Update on NC Gas Tax
The NC Gas Tax is going up again in January (see the Times News article to the right). The Times is correct. Something is not right. Revenue Secretary David Hoyle is a Democrat in a stolidly Democrat administration. The current Gas Tax structure was created by Democrat legislatures who love higher taxes. Whet else should we expect? It is unfortunate indeed that the new NC Legislature did not "get around" to fixing this in their 2011 session. But it is true that they couldn't do everything we wanted in one session. Nevertheless, the Times News editorial is correct. Something isn't right here. Things aren't adding up. Seems to me that Governor Perdue's administration is following the Obama Administration's lead: Go around the Legislature and use gimmicky "calculations" to raise taxes by "executive order". It is imperative that the NC Legislature fix this problem in 2012. North Carolina cannot remain competitive with the highest gasoline taxes in the nation. The economy is going to plunge further into depression, perhaps even crashing catastrophically worldwide. Exorbitantly high fuel taxes are not going to help North Carolina's economy or citizenry to survive. |
Just why is the state adding to gasoline tax?North Carolina Revenue Secretary David Hoyle announced in a brief statement this week that the state’s tax on gasoline will rise by 3.9 cents a gallon on Jan. 1. That hike, on top of a 2.5-cent per gallon increase last summer, will bring North Carolina’s motor fuels tax to 38.9 cents per gallon. That will be one of the highest, if not the highest, gasoline taxes in the country. Bah, humbug! That certainly doesn’t qualify as spreading Christmas cheer. It’s definitely not the kind of news we’d like to hear. What we would like to hear is more detail about why the tax is going up nearly 4 cents to the highest gas tax rate in the state’s history and how this particular rate hike is being computed. North Carolina’s gas tax is adjusted twice a year (July 1 and Jan. 1) using a formula based on the wholesale price of gasoline. It’s pretty much a given that if the retail price of gasoline is spiking — as it did near $4 a gallon last spring — then you’re going to see a jump in the gasoline tax come July 1. But what’s the explanation this time? The retail price of regular gasoline now is just above $3 a gallon around here. So why aren’t we talking instead about a coming decline in the state’s gasoline tax? |
The numbers just don’t add up. And neither does the rational for having a gasoline tax that’s based on the wholesale price. The explanation is that many highway construction and maintenance products are made with petroleum, so the tax should rise to cover higher materials costs when the wholesale gasoline price rises. We’d call that a tenuous connection at best. Gasoline and the vast types of materials used for road work are different products manufactured and refined in different ways under different sets of production circumstances. Their costs should be accounted for differently. Additionally, the reasoning for transfers of huge amounts of money from highway trust funds for such purposes as to operate the N.C. Highway Patrol falls short. Hundreds of millions in funds dedicated to transportation issues have been spent on non-highway purposes in recent years. Obviously, such transfers must be stopped totally and the Legislature, while studying the idea of capping the gas tax, should examine changing how the gasoline tax rate is determined. And the N.C. Department of Revenue and Secretary Hoyle should better explain why Tarheel motorists are facing a 3.9-cent gasoline tax hike come Jan. 1. Lots of things aren’t adding up. |
NC Gas TaxYou've probably heard a lot about the recent and coming hikes in the NC Gas Tax. There have been many stories in the news lately. The video to the right is one example of the media's treatment. Another is this news story: NC Gas Tax Increase Means More Pain at the Pump
NC and implemented the increases. But a lot of folks want to blame the Republicans for not doing something about the NC Gas Tax at the same time they eliminated the hated temporary sales taxes in the 2011 NC Budget.
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Well, this was a busy ― truly hectic ― session in 2011, the first Republican-controlled legislature since the violent coup d'etat of 1898. There was much to be done after more than a century of Democrat progressive rule, and the gas tax simply escaped the top priority list of this year's session of the state legislature.
NC does have the highest gasoline taxes in the Southeast, so perhaps next year our new Republican Legislature can do something about it. |
NC Motor Fuels Tax Summary
The following information was compiled for our benefit by the NC Fiscal Research Division on June 27, 2011 (edited by Rep. Killian June 30, 2011)
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