Republican budget writers in the state House want to make additional changes to the state’s gas tax – two months after lawmakers approved a plan that dropped the tax rate while stopping an existing law that would have cut the rate more sharply.
The new gas tax proposal appears in a budget document sent to House Finance Committee members Sunday night. That committee will debate the plan – along with dozens of other proposed tax and fee changes – when it meets Monday afternoon. The full House budget bill will be released sometime Monday, legislators said.
The budget’s other financial provisions would restore a tax deduction for senior citizens’ medical expenses – a perk that was eliminated under GOP tax changes, prompting outcry from seniors who paid more this year.
The House proposal would also extend tax credits for solar energy projects for two years, although other renewable energy projects would enjoy four more years of tax credits. Gov. Pat McCrory had called for ending the solar credit in his budget proposal, arguing that the solar industry in North Carolina had “matured” and no longer needed a tax break to be viable.
Sign Up and Save
Get six months of free digital access to The News & Observer
Also in line for tax credits under the House plan: Historic preservation projects, technology data centers and motorsports. All of those are programs McCrory wants to extend.
But the proposed gas tax change could draw the most debate as the House discusses the budget this week.
Under a plan approved by the House and Senate in late March, the gas tax dropped from 37.5 cents per gallon to 36 cents on April 1. It’s due to fall again to 35 cents next January, and 34 cents in July 2016. A new calculation formula is set to take effect in 2017, and it’s based on the state’s population growth and the national price index for energy costs.
The House budget would instead leave the tax on diesel fuel at 36 cents in January, but buyers of other motor fuels would get a break: The rate would drop to 33 cents per gallon and stay there until 2017, when the new calculation formula would go into effect.
Also affecting driver’s wallets: The budget proposal calls for hiking dozens of DMV fees, including fees for vehicle registrations and driver’s licenses.