NewsBreak! Articles > May 16, 2012

LEGISLATIVE UPDATE

North Carolina

Gas Tax Cap Update: In an unusual agreement between the two often feuding sides, Democratic Gov. Bev Perdue and Republican legislators have agreed to cap the gas tax. While Carolinas AGC would prefer no reduction or cap, the agreement is that the gas tax would be capped for one year at the rate of 37.5 cents with the understanding that the NC General Assembly will look at the entire transportation funding package next year as part of the review of the entire tax structure.

Last week, House Republicans said last week they want to cap the state gas tax. Perdue said she wants to do the same. The tax rate is expected to fall July 1 from 38.9 cents to about 37.7 cents, because part of the tax is tied to wholesale fuel prices and fluctuates as they do.

And now that it's falling anyway, Perdue and the House Republicans say they want to prevent it from rising. Perdue says that the cap of 37.5 cents would save motorists $63 million in gas taxes, a tiny piece of the $1.88 billion the state expects to take in. Last fall, the House and Senate could not agree on whether to cap the gas tax, but Senate leader Phil Berger said he wants to freeze the tax during the short session that begins May 16.

CAGC has been closely involved in this issue, including discussions with legislative leadership, the Governor's office and NC Department of Transportation, with the belief that capping at that level for a year will not dramatically impact DOT's program delivery.

Other Budget Differences: The gas tax may be one of the few points of agreement in what are expected to be drastically different ideas on what the state should pay for next year. Perdue's budget, which she released Thursday, has raises for all state employees, a sales tax increase, and $785 million more for education.

House budget writers are set to release their proposal this week. It will not include the 3/4-cent sales tax hike fueling much of the increase in Perdue's proposed $20.9 billion plan.
The tax increase would raise about $760 million over 11 months, or $850 million a year. She proposes to keep the sales tax increase for two years. Perdue's proposal is about $1.2 billion more than the current budget. Legislative Republicans have been clear they will not go for a tax increase.

Meanwhile, House Republicans want to eliminate about 100 DOT staff positions - most of them vacant - while Perdue proposes to hire 99 new workers. Most of these new employees would go to the Division of Motor Vehicles to implement a new statewide system linking car registrations with county property taxes, to start in July 2013.

Romney Rallies in NC: Republican Mitt Romney last Friday blamed "the same old liberal policies of the past" for what he called the weakest economic recovery since the Great Depression. "We've got a government that's gotten in the way of the American people," the presumptive GOP nominee told about 650 people at Charlotte Pipe and Foundry. "We're going to change that."

Romney's second visit to the city in a month took place just blocks from where President Barack Obama will accept the Democratic nomination in September. The visit came the same week his campaign began ramping up operations in what's expected to be a key battleground state, one Obama carried by just 14,000 votes in 2008. Obama's performance, Romney said, has fallen short. "(Obama) said he would measure progress on whether we're creating new jobs or not," Romney said. "(Yet) we've had a record number of foreclosures. I see families really struggling."

Romney promised to cut federal spending and turn over to the states programs such as Medicaid and housing vouchers. He also pledged to tap U.S. energy reserves more aggressively than Obama. "It shouldn't be a surprise that Governor Romney's speech in Charlotte lacked focus and a real substance since he has little commitment to his positions - especially when it comes to speaking to middle-class solutions," said state Democratic spokesman Walton Robinson, according to The Charlotte Observer.