Gas tax hike debated
Published 12:00 am Tuesday, January 3, 2006
If you noted a hike on Sunday at the gas pump, don’t blame the local petroleum dealers.
Effective Jan. 1, the North Carolina tax on a gallon of gas increased 2.8 cents. That adjustment brings the state tax to 29.9 cents per gallon, the highest in the southeastern United States.
Coupled with the federal gas tax (18.4 cents), those purchasing a gallon of gas in North Carolina will fork over a total of 48.3 cents in taxes, the sixth highest in the nation.
By comparison, the local tax in two neighboring states is considerably lower. Virginia charges 17.5 cents per gallon while South Carolina’s rate stands at 16 cents.
Neither figures its gas tax as uniquely as North Carolina. Here in the Tar Heel state, the gas tax is divided into two parts n a flat 17.5 cents per gallon plus another seven percent of the wholesale price. However, that wholesale rate is not based on the current price, but rather figured by an index formula of the price at the pump over the past six months.
That previous six months included prices as high as $3.50 per gallon on the heels of Hurricane Katrina. Here in the Roanoke-Chowan area, the price fell as low as $2.07 in early December, but had risen to $2.19 per gallon prior to Sunday’s tax hike.
The latest hike is expected to generate an estimated $70 million in additional revenue for the state’s Highway Trust Fund, money earmarked for road improvements. However, some entities, including AAA of the Carolinas and the National Federation of Independent Business, say North Carolina Gov. Mike Easley has robbed that fund to help balance the state’s general fund.
“North Carolina, once known as the ‘Good Roads State’, instead has used the gasoline tax as a partial funding mechanism for the general fund,” David Parsons, President and CEO of the AAA of the Carolinas said. “For at least the past five years, a portion of the gasoline tax receipts has gone to the general fund for non-highway purposes.”
Parsons said in a state where one out of every five miles of paved road is rated substandard by federal quality measurements, North Carolina motorists have the right to question where their gas tax money is going.
“North Carolina is more than $1 billion behind in maintenance and repair needs,” Parsons claimed. “That shortfall grows by $300 million a year.”
In a survey conducted by the National Federation of Independent Business, 86.9 percent of the business owners said Gov. Easley should follow other governors’ leads and temporarily suspend the state’s gas tax.
“State government can’t do something about the price of crude oil, but it can do something about the gas tax in North Carolina,&uot; said Gregg Thompson, state director for the federation. &uot;We heard from one trucking company that they bought 4,000 gallons of diesel fuel a week. When you buy that much fuel, 27.1 cents a gallon (the old rate prior to Sunday’s hike) makes an impact.&uot;
According to state media publications, North Carolina legislative leaders agreed last week to form a committee to study rising energy prices. That comes on the heels of several appeals by North Carolina Republican legislators to Gov. Easley to freeze the old rate of 27.1 cents per gallon.