With fuel prices on the rise, GOP lawmakers are considering capping the state’s tax on gasoline again. Two years ago, lawmakers eliminated the cap and set a minimum tax of 29.9 cents per gallon. The gas tax, which is tied to the wholesale price of fuel, is set every six months and is now at 32.5 cents per gallon. The rate is expected to increase by 2 to 2.5 cents in July. The price of gas has been climbing steadily in recent weeks and is at a two-year high, averaging $3.51 a gallon nationwide. North Carolina’s gas tax is the highest in the Southeast, and lawmakers said it might be time to rein it in to help both consumers and retailers statewide. “I think we need to fix the gas tax because people are crossing the border to Virginia and South Carolina (to fill up),” said Sen. Neal Hunt, R-Wake.
The gas tax is the largest revenue source for the state Department of Transportation, and officials said the agency would lose $1 billion over the next decade if the tax is capped. “It is a lot of money, particularly when you look at all the needs we have in this state, to take care of our aging infrastructure and to take care of the congestion problems we have in the state,” said Mark Foster, chief financial officer for the DOT. Seventy-five percent of the gas tax funds road maintenance projects, and the DOT estimates that 18,335 miles of pavement statewide wouldn’t be resurfaced if the gas tax is capped at its current level. Hunt said DOT can simply shift money slated for new projects to maintenance. “Stop projects that aren’t needed. Put the money back in maintenance programs,” he said. Foster and other DOT officials argue that there is little correlation between the gas tax and the actual cost at the pump. Whether a station in Raleigh charges $3.47 or $3.59 a gallon, the tax is the same, they said.(Bruce Mildwurf, WRAL NEWS, 3/08/11).
