Under the Dome

Gas tax, jobs incentives bills clear NC House

The state Senate will take up two controversial measures next week on the gas tax and Gov. Pat McCrory’s jobs incentives plan, following final votes in the House Thursday.

Both bills had initial approval on Wednesday, but they were on the agenda again Thursday for more debate and a final vote. The vote tallies were largely the same, as more speeches didn’t change the bitter divide that’s split political parties on both proposals.

The gas tax bill passed 72-42 on Thursday, with 14 Democrats joining a majority of Republicans to support it. Thirteen Republicans broke with party leadership and voted no.

The bill would drop the state gas tax to 36 cents a gallon starting April 1 and continuing through December. The new rate would be a 1.5-cent tax cut initially, since the current tax is 37.5 cents. But critics point out that the bill would prevent motorists from enjoying a much bigger tax cut for the last six months of the year, and they call the change a tax hike.

In a statement issued after the vote, House Speaker Tim Moore said the tax change will provide funding for transportation needs.

“The House took action to stabilize our state’s infrastructure funding, and ensure we can continue to invest in our roads and bridges,” Moore said. “I’m thankful for the thoughtful debate among colleagues – this issue deserves careful scrutiny. However, we understand that keeping our roads safe is the right thing to do.”

The Senate has already passed the gas tax bill, but they’ll have to vote on it again because the House increased the proposed new tax rate from 35 to 36 cents. If the Senate doesn’t agree to the House’s change, the bill will go to a conference committee to hash out a compromise.

The incentives bill, which contains McCrory’s N.C. Competes plan, will make its first appearance in the Senate next week. The bill doubles the cap to $45 million for the Job Development Investment Grant, which is largely out of money to lure major employers to the state.

The legislation cleared the House within a week, but look for slower progress in the Senate: the finance committee chairman, Sen. Bob Rucho, has scheduled expert presentations on incentives issues next week.

Rucho’s committee heard a report Wednesday from the UNC Center for Competitive Economies, which said incentives “can be used to help determine your economic destiny.”

Several Republican senators have said they’ll likely modify the House incentives plan. They say incentives should not be used when companies are bringing existing employees from other states, and they’re concerned the grants go disproportionately to urban counties.

Some House Republicans had similar gripes, but Thursday’s vote tally was 88-29, with 10 Democrats and 19 Republicans voting no. Supporters have argued the measure will help land an auto manufacturing plant and other major employers.

“North Carolina has always been an attractive place to do business, but it’s vital that we keep our state competitive in a fierce global market,” said bill sponsor Rep. Susan Martin, a Wilson Republican, in a statement after the vote.

“We need these tools so that we make it into the competition and can demonstrate that North Carolina is open and ready for business.”

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