Lawmakers debate gas tax cap

The tax is 38.9 cents a gallon. That includes a 17.5 cent "flat tax" plus a variable tax adjusted every six months that's equal to seven percent of the average wholesale price of gasoline.

Earlier this month, the NC Budget and Tax Center - a non-partisan project of the North Carolina Justice Center - issued a report that argues against a cap.

Click here to read the report

The report says North Carolina collects about $50 million for every penny of the tax, yet the state's transportation budget already faces a funding gap. It also says even with the tax, North Carolina's gas prices are on par with most other states.

"Maintaining a gas tax that generates revenue is critical for building and maintaining a reliable transportation system that is efficient and safe for motorists," argued the Justice Center in a news release.

It says the reason the tax is linked to the cost of gas is the cost of road building and repair material - particularly asphalt - is linked to the price of oil.

Analysts say capping the tax - as a bill the moved forward in the General Assembly Wednesday would do - would cost the state about $80 million that goes to transportation for roads, rail, and fixing potholes.

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