North Carolina Senate gas tax cut bill could lead to even higher rates down the road
RALEIGH (WTVD) -- Five months before the state's gas tax was scheduled to be readjusted, Republican lawmakers are offering what they're promoting as a gas tax cut. Democrats seemed to agree with Republicans on the policy aspect. But, calling it a tax cut, had many critics crying foul.
At 37.5 cent per gallon, North Carolina's gas tax is one of the highest in the nation. Unlike other neighboring states, which count on other sources, the gas tax is North Carolina's primary source of revenue for the Department of Transportation.
The tax is tied to the wholesale cost of fuel. So, the nation's fluctuating and currently low gas prices make for a not so reliable stream of money to maintain roads and bridges.
Republicans raised eyebrows Tuesday when the pitched a fix-it plan. Their plan doesn't raise the gas tax, they say it cuts it.
"It immediately gives us an immediate tax cut," said Sen. Bill Rabon, Co-chairman of the Senate Finance Committee.
Rabon's bill would cut the current gas tax 2.5 cents, down to 35 cents on March 1. That means 35 cents would be the new minimum.
"It will afford stability and lack of volatility," Rabon added.
Critics quickly balked accusing Republicans of trying to trick taxpayers into thinking it's a good deal over time. In a news release, conservative tax-reform advocacy group, Americans for Prosperity called the move a "bait and switch."
"That's one of the main things [Republicans] want to do to help sell [the gas tax changes] to constituents who think Republicans should be cutting taxes. They can say look we're cutting taxes," said Mitch Kokai with the conservative John Locke Foundation.
Data from the legislature's independent staff of researchers that uses long term predictions of gas prices suggest the GOP plan would result in a higher gas tax over time, not less: 40.5 cent gas tax in 2018 versus a 34.2 cent tax under the existing plan.
"We need predictability. We need stability to meet our transportation needs, but we need to call it what it is -- a fuel tax increase," said Sen. Floyd McKissick, a Durham Democrat.
Rabon responded to the cries of a bait and switch.
"Well as we know and everyone knows, as time goes on things become more expensive," said Rabon. "We can address things at that time, just as we're addressing what we did at this time."
The gas tax proposal spent the day working its way through committee. The measure could get a vote on the Senate floor as early as Wednesday.
