Bullying the gas tax
Gov. Mike Easley has taken to the bully pulpit and used it simultaneously pick on Republicans in Washington and try and re-claim an issue state legislative Republicans had hoped to ride this legislative session.
That's right folks, he's calling for freezing the gas tax. While the legislature doesn't always give Easley what he wants, the governor has certainly raised the issue's profile a bit.
Update:Sen. Phil Berger just called me back and points out that he and other Republicans called for freezing or lowering the gas tax last fall and the Easley pushed back, saying the money was needed for highway construction projects.
“I think the governor is taking a step in the right direction,” Berger said. “I wish he had joined with us eight months ago when we were calling for it to be frozen.”
Berger said the state should not only freeze the tax, but reduce it by the 2.9-cents it rose on Jan. 1.
And, he said, the next step on the gas tax would be to stop transfers of money from the highway trust fund, which is stocked by the gas tax, to the general fund. Although authorized by the original law that created the trust funds, the transfers have gotten out of hand over the years Berger said.
“The $200 million he’s talking about transferring back (ed note: see release below) I would view as a down payment on repaying the hundreds of millions of dollars that have been transferred from the fund at the governor’s request.”
Now, here's the release that started all this conversation from the governor’s office:
RALEIGH – Gov. Mike Easley today announced that he will call on the General Assembly to freeze the state gasoline tax so that the rate will not increase from the current level. In addition, he repeated his call to President Bush and Congress to act to ease the financial burden of soaring fuel prices on consumers. This freeze will be in addition to broad-based tax relief and $10 million in heating and cooling assistance for the needy to be included in the Governor’s budget, which will be released next week.
Since 1992, North Carolina law automatically raises the gas tax when there is a substantial increase in the cost of fuel. With Easley’s proposed freeze, the rate could decrease but it will not go above current levels.“Nobody ever anticipated that Washington would let gas prices get this high,” said Easley. “I believe that it is appropriate to put a freeze in place. Even if gas prices continue to rise, the state tax will not.”
The gas tax is a major source of money to build and maintain the state’s roads. To ensure that road projects proceed, Easley will provide an additional $200.7 million to the Highway Trust Fund for road construction and $18 million to the Highway Fund for maintenance and contract resurfacing.
“The increased cost of fuel has placed an undue burden on all Americans,” Easley said. “We have done our part at the state level to address energy challenges. Now Washington must do its part. Big gas companies are overflowing with cash that they are siphoning out of our citizens’ pockets”
Six months ago, Easley called on President Bush to launch a formal investigation into the record-high profits recorded by gas companies during the previous year. The Bush administration, until just recently, was silent.
“As these oil companies, once again, announced record profits, the White House hinted it might look into the matter,” Easley said. “Today, I repeat my call for federal action and urge the President to stop waiting and start helping.”
“We are taking a double hit here,” Easley said. “Not only are the skyrocketing fuel prices costing consumers at the pump and as they heat and cool their homes, they are also driving up the costs to operate state government and build roads.”
The cost of highway construction and maintenance has nearly doubled over the past two years. Asphalt is a petroleum-based product, and its price increases as the price of oil increases. Today it costs an average of $4.4 million to pave a mile of four-lane interstate highway compared with $3.4 million two years ago.
The current state gas tax is 29.9 cents a gallon. There is no state sales tax on gasoline in North Carolina, while other states impose both a gas and sales tax on consumers.
North Carolina has the nation’s second largest system of state-maintained highways, nearly 80,000 miles. By comparison, Virginia’s road system is 57,500 miles, South Carolina’s 47,500, Georgia’s 18,000 and Tennessee’s 13,800.
Due to recent automated spamming attacks on our blogs, we are temporarily requiring commenters to authenticate themselves via TypeKey® before posting comments to any News & Record blog in order to prevent denials of service. We sincerely apologize for the inconvenience.