Ordinarily, the prospects of a gas-tax hike would result in a conservative jihad.
Anti-tax activist Grover Norquist would be on the first plane out of Reagan National. Americans for Prosperity, the Civitas Institute, Carolina Rising and other groups would be holding rallies on the state government mall, and orchestrating bus trips around the state. Robo calls would be pouring into lawmaker’s districts, conservative talk radio would be filled with outrage and radio ads would be airing. Tea party backers would be dusting off their tri-corner hats.
But this time, not so much.
Just as it took an anti-communist like GOP President Richard Nixon to open relations with China, perhaps it takes a conservative Republican legislature to raise the gas tax.
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There has been some conservative opposition. Americans for Prosperity has put out a couple of statements, calling the bill a tax hike disguised as “a Trojan Horse.” Civitas called it “the bad bill of the week.” But opposition has been muted.
There are several reasons for that. For one thing, the GOP legislative leadership has become increasingly politically deft. The gas-tax hike is a neat piece of political jiu-jitsu – a tax hike that doesn’t require lawmakers to vote directly for a gas-tax increase.
The state gas tax is recalculated twice annually based on the average wholesale price of a gallon of gas, rising and falling along with gas prices.
The measure that has passed the Senate changes the way the tax rate is calculated. The change would result in a 2.5-cent reduction in the tax rate on March 1, from 37.5 cents to 35 cents. But the bill would set a new 35-cent floor for the tax, even though it is projected to fall to about 30 cents in July. The bill would also increase the wholesale multiplier that is a big part of the gas-tax formula. The Office of State Management and Budget says the changes will bring in an additional $250 million per year.
This is a tax increase by any other name, but it is a backdoor tax increase. It gives lawmakers plausible deniability, so they can go back home to tea party groups and say with a straight face that they did not vote for a gas-tax increase and be technically accurate.
A climate for hikes
With Congress seemingly unable to provide more federal highway funds for the nation’s declining infrastructure, at least a dozen states are considering gas-tax increases this year, according to Daniel Vock of Governing Magazine. Vock notes that the timing is good: gas is cheap, interest rates are low, and re-election campaigns are far off.
The North Carolina conservative groups are also loath to criticize their legislative allies. For conservatives, this is the legislature of their dreams – having pushed through record tax cuts, opposed Medicaid expansion, passed new abortion clinic restrictions, opened up the state for more energy exploration and reduced unemployment benefits, among other things.
They are not about to go to the mat over a back-door gas-tax increase.
The conservatives probably are not crazy about some of the suggested alternatives to a gas-tax hike such as toll roads, special taxes on heavy trucks or raising the sales tax on cars. (There are a lot of Republican auto dealers and trucking company executives out there.)
The conservatives – once the outsiders – are the new political establishment in Raleigh. And criticizing lawmakers might also hurt their ability to land plum political or lobbying jobs.
In the past, Democratic proposals for a gas-tax hike have created a hue and cry. When Democratic Gov. Jim Hunt proposed a gas-tax hike in 1981, the political organization of U.S. Sen. Jesse Helms launched a political campaign to block the measure in the legislature, spending more than $200,000 ($520,000 in today’s dollars) in ads.
North Carolina has the highest gas tax in the South and one of the highest in the country. It is about to go higher if this legislation passes. But with Republicans in control, the conservative, self-styled taxpayer watch dog groups seem to have lost much of their bite.