Gas-tax caps, cost increases featured in bill

Rising gas prices and gas tax rates face scrutiny from the N.C. General Assembly this week as legislators gear up to discuss measures related to the problems.

Sen. Dan Clodfelter, D-Mecklenburg, proposed a bill Monday that would increase gas tax rates and operating fees for underground petroleum tanks.

The state gas tax, which is adjusted every six months to take into account the wholesale price of gas, comprises the flat excise tax and a component that adjusts for the varying prices of wholesale gasoline.

The bill would increase the excise tax from 17.5 cents to 18.5 cents.

It would also place a cap on the variable wholesale component of the tax at 9.1 cents a gallon. The current law specifies that it must amount to 3.5 cents or 7 percent of the average wholesale price, whichever is greater.

The revenue from 1 cent of the excise tax would go toward the cleanup of areas contaminated by petroleum.

Seventy-five percent of the rest of the excise tax would go to the Highway Fund, and the other 25 percent would go to the Highway Trust Fund.

The gas tax increased 2 cents in January to 26.6 cents per gallon. A Jan. 24 press release from AAA Carolinas stated that the increase would bring $105 million to the state between the date of publication and June 30 .

The bill’s proposed increase in the excise tax is expected to bring in more money.

Rep. Harold Brubaker, R-Randolph, and Rep. Jim Harrell, D-Surry, sponsored a bill that would prohibit companies from selling motor fuel for less than the production cost.

While critics say the proposal would act as an anti-dumping law, Harrell said the bill would try to ensure that competition is even between companies.

“Our big concern is big businesses coming in and taking small business out,” he said.

“It’s designed to go after places like Wal-Mart, who sell gas cheaply or at a loss to bring people in for other things,” said Tom Crosby, vice president of communication for AAA Carolinas.

Harrell said the concern is that big business will drop their prices to drive out competition and raise prices afterward. But Crosby said the representatives’ bill would not alleviate that concern.

“It limits competition,” he said. “It doesn’t make any sense. … Whatever happened to free market? Whatever happened to capitalism? AAA does not like that. It’s not consumer-friendly.”

Crosby said he would not want the bill on his voting record if he were a legislator.

Harrell said the bill was introduced to spark discussion about the problems with big business and to try to decrease gas prices.

He said he does not think the bill will move quickly through the House, and he anticipates that it might undergo changes.

It’s still early, he said, and he wants to discuss the problem and see what solutions are presented.

“I might not support this bill at the end (of the discussion).”

 

Contact the State & National Editor at stntdesk@unc.edu.