Road Worrier Blog

Wide support with some criticism for GOP plan to cut NC gas tax, then raise it

Business and political groups are weighing in on a push by Senate Republicans to cut North Carolina’s gas tax by 2.5 cents in March, establish 35 cents as a tax floor in future years, and change the tax formula to accelerate the increase in the tax rate expected when fuel prices rise in the future – pushing it as much as 7 cents higher than it would be otherwise.

It’s an immediate tax cut that will reduce state Department of Transportation funds by $33 million this spring, forcing DOT to lay off 500 employees. Economists say that over the next four years, however, it will generate an additional $1.2 billion for DOT by pushing the tax rate 5 to 7 cents higher than it would be under the current law.

Here are excerpts from comments on the legislation, with links to their complete statements, from:

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N.C. Go

: Not only will we see cut in the gas tax, but by freezing the tax, we’ll gain a measure of revenue stability. And while we commend the fast action by the legislature, their work is only partly done this session regarding transportation revenue. ... Now is the time for bold ideas to shore up the ailing gas tax. Plans already exist identifying alternative and new funding sources that, by 2040, could yield more than $125 billion in new revenue – more than enough to fill the budget gap.

Full statement (pdf)

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Americans for Prosperity

: AFP’s concern is that this proposal functions as a tax increase over time. Our preference would be to make a clean cut on the gas tax, and not play political games to make taxpayers believe they are getting a good deal over time.

Full statement

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N.C. Budget and Tax Center

: Reforming the gas tax in a way to help generate sufficient revenue to address growing demand and the current backlog of stressed roads, bridges, and railroads is a step in the right direction and important in light of the 2012 and 2006 decisions to arbitrarily cap the gas tax at a level too low to support infrastructure investment needed. Improvements, however, are needed before the Senate bill moves forward to ensure this proposal best supports the state’s transportation infrastructure.

Full statement

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Professional Engineers of North Carolina

: “We cannot afford to risk the safety of our citizens by allowing the motor fuels tax rate to fall to a level that jeopardizes our ability to maintain and repair our bridges and roads,” said Neil Deans, PE, President of Professional Engineers of NC. The Professional Engineers of NC believe this to be an important first step that stabilizes funding for our transportation system. However, it does not relieve us of the obligation to advance long-term funding reforms to meet the future needs of a growing state.

Full statement

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The N.C. League of Municipalities

: These measures, working in concert, will provide much needed stability to transportation revenue in the state while delivering a boost for consumers and the North Carolina economy.

Full statement

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The N.C. Chamber

: While supporting the Senate proposal, we remain committed to advancing long-term reforms that establish North Carolina’s transportation infrastructure as a competitive advantage in the battle for job creation. Investing in the transportation system is crucial and yields a significant return on investment as it provides a resource for years to come.

Full statement

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AAA Carolinas

: Road and bridge safety can sometimes get lost in politics. This proposal ensures a nice balance, with a tax break for all North Carolina drivers while still protecting the safety of our bridges and roadways.

News story interview

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