by Sarah Curry
Director of Fiscal Policy Studies
When we discuss taxes at the state level, there are always the usual suspects that support increasing them. So legislators know, if certain groups support the legislation, it usually sides with either the Right or the Left. In the case of the gas tax – both the N.C. League of Municipalities and the NC Chamber are supporting the bill. Not a hard sell since the bill is expected to actually result in a tax increase of $1.2 billion over the next five years. That’s right – a tax increase. So while it seems to be a tax cut in the first year because the tax will go from 37.5 cents per gallon to 35 cents per gallon, over time it will actually increase the cost to the consumer. This bill has been turning heads since it was introduced yesterday, and I suspect we can see a great deal more discussion before it’s all over with.
Here are the quotes that were highlighted in a press release by the NC Senate Republicans today:
“[The Senate proposal] takes an important first step to maintain the current funds available to meet existing transportation infrastructure needs.” – North Carolina Chamber
“This proposal ensures a nice balance, with a tax break for all North Carolina drivers while still protecting the safety of our bridges and roadways.” – AAA Carolinas
“This is the right step to take while also offering a tax break for the traveling public.” – Professional Engineers of N.C.
“These measures…will provide much needed stability to transportation revenue in the state while delivering a boost for consumers and the North Carolina economy.” – N.C. League of Municipalities
“The proposed Senate plan should be viewed as a win-win for the citizens of North Carolina. Not only will we see cut in the gas tax, but by freezing the tax, we’ll gain a measure of revenue stability.” – N.C. Go!
And here is what the bill is expected to do to Transportation Funds, aka….the tax increases from the bill. Read the entire fiscal note here.