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Published: Jan 22, 2006 12:00 AM
Modified: Jan 22, 2006 02:53 AM

Gas tax up, state still short

In 1921, North Carolina caused many jaws to drop when it passed a $50 million road bond issue at a time when Congress was spending only $92 million annually to build a national highway system.

North Carolina must be "crazy" to undertake such a large debt, U.S. Sen. Carter Glass of Virginia remarked to a friend and Tar Heel native, Edwin Alderman.

"Maybe, as you say, North Carolina is going to the poor house," observed Alderman, who was then president of the University of Virginia. "But it is riding there cheerfully and gaily on the best roads in the South."

From Model Ts to SUVs, North Carolina's road system has always been huge and expensive -- in part a reflection of Tar Heel preferences for living in the country and working in town. In the 1920s, Australia and Japan sent delegations to study North Carolina's highway system. So did Italian dictator Benito Mussolini.

Today, North Carolina has the second-largest state-maintained road system in the country, trailing only Texas.

That is a major reason why North Carolina's gas tax is the seventh-highest in the country.

The gas tax became political fodder this month when an increase of 2.8 cents per gallon -- triggered automatically by a formula based on wholesale gas prices -- hit the pumps. With gas prices already spiking, the increase rubbed like a pebble in a shoe.

It has been the subject of radio talk show hosts and denounced by lawmakers and potential gubernatorial candidates. It has generated so much heat that a legislative committee was created to examine the issue.

High-octane political battles at the pump are nothing new.

Four-term Democratic Gov. Jim Hunt suffered major political damage when he pushed through a 3-cent gas-tax increase in 1981. The National Congressional Club, the political organization of then-U.S. Sen. Jesse Helms, ran a hard-hitting television campaign criticizing Hunt for raising taxes.

So when Gov. Jim Martin, a two-term Republican, proposed a 2.75-cent increase in 1986, he first went to Helms to make sure he wouldn't sic his political organization on him.

"I told him I realized there were political liabilities associated with proposing a tax increase, particularly for a Republican," Martin said at the time. "His answer was very important to me. He said, 'Yes, there are political liabilities involved in raising taxes even when you have to do it.' But he said, 'There is a bigger liability for you as governor if you don't provide the leadership that is expected of you.' "

As part of a compromise, the Democratic-controlled legislature passed a gas tax -- 2 cents on gas at the pump and 3 percent on wholesale motor fuel prices -- that for the first time indexed the motor fuels tax to gas prices. That law, passed 20 years ago, led to the increase this month.

But even with the variable gas tax rate, North Carolina has not laid asphalt fast enough.

Today it is estimated that North Carolina will be $11 billion short for roads during the next decade. That may be something to think about the next time you are sitting in a traffic jam listening to a talk show host complain that a gas tax increase is not needed.

Rob Christensen can be reached at 829-4532 or robc@newsobserver.com.

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