Capping the gas tax

Date posted: August 15, 2013

The N.C. General Assembly has put a cap of 37.5 cents on the state gas tax for about two years. N.C. State University economist Mike Walden considers the pluses and minuses of such a restriction.

“I think clearly, first of all, this is a reaction to people being upset with gas prices. Gas prices certainly are higher than they used to be a decade ago, and we do have a very high gas tax in our state.

“Now, I would say in defense of that, it’s because of the way we fund roads. North Carolina predominately funds roads with the gas tax. Other states fund it with a combination of a gas tax as well as property taxes. So, I think you can understand why our tax is high.

“But the General Assembly has decided to put a cap on that. And so I think in general, drivers will applaud that. The question, of course, is where are we going to get the money to repair roads (and) to perhaps build new roads. There’s been talk that there’s a big link between economic development and road accessibility.  And so if the gas tax cannot go up – and what that means it can’t rise with the rising expenses of building roads, particularly when asphalt prices go up – where are we going to get the money?

“So I think probably what we’re going to see down the road is … more toll roads, maybe even a consideration of funding roads with general tax revenues. Maybe even money out of the general fund from income taxes or general sales taxes. because clearly we need good roads. … Good roads mean we don’t have as many repair bills on our vehicles, and we need roads to promote economic development.”

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