North Carolina bill would authorize temporary fuel tax increase

| 6/4/2009

Tabbed as a necessary evil by backers to fund road work, a bill was approved by a North Carolina House panel. The bill would ensure that the state’s fuel tax rate won’t go down next month as expected.

The House Finance Committee voted Wednesday, June 3, to advance to the full House a bill that would make the current fuel tax limit of 29.9 cents per gallon the minimum rate for the next two years. If approved on the House floor the bill – SB200 – would advance to Gov. Beverly Perdue’s desk. Senate lawmakers already approved it on a 28-19 vote.

Without the change, the tax is expected to drop to 28 cents July 1.

The tax is composed of a 17.5-cent flat rate and a 12.4-cent wholesale component. It is adjusted twice annually based on wholesale prices.

If approved, the tax is expected to increase one-half cent to 30.4 cents in January. According to a legislative fiscal note, the change would generate $67.5 million for roads and bridges through mid-2011.

Acknowledging that consumers are tired of paying what they consider a lot for fuel, supporters say the revenue is needed because the North Carolina Department of Transportation has about a $300 million budget gap each year for the next several years. Declining fuel sales and the tax rate are partly to blame, they say.

To view other legislative activities of interest for North Carolina in 2009, click here.

– By Keith Goble, state legislative editor

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