NC House bill would slash gax tax and raise other taxes and fees

The state gas tax would be chopped down to 30 cents a gallon, but other taxes and fees would rise sharply, under sweeping legislation filed Thursday to change how the state collects money for transportation – and how it spends it.

The state Department of Transportation would be pressed to respond quickly whenever North Carolina residents report malfunctioning traffic signals, missing signs or other road hazards. The deadline for fixing a reported pothole would be two days.

Rep. John Torbett, a Republican from Gaston County who chairs a committee that oversees transportation spending, filed a 20-page bill that would upend – and go far beyond – gas tax changes adopted in March. It would:

▪  Cut the gas tax from 36 cents a gallon to 30 cents starting July 1 until January 2017. (The legislature voted in March to drop the tax in several steps to 34 cents during that period.) Starting in 2017, the tax would be expected to rise slowly according to a new formula that tracks state population growth and national energy inflation rates.

▪  Increase the state’s highway use tax on car sales, now 3 percent, to 4 percent in January 2016.

▪  Increase the tax on car rentals, from 8 percent to 9 percent on short-term rentals and from 3 percent to 4 percent on long-term rentals.

▪  Increase Division of Motor Vehicles fees for a long list of licenses, permits, titles and registrations. The annual car registration fee would rise from $28 to $42.

▪  Increase fees for trucks and fees charged by weight for property-hauling vehicles.

▪  Introduce a new 6.5 percent tax collected on automobile insurance premiums

▪  Make additional increases in gas and highway use taxes that would be triggered if federal transportation funds to North Carolina are sharply reduced.

Torbett also has proposals for how DOT would spend the additional money, directing specific sums to be used for contract resurfacing, state port modernization, city streets, bridge repairs and other needs.

It’s not clear how much money DOT would lose from the gas tax cut – each penny of the tax is worth about $50 million in revenues – and how much money it would gain from the other increases. Torbett was not available for comment, but in a recent interview he said he would propose changes that would increase DOT funding by about $1 billion a year.

This story was originally published April 16, 2015 at 5:41 PM with the headline "NC House bill would slash gax tax and raise other taxes and fees."