Updated Friday 7:10 am
The North Carolina House has agreed to restrain an impending cut in the state's gasoline tax to keep money flowing to road and bridge projects.
House lawmakers on Thursday approved letting the gas tax fall from the current 37.5 cents per gallon rate to 36 cents for the rest of 2015. Doing nothing would have meant the tax pegged to wholesale gas prices would likely drop below 30 cents per gallon, according to legislative analysts.
Some Democrats branded the legislation a tax increase.
The measure now returns to the state Senate, which voted last month to cut the tax to 35 cents through the end of 2015 and make that the floor under a reworked formula. The Senate can go along with the House's changes or start negotiating final language.
Meanwhile, the road construction proposal offered by North Carolina Gov. Pat McCrory is based on the gasoline tax falling by an amount less than projected using the current formula.
McCrory unveiled in his state budget Thursday how he'd spend money from the Highway Fund and Highway Trust Fund, which get more than half of their proceeds from the gas tax.
The plans are based on the tax falling from 37.5 cents per gallon to 35 cents. That's in line with a bill the Senate passed last month. The current law, however, would likely bring the rate below 30 cents July 1.
Some lawmakers have called that difference a tax increase. State Budget Director Lee Roberts disagrees, saying decreasing the rate less than what would otherwise occur is not a tax hike.
Updated Thursday 7:23 am
A majority in the House have agreed to set North Carolina's state gasoline tax at 36 cents a gallon for the rest of 2015 while legislative leaders seek a long-term solution to transportation funding problems.
The legislation receiving tentative House approval Wednesday lowers the current tax by 1.5 cents but prevents it from falling under 30 cents this summer under current law. Bill supporters say the state can't afford such a decline for road-building and maintenance.
Rep. Bill Brawley, a Republican from Matthews, says the temporary decline hopefully will put heat on lawmakers to locate new transportation revenues. Several Democrats complained the measure was a tax increase.
The Senate's version of the bill reduced the current rate to 35 cents.
Wednesday's vote was 70-47. A final House vote is Thursday.
Original Post:
North Carolina House Republicans are making their own changes to the state gasoline tax that would cause an immediate price drop at the pump. But the decrease is not as deep as the Senate proposed last month.
The House Finance Committee voted Tuesday for legislation to reduce the tax by 1.5 cents per gallon to 36 cents starting April 1 through the end of the year.
The state would then keep using the current formula — based in part on wholesale prices — to recalculate the tax annually.
The Senate proposal would cause a 2.5-cent reduction and change the formula.
Democrats reminded their colleagues Tuesday that the tax would actually fall much further this summer if lawmakers did nothing. It's now forecast to fall to 30 cents.
