RALEIGH, N.C. -- A North Carolina senator has drafted a bill to repeal the state's latest gasoline tax increase, said the Associated Press. The added three-cent tax took effect January 1.
State Senator Phil Berger (R) said most of the gasoline tax increases have paid for road repairs. But more than a billion dollars have been transferred from the highway fund to the general fund in the past four years. He said that is a waste of money.
North Carolina's gasoline tax is adjusted twice a yearon January 1 and July 1, added a report [image-nocss] by the Wilson (N.C.) Daily Times.
The adjustment is based on the wholesale price of gasoline during a preceding six-month period, said the report. For the January 1 change, it is based on the average wholesale price of gasoline between March 31 and September 30.
North Carolina's gasoline tax has increased 5.3 cents in 2005, taking it to a total of 29.9 cents per gallon. Combined with a federal gasoline tax of 18.4 cents a gallon, North Carolinians will now pay 48.3 cents a gallon in taxes, making the state's gasoline tax the sixth highest in the nation, the report said.
Some Republican legislators have called for a special session to rescind the January 1 tax increase or to temporarily suspend the state gasoline tax.
David E. Parsons, president and CEO of AAA Carolinas, said bearing the additional cost of the tax would be more acceptable if people could be assured that their gasoline taxes are going to be exclusively used to repair, maintain and build new roads and bridges.
He told the newspaper that 75% of the gasoline tax goes to the Highway Fund, designated for repair of existing roads; the other 25% goes to the Highway Trust Fund, which is dedicated to building new roads. Each penny in gasoline tax yields about $53 million a year in revenue. However, he said money has been siphoned from the gasoline tax into the general fund, and that's one reason the N.C. Department of Transportation suffers an annual $313 million shortfall in road and bridge maintenance.
Meanwhile, a scheduled 1.2-cent increase in Pennsylvania's gasoline tax went into effect New Year's Day, as well, said the Scranton (Pa.)Times-Tribune.
Pete Osmolia, co-owner of Osmolia's Gulf in Moosic, told the newspaper that with combined state and federal taxes nearing 50 cents, the additional penny per gallon will not cause that much pain. Over time it will add up, but by itself, it won't hurt consumers, he said.
The penny tax jump could easily go unnoticed, the report said. With gasoline at about $2.29 per gallon, the 1-cent jump amounts to less than one half of 1% of the total price. Routine fluctuations of gasoline prices are often several cents. Osmolia took delivery of gasoline last Friday that added 3 cents to his pump price, to $2.31.
The state tax, currently 31.1 cents, is already among the highest in the nation, the report added. It is made up of two taxes and one feethe liquid fuels and the oil company franchise taxes and the underground storage tank (UST) fee.
When gasoline prices spiked in September, legislators considered temporarily withdrawing the tax or a portion of it to ease pain at the pump as gasoline prices topped $3 per gallon, said the report. But rolling back the tax would deprive the state of revenue needed for road improvements, it said.
The tax raises more than $2 billion a year, according to the paper, citing the state budget. The money goes to the state and local municipalities and counties to build and fix roads and bridges and pay street-light utility costs and for state police patrols.
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