.
It turns out a lot of other NC drivers were making a similar choice. They were switching to automobiles that used less gasoline. That change, combined with the drop in the cost of gas, led to an unexpected development: Gas tax revenues – which we use to build highways – plummeted. Our old way of paying for our highways was no longer working. It had been outdated by a new reality.

Of course, gas taxes are about as popular as a toothache. But there’s no getting around the fact we have a problem. Or the fact we can’t get along without highways.

People can argue over whether a 2.5 cents cut (rather than a 7.5 cents cut) is a tax increase. But the real question remains: Do we need to build more roads – or not? Both the Republicans and the Democrats, including the Democratic leaders in the General Assembly, all agree the answer is we do.

2 Responses

  1. Ellen Douglas says:

    So what are you proposing we do, then? I am having trouble seeing where you are going with this.

  2. charles preston says:

    Does the Highway Trust fund still exist and if so where is the money going. General Fund? OR where?
    What is the break down on how many trucks are doing what you have done to cut gas consumption? Has that source of revenue changed as has the the use of cars that consume less gas and pay less gas tax?
    Thanks for what you are doing on this issue.
    There are those in the house who of our party who see this as a tax increase-Is this a house-senate battle ground ?

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