Lawmakers debate gas tax cap

May 30, 2012 3:25:08 PM PDT
With North Carolina's gasoline tax currently sitting at one of the highest in the country, some at the General Assembly are talking about capping it.

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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