Legislative update: Gov. McCrory signs bill to lower gas tax

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N.C. Gov. Pat McCrory singed a bill this week that legislators say will “immediately reduce North Carolina’s gas tax as part of a finance plan that will stabilize revenue needed for the state’s transportation projects.”

House and Senate leaders announced the bipartisan plan last week. Changes to the biannual gas tax will occur on Jan. 1 and July 1 of each year under the new plan. But this year, the “fix” will be implemented April 1, according to a joint news release from N.C. House Speaker Tim Moore and Sen. Phil Berger, president of the Senate.

Legislative update: House, Senate agree to lower state’s gas tax

From April 1 through Dec. 31, 2015, the gas tax will be 36 cents. It lowers to 35 cents from Jan. 1, 2016, until June 30, 2016. From July 1, 2016, through Dec. 30, 2016, the tax will be 34 cents. On Jan. 1, 2017, a new gas tax formula will be implemented all together. Until March 31, North Carolina’s gas tax was 37.5 cents.

“This bill will allow us to build roads, strengthen bridges and fix potholes so people can get to their jobs, go to school, see their doctors and drive to the mountains or the beach,” McCrory said. “We now have a gas tax that is based on North Carolina’s transportation needs instead of the unpredictability of the world oil market.”

Previously, the state’s gas tax was based on the fluctuating international wholesale price of crude oil.

The changes are outlined in Senate Bill 20, which was sponsored by Southport Republican Bill Rabon and was recently approved in both chambers. In the House, Republican Reps. Frank Iler, of Oak Island, Rick Catlin, of Wilmington, and Ted Davis, of Wilmington, voted in favor of Senate Bill 20, while Reps. Susi Hamilton, a Wilmington Democrat, and Chris Millis, a Pender County Republican, voted against the bill.

The state’s gas tax–described by House and Senate leadership as “one of the state’s most fair but volatile revenue streams”–makes up nearly 70 percent of the funding needed to maintain roads and bridges across the state, and accounts for about 60 percent of the N.C. Department of Transportation’s budget.

The new gas tax system will require the North Carolina Department of Transportation to reduce its budget by $13.5 million, which will require the elimination of 40 positions in the division, McCrory said.

Read the full text of the bill here.

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Caroline Curran is the managing editor of Port City Daily. Reach her at (910) 772-6336 or caroline.c@portcitydaily.com. On Twitter: @cgcurran.