Senate's action on gas tax a step in right direction
Published February 12, 2015
Opinion Article by Marc Finlayson
We commend the NC Senate for its passage of Senate Bill 20 to address the anticipated drop in transportation revenue this summer. This proposed legislation will lower the state’s current motor fuels tax (gas tax) to 35 cents and will preserve $175-275 million in vital transportation funding. And, by placing a floor on the tax, they provide much-needed stability to revenue facing uncertainty due to increasing vehicle fuel efficiency.
Under the current law, the gas tax is adjusted semiannually and is the combination of 17.5 cents plus either 7 percent of the average wholesale price or 3.5 cents – whichever is greater. Due to lower-than-normal gas prices in the second half of 2014, it’s projected that, under the current model, the tax would drop by 6-8 cents, resulting in a $300-$400 million drop in revenue.
Senate Bill 20 should be viewed as a win-win for the citizens of North Carolina. Not only will we see a 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. Because as each year vehicles become more fuel efficient, that means every new model goes a little farther on the same gallon of gas. We consume and use more roads and bridges, yet pay the same to maintain or improve them.
This paradox of fuel efficiency will result in a funding crisis in our state over time, as we continue to depend on a revenue source – the gas tax – that will yield less every year. NCDOT projects that between now and 2040, our state needs an estimated $114 billion to ensure our transportation system is safe, reduces traffic congestion, and creates economic opportunities rather than gridlock and bottlenecks. Over that same time, our state only anticipates $54 billion in revenue – a $60 billion shortfall.
There is a common misconception that, because gas is cheaper when we cross our state’s border, North Carolinians pay an exorbitant amount of taxes for transportation. In truth, when all the fees and taxes other states utilize (property taxes, local fees, tolls, etc.) are factored, North Carolinians actually pay about $510/year per capita – compared to the U.S. average of $657.
In order to avoid unsafe roads and bridges and a reputation as a state that businesses avoid due to congestion, now is the time to act. 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.
Now is the time to grow North Carolina’s economic base, create jobs and invest in the network that moves drivers, goods and services in our state and to points beyond.
Marc Finlayson is the Chair of NC Go!, and is Executive Director of NC Highway 17 Association
February 12, 2015 at 7:25 pm
Norm Kelly says:
We also need to seriously look at using road/bridge funds efficiently. One perfect example is hiway 12 at the beach every time it rains. Or rains a little hard. Continuing to fix this stretch of road is foolish - an alternative must be found in order to use funds more efficiently.
Also, I don't use Progressive as my auto insurance for 2 reasons. First, because of the name, which is also their philosophy. Second, because they want me to put a tracker in my car to get the best rate. I can choose not to provide so much information to an insurance company. I can't choose if the government starts forcing my car to have one of those trackers in it. It would be extremely complicated for the state to charge by the miles driven, instead of or in addition to the gas tax, unless they put a tracker in my vehicle(s). One thing I know we don't need, and we must fight against, is government having any way to track our driving. This is big brother on steroids! Where I drive, when I drive, is my information, unless I've killed someone. If the government wants to charge me by the mile, they MUST find a way to do it without putting a tracker in my vehicle(s).
However, the current system of not taxing electric vehicles, either fully or partially electric, is wrong also. There must be a way for these vehicles to pay for the transportation facilities they use. Raising the gas tax on me won't do anything about these 'free loaders'. (only because they are able to bypass the tax yet get the benefits!) Also, when it comes to electric vehicles, we need to stop paying people to buy these vehicles. If they want to buy an electric vehicle, then do it, but without MY money. I'm spending MY money to buy my vehicle. You need to start buying your vehicle using YOUR money! Why is my back pocket always being raided to pay for someone elses stuff?!??! Isn't my back pocket supposed to pay for MY stuff? I'm not looking to take money out of your back pocket to pay for my stuff so I demand that you stop stealing from my back pocket for YOUR stuff! This is worse than kids continuing to live with mommy & daddy until they are 35! My kids are independent of my back pocket, so why aren't YOU!?
