5/9/06-Gov. Mike Easley said he will ask state lawmakers to cap the state’s per-gallon tax on diesel and gasoline so that the rate will not increase from the current level. House Democrats soon are expected to unveil their own idea.
The state’s fuel tax can change every six months because a portion is set on recent average wholesale prices. The tax increased 2.8 cents per gallon in January to 29.9 cents, which ranks among the highest in the nation.
The tax could change slightly in July, but is likely to increase to 31.1 cents by January 2007 after a season of near-record pump prices, The Charlotte Observer reported.
“Nobody ever anticipated that Washington would let (fuel) prices get this high,” Easley said in a written statement. “I believe it is appropriate to put a freeze in place. Even if (fuel) prices continue to rise, the state tax will not.”
Easley’s backing of a cap on the tax is in contrast to his thoughts at the end of 2005. At the time, he said tinkering with the tax, which raises $1.4 billion annually, would further delay transportation projects.
To help ensure that road and bridge work continues, Easley said that his budget would make available an additional $200 million for construction and $18 million for repairs. That amount now goes for the state general fund.
The proposed tax cap also is included in his budget. It would remain in place at least through mid-2007, costing the state $135 million in lost transportation dollars, the Winston-Salem Journal reported.
In addition to the governor’s proposal, Democrats in the state’s House are expected to introduce their own legislation that would keep the fuel tax from increasing this year.
Republican legislators who called on Easley to freeze the tax last fall said it should have been done much sooner. They also want to find other ways to provide transportation funding.

1/5/06-With drivers in North Carolina paying nearly 3 cents more at the pump in state fuel taxes since the first of the year, a state lawmaker is calling for help to consumers.
Senate Minority Leader Phil Berger, R-Eden, wants to repeal the increase and prevent future boosts to the state’s 29.9-cent-per-gallon tax on gasoline and diesel.
North Carolina’s fuel tax is a variable tax that is adjusted twice annually based on a six-month average of the wholesale price. The tax, previously 27.1 cents per gallon, now is the highest in the Southeast.
Berger, and most of his Republican counterparts in the state, urged Gov. Mike Easley to call lawmakers back into session to debate the increase. The Democratic governor has refused, saying the state would stand to lose about $150 million in funding for road projects.
Berger isn’t going away though. He’s working on a bill to cap the state’s fuel tax, or at least roll back the recent 2.8-cent increase.
The tax funds roads, bridges and other projects. However, in the past four years, more than a billion dollars has been rerouted from the Highway Trust Fund to the state’s general fund, WFMY TV in Greensboro reported. This fiscal year alone, the General Assembly moved $252 million from transportation to the general fund.
Berger’s effort is expected to be debated in the legislative session that begins in May.