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Proposed Tax Cut Could Eliminate 500 NC Jobs And Actually Increase Taxes

Gasoline prices at the Carrboro Food Mart gas station in April 2013
Laura Candler

Lawmakers at the General Assembly have re-written a bill that would mean short-term savings on gas but could eventually lead to higher taxes and the elimination of 500 jobs.

During a meeting of the Senate Finance Committee Tuesday, Republicans said this would cut the gas tax and stabilize an uncertain gas tax revenue stream situation.

"And we need to stabilize the volatility of the gas tax," said bill sponsor Bill Rabon. "That guarantees us adequate funds to maintain our roads, improve our roads and meet our transportation needs."

Under this proposal, the tax-per-gallon would drop from 37.5 to 35 cents, beginning March 1st.

The legislation would keep the gas tax at a minimum of 35 cents per gallon moving forward.

However, based on a state formula, that 35 cents is higher than the projection of 30.4 cents tax per gallon that is expected this summer.

In other words, it's a short-term cut and a long-term increase, based on tax projections. While lawmakers didn't call it an increase, the measure received support from both sides of the aisle.

"It is an increase long term," said Democratic Senator Floyd McKissick. "In terms of providing funding, we have incredible transportation needs that need to me met and satisfied."

Department of Transportation job cuts

McKissick did voice concerns about 500 Department of Transportation jobs that would be cut as part of the bill. Republican Senator Bill Rabon called the proposal an extremely important, time-sensitive measure. He said DOT has already been told to trim those positions.

"And so a good percentage of those jobs will just be those jobs that we have already told them to outsource and they've been dragging their feet a little to do," Rabon said.

Under this measure the gas tax rate would be determined once a year instead of every six months as is the case now. Last week Governor McCrory proposed a $1.2 billion bond transportation initiative, during his State of the State address.

Jeff Tiberii is the co-host of WUNC's "Due South." Jeff joined WUNC in 2011. During his 20 years in public radio, he was Morning Edition Host at WFDD and WUNC’s Greensboro Bureau Chief and later, the Capitol Bureau Chief. Jeff has covered state and federal politics, produced the radio documentary “Right Turn,” launched a podcast, and was named North Carolina Radio Reporter of the Year four times.
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