By LARRY GOODE
North Carolina is in the midst of a transportation crisis that has been years in the making. Now some policymakers on Jones Street suggest decreases to the state’s gas tax. This may be a tempting proposal, but it is neither a new idea nor a good one.
The state gas tax is divided into two portions — a flat rate of 17.5 cents per gallon and a 7 percent charge that "floats" based on the average wholesale price of motor fuel over the past six months. Currently that part of the rate is 9.6 cents per gallon, but will be re-evaluated on Jan. 1. There is little doubt that with rising fuel costs, that rate will increase.
A current legislative proposal supports a cap on the floating portion of the tax at the December 2004 level of 7.1 cents per gallon. This is based on the false premise that a relatively small reduction will be a significant benefit to the public. The truth is, any current savings would be paid back many times over in coming years. (more…)
Raleigh, NC
