An aide to Pres. Pro Temp Berger indicated today that the Senate Republican Caucus would likely be looking at capping the gas tax this session.
The gas tax is tied to the average wholesale price of gas, which means as gas prices climb the tax does as well. Each penny of gas generates about $50 million for road maintenance and construction as well as other transportation spending.
Four years ago as gas prices climbed the General Assembly capped the tax for two years at 29.9 cents a gallon which decreased the State transportation maintenance and construction budget by $524 million over a four year period. Subsequently, the General Assembly changed the law to create a floor for the tax at 29.9 cents a gallon.
Governor Perdue’s proposed 2011 budget and the NCDOT 10 year work plan both assume the gas tax continues only with a floor and not with a cap. Capping the gas tax at the current rate will cost about $1 billion in transportation revenues from the 10 year work plan. Stated another way, a loss of $800 million from maintenance, $200 million from construction, and $30 million from Powell Bill and secondary road funds. These reductions will be in all 100 counties across the State. Click here (letter size) (legal size) to see one scenario of how those cuts could be allocated across each of the counties.
The Metro Mayors will be discussing the issue at our meeting next week, but in the meantime, please be considering the effect capping the gas tax will have on the state roads in your cities, on our state highways, and on the construction projects planned for your community.
As always, call me with any questions at all.
Julie White
