House Committee Gets Review Of Road-Funding Plan | Eastern North Carolina Now

    Publisher's note: The author of this post is Barry Smith, who is an associate editor for the Carolina Journal, John Hood Publisher.

Gas taxes would drop but vehicle fees would rise under "good roads" proposal

    RALEIGH     Gasoline taxes would drop while vehicle use taxes and auto registration fees would rise under a broad House plan aimed at boosting the budget for highway maintenance, bridge repair, and port maintenance.

    The bill sponsor, Rep. John Torbett, R-Gaston, reviewed House Bill 927 on Tuesday to the House Transportation Committee.

    "The roads seem to be just not being repaired and kept in the same state that they used to be just a couple decades ago," Torbett told the committee about his "Reestablish N.C. as the 'Good Roads' State" measure. His plan would boost spending for transportation projects by about $500 million a year from the 2016-17 to 2019-20 fiscal years.

    Key revenue provisions of the plan include:

• Reducing the gasoline tax from 35 cents per gallon to 30 cents per gallon. After Jan. 1, 2017, the tax would be adjusted based on population growth and inflation.
• Increasing the highway use tax — the sales tax paid when purchasing a car or registering it in the state for the first time — from 3 percent to 4 percent. The cap on the highway use tax also would be increased from the current $1,000 to $2,000.
• Increasing fees for driver's licenses by 50 percent. Driver's license fees would go up from $4 per year to $6 per year (or for an eight-year driver's license, from $32 to $48). Similar increases would apply to driver's license restoration fees and duplicate license fees.
• Increasing annual registration fees, or license tag fees, by 50 percent. Fees for most private passenger vehicles would increase from $28 to $42.
• Increasing title fees by 50 percent. Certificate of title fees would increase from the current $40 to $60. Duplicate or corrected title fees, as well as transfer of registration and duplicate registration card fees, would increase from the current $15 to $22.50.

    The bill also puts triggers in place for further increasing the gasoline tax and highway use tax if federal transportation dollars coming to North Carolina fell substantially.

    Torbett said a 6.5-percent gross premiums tax on auto insurance contracts that was part of the legislation when it was introduced would be dropped from the bill.

    Insurance Commissioner Wayne Goodwin objected to that tax. "It would amount to the highest across-the-board increase on car insurance in our state in 30 years," Goodwin told the committee. He said that if implemented, that tax "would definitely be passed on to drivers."

    Goodwin said he was "very pleased" that the provision would be removed.

    Torbett's bill also incorporates provisions from another bill, sponsored by Rep. Dana Bumgardner, R-Gaston, phasing out over four years a $196.6 million annual transfer to the General Fund to pay for the Highway Patrol.

    The bill also would appropriate $300 million in the 2015-16 fiscal year for other transportation projects.

    Sixty percent of that money — or $180 million — would pay for road resurfacing or repainting projects. Funds would be distributed evenly among the state's 100 counties.

    Twenty percent — or $60 million — would go to ports in Wilmington and Morehead City. That money could be used to modernize the ports, for road and railroad construction to the ports, and for maintenance and dredging of inlets and navigation channels.

    Ten percent — or $30 million — would go to cities to resurface streets. This funding would supplement Powell Bill money cities and towns normally receive.

    The remaining 10 percent would be used to repair and replace structurally deficient bridges.

    Total spending would increase to $530 million in subsequent years, with a higher percentage of the funds devoted to road resurfacing projects in 2016-17 and a higher percentage devoted to ports in the subsequent two years.

    The proposal got mostly positive views.

    "Transportation is not free," said Rep. Nelson Dollar, R-Wake, senior chairman of the House Appropriations Committee. "It has to be paid for in some shape, form, or fashion."

    "We are between a rock and a hard place," said Rep. Michael Speciale, R-Craven. "We seem to forget that once you build them you've got to maintain them."

    John Policastro, a lobbyist for the N.C. Automobile Dealers Association, suggested that lawmakers should focus more on usage than ownership when looking at fees.

    "We'd encourage the General Assembly to look more also at options that focus on usage," Policastro said. "Basically, right now, this bill almost entirely focuses on anyone who buys or owns an automobile and doesn't really address the usage of the automobile."

    Torbett said he is working with lawmakers to revise the bill, and said an updated version could be ready for the Transportation Committee as early as next week.