Cover Story: Pain at the pump?

By Jeff Atkinson - bio l email

CHARLOTTE, NC (WBTV) - They're bragging about lowering the state sales tax, but some say North Carolina lawmakers are quietly hitting you where it hurts.  A record setting tax hike at the pump.

The state sales tax drops by a penny at midnight Friday.  For every hundred dollars you spend, you'll save a buck.

But on the same day the state's gas tax is going higher.

Two and a half cents a gallon to a record 35 cents a gallon.

Republicans made good a promise not renew the temporary sales tax, but didn't do anything about the gas tax.

The sales tax was a promise.

The gas tax is tied to the price of gasoline - and rises and falls on its own - without the legislature doing anything about it.

In this case, lawmakers couldn't reach a consensus.  And so it's going higher - making it among the highest in the U.S.

South Carolina is already the hot spot to fill up for North Carolina drivers.  On one afternoon we saw six cars right in front of us, every single one of them says "First in Flight."

But starting Friday there will be even more reason to fly south, to go to South Carolina to fill up.

"It makes a difference? It does make a difference.. when I'm driving one of these things!" exclaimed driver Susan Forgione referring to her SUV.

North Carolina's gas tax (state and federal) now is 51-cents a gallon, which makes it the 13-th highest in the U.S.

South Carolina's gas tax (state and federal) by comparison is 35-cents a gallon.

When North Carolina's goes higher Friday (to 53.7-cents a gallon) the difference will be even greater.

"I'm not thrilled about it at all," says driver Charlie Strickland.  "It hurts people like us. We're a small business. And we have to travel for a living."

But it's the gas tax that pays for those roads you're traveling on.

North Carolina transportation budget.. 60-percent of it.. comes from the state's gas tax, relying on it to meet the state's road budget to a great percentage than many other states.

The tax is tied to the wholesale price of gas.  So when gas goes up, like it did this winter and spring, the gas tax does as well.

It resets every six months.  And the General Assembly doesn't usually weigh in.

But with Republicans in power this session they were concentrating on lowering taxes.  And there was a feeling they should do something.

But the chair of the Appropriations Transportation Committee in the House, Rep. Ric Killian says they couldn't come to a consensus.

"This is a very polarizing issue," he said.

With our road needs increasing (who hasn't complained about congestion and potholes?) state lawmakers had to walk a fine line between watching the tax go up and knowing what it costs to maintain the state's infrastructure.

"If we just do nothing it moves.. so we have to act on this. But in order to act we have to address both sides of the spectrum. And that's challenging," said Killian.

They ended up punting - for now.

So with people thinking about summer vacations, state lawmakers will be back at work in Raleigh next month.  And the gas tax may be one of the issues they'll tackle.

Rep. Killian wants to cap the gas tax at 35 cents, the new rate, meaning it can't go higher or lower even if wholesale prices do.

And he want to stop the transfer of money from the highway funds.. which the state has been doing to balance the budget.

"I think that we as a community have to do what we should do and can do in North Carolina to have the roads to be better.. I really do. At 2 and a half cents.. I'm not sure that that's that bad," said driver Audrey Brown.

This issue gave lawmakers a lot of heartburn.  Do you let the tax go up knowing there could be push-back from voters or do you look at the road needs and bring in more money?

For every two cents the tax goes up the state takes in another $100 million a year for roads.

Why is the gas tax tied to the wholesale price?  It fluctuates to reflect the cost to build and maintain roads.  Asphalt, etc. goes higher when fuel goes higher.

What may help you feel better state officials say the 2 ½ cent increase in the gas tax will cost the average driver an additional $19 a year.

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