What a ‘gas tax holiday’ would mean for you, North Carolina’s infrastructure

Right now, there is some relief at the pump as falling oil prices halt the daily surge in gas prices, according to a AAA report.
Published: Mar. 16, 2022 at 8:35 AM EDT
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WILMINGTON, N.C. (WECT) - Right now, there is some relief at the pump as falling oil prices halt the daily surge in gas prices, according to a AAA report.

“If this trend holds, it may remove some of the extreme upward price pressure consumers have found at the pump, but not all,” AAA leaders outlined in the federation’s report.

Lawmakers across the country have discussed a different kind of relief at the pump: suspending or reducing gas taxes at the state and federal level. This would alleviate some of the sticker shock at the pump.

In recent weeks, leaders in a number of states like California, Georgia, Michigan, Pennsylvania and South Carolina have called for or announced proposals for a ‘gas tax holiday.’ Six Democratic governors recently sent a joint letter to congressional leaders, urging them to suspend the federal government’s gas tax through 2022.

When you get a gallon of gas in North Carolina, you pay a state tax of 36 cents and a federal tax of around 18 cents.

According to WECT’s sister station in Charlotte, Governor Roy Cooper said he would “carefully review” the idea of suspending or reducing the state’s gas tax, but that he would want to make sure road projects continue and the savings actually goes to customers.

It’s important to note that gas tax is the the largest funding source for the North Carolina Department of Transportation, accounting for about half of its fiscal year budget. Transportation officials said that a gas tax holiday could disrupt some of the projects and maintenance work the department is working on.

“It goes to construction projects, so any kind of project: roads, bridges, safety projects, rail projects, ferry, aviation, other modes,” said Chris Peoples, NCDOT’s Deputy Chief Engineer. “It also helps to maintain and operate those assets, so, you know, pretty much motor fuels tax goes into funding the highway fund, which is the fund that we operate out of so any maintenance that we have to do across the state — so patching pot holes, mowing grass, picking up litter, any repairs to bridges or pavements you know any other kind of maintenance that we do.”

This disruption would be similar to similar to what we saw in 2020 when a lot of people were not driving or traveling because of the pandemic, which means less gas tax revenue.

“There was an impact there and so during that time, you know, we were deferring some of the maintenance operations that we were doing, some projects got delayed,” Peoples said. “A gas tax suspension or holiday could potentially do some of the same kind of things. We’d have to look at our budget across the board and see where we’d have to make cuts because it’s going to reduce the amount of revenue we have.”

WECT spoke to drivers in New Hanover County about what they thought about a gas tax holiday — everyone agreed it would be a good idea to help people and families struggling with inflation in the short term.

“A lot of people are struggling with this gas and making life decisions at the pump really,” said Ron Davis.

“I think we need the break right now. It’s becoming a little warmer — Spring time — people want to travel more so it would come in handy, be convenient,” said Darion Swain.

“I think that would be good for just a little while. It’s been so difficult for people right now to make ends meet with the soaring inflation and so at least a temporary break in the gas tax would give people a break on gas and help out even in the short term for sure,” said John Miller.

Although all the drivers WECT interviewed would like to see a gas tax holiday in the short term, most drivers understood it would be a hard line to toe given gas tax is such a large source of revenue for NCDOT.

“It’s a trade off. You know, any time you do something like this yeah you’re losing some money for road revenue, but I think it would be more helpful right now at least to have a brief holiday on gas tax and then get back to it later,” Miller said.

“Yeah that’s a tough question because I know we’re in dire need, but I think probably the gas tax suspension would be a better idea at least on a temporary basis and then we could do the infrastructure repairs at a later time,” said Bill Howard.

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