North Carolina Senate gives final OK to gas tax changes

Thursday, February 12, 2015
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A bill that lowers North Carolina's gasoline tax immediately but opens the door to higher tax rates later has cleared the Senate.

RALEIGH (WTVD) -- Transportation, foreclosure, and education -- what do they have in common? They're all part of a gas tax bill that made its way through the State Senate Thursday.

The bill would raise an estimated $1.2 billion for state infrastructure projects over the next four years and would cut the gas tax in the short term from 37.5 cents to 35 cents.

However, it would hold the gas tax at 35 cents in the future, which by DOT estimates would mean a five to seven cent increase in the gas tax over the same four year period.

If the legislature did nothing and gas prices stay close to current levels, the gas tax would automatically drop to around 30 cents in July, five cents lower than the short-term cut proposed by Republicans.

"Just say what it is," said Sen. Erica Smith-Ingram (D-Gaston). "Our state motto is 'To be, not to seem.' If this is a tax hike, call it what it is."

Pushing the boundaries of traditional roles, Sen. Bill Rabon (R-Southport) advocated the tax change, stressing the importance of bringing in more money for the state's transportation infrastructure.

"You can tax the middle class, I guess if you want to do that. Or you can cut teachers or you can cut other things, but you've got to find the dollars," said Rabon.

Bill sponsor Sen. Bob Rucho (R-Mecklenburg) agrees.

"This is an absolute necessity," said Rucho. "This was a critical vote to allow us to continue on the pathway of getting our roads safe, sound and financially healthy. No one has a crystal ball. How do you know what the price of gas is going to do? Will it go up? Will it go down? Nobody knows that."

Along with bringing more money for the state, the change would also stabilize the revenue stream for the Department of Transportation, which Rucho says is critical.

"Who's to say in the next three months or six months that the price of oil doesn't go to $100 a barrel and therefore 35 is going to be a low number," said Rucho.

Democrats aren't buying it.

They point out the bill would only give the DOT a fraction of the money it needs to fund existing infrastructure projects and isn't a holistic solution for the state.

"The senate proposal doesn't fix anything long term," said Rep. Kelly Alexander (D-Mecklenburg). "It's just a recognition that something needs to be done."

"This $1.2 billion tax increase won't begin the process in any reasonable way," said Sen. Dan Blue (D-Wake), "but it will sour people and make it much more difficult to talk about some real solutions to this infrastructure challenge."

"People know that they're entitled to a tax cut on gasoline come July," Blue continued. "To tell them that you're giving them a tax cut now and then start increasing the tax in July, it's not transparent, it's not honest and the people aren't going to believe more reasonable solutions."

In addition to calling the bill misleading, Blue worries about other provisions tucked into it that have nothing to do with the gas tax including changes for teachers and some homeowners.

Teachers would get a tax break on school supplies, but homeowners going through foreclosure would have to pay taxes they don't currently have to pay.

What's more, the DOT says the bill would lead to about 500 layoffs.

"They cut the jobs that DOT needs, in order to play this ruse, this sleight of hand, to make people believe that they're cutting taxes," said Blue.

Rucho says it's no mistake.

"[We've] been telling DOT it's time to downsize and they refuse to do so," said Rucho. "What we're saying is it's time for them to act like this."

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