#ncga: Some common sense on the gas tax, NC Competes

millisHouse speaker Tim Moore and the rest of the GOP leadership in Raleigh are crowing about how much better off we’ll be now that they’ve approved an increase in the gas tax and the disbursement of even more corporate welfare.  Well, state Rep. Chris Millis (R-Pender) — part of the dwindling Common Sense caucus on Jones Street — paints a distinctly different picture in his most recent constituent newsletter:

[…] To set the stage of what was discussed this week, please note that Senate Bill 20 was proposed by the Senate a few weeks back in effort to prevent the gas tax from falling from 37.5 cents today to nearly 30.0 cents on July 1st: by placing a “floor” of 35.0 cents on the gas tax (with no cap for future increases that could occur in the future). What the House proposed this week, as an alternative to the Senate proposal, would freeze the gas tax at a rate of 36.0 cents (giving it both a floor to prevent a drop and a ceiling to prevent a rise) to a date certain that would then cause the gas tax to revert back to the old method if the legislature would fail to enact more “comprehensive” gas tax reforms. If you are confused by my very best effort to set the stage regarding what was before the House this week then you can see what has led to my increasing amount of grey hair.

While I most certainly like the House revision of freezing the gas tax instead of having a floor with no cap, my main issue with the House revision to Senate Bill 20 was the rate at which the gas tax would be frozen. It is true that going from 37.5 cents per gallon of gas tax today to 36.0 cents per gallon tomorrow would be a slight cut in the immediate tax burden, but this chosen level would also most certainly be above the estimated 30.0 cents per gallon come July 1st of this year.

This race to stop the gas tax from falling by the General Assembly (House and Senate) is focused solely in preventing a reduction of transportation related infrastructure monies estimated at around $300 million. (As an aside, I highly question the revenue estimate after a series of questions I posed in committee that reveal that the proponents of this bill are examining the potential reduction in revenues from a drop in the gas tax by only considering one side of the coin: a lowering of revenues associated with a reduction in the tax without considering increased purchases at the pump with a gas tax more in line with our neighbors.)state seal

Please know that while I share in the goal of the proponents to adequately funding our state transportation needs, I differ in the proposed path to achieve this goal. I believe that it would be to the benefit of our state and our citizens to plug this short term transportation infrastructure revenue hole with other revenue sources rather than preventing a reduction in the gas tax.

Millis also cautions that the NC Competes legislation — touted as a tool to help North Carolina land some big economic development “prizes” — could open the door to a veritable orgy of crony capitalism:

[…] The NC Competes Act contained a few very important tax provisions, a measure dealing with airline fuel taxes, and reform/expansion of some of our state recruitment incentive programs. The main provision that caused me to reject the bill and vote “No” was the part of the bill dealing with JDIG (Job Development Investment Grants). Allow me to explain… Under the JDIG program (which House Bill 117 renames), a business that qualifies for the program can receive up to 75% off of the tax burden that other businesses have to bear to operate in the state. Not only does House Bill 117 rename the program but it also proposes to expand the current cap the Department of Commerce is under by $45 million immediately.

This amount might not sound like much but the way this program operates there is currently nearly one billion dollars encumbered in future budgets to the year of 2028, so do not be fooled by the incremental appearance of such actions. While much of the debate surrounding the expansion of the JDIG program consisted of the need for passage in order that the Department of Commerce may land the “big fish” of an auto manufacturer in the state, this dialogue was not accurately reflective of the bill itself. The language of House Bill 117 dealing with the expansion of JDIG had no exclusive provisions to landing just an auto-manufacturer. To be clear, while the Department of Commerce could use JDIG for such a deal, if the “fish came off the hook”, and the auto-manufacturer passes North Carolina by for another suitor, the proposed expansion would not revert back; therefore the further increased budgetary capacity would be available for businesses that would “create” as low as ten jobs.[…]legis

When debating this issue I often think of the quote that: “it is not what you know that is trouble, but what you know that isn’t so”. We can create an environment where jobs can grow in North Carolina (both new and existing), where wages can grow, and where individuals can prosper, but it cannot be done by competing in the race to the bottom that other states are advancing by taxing one and granting to another (income redistribution & tax burden shifting). Instead of engaging in crony capitalism, the North Carolina legislature should be working towards a freer market for individuals to choose.

As you can tell by this newsletter, it was a tough week in Raleigh for principle based conservative solutions to the problems facing our state.[…] 

Seriously.  Can we clone this guy?  (About 169 times … )

3 thoughts on “#ncga: Some common sense on the gas tax, NC Competes

  1. The more I hear about Millis, the more I like him. He is a breath of fresh air, like Mike Speciale and Larry Pittman. We need to work to elect more like them.

  2. It’s interesting to me that this pretty straightforward, well considered letter is such a contrast to what we get from so many other “powerful” Republicans in this state.

    Too many of them give simple lip service to things like free markets (I’m thinking of Mr. Dollar last week, for example), but they fail to grasp the “why”…. why such policies work – it’s not “magic” or a simple difference of “opinion” – it’s pretty basic fundamentals that many of these jokers in office just dont get.

    If “that” kind of thinking were more prevalent in both the state and national GOP…. we’d all be better off.

  3. The Georgia GOP legislative leadership is also rolling over conservatives to raise gas taxes. The conservatives asked that the changes at least be revenue neutral, but the leadership refused. There is an article up at RedState on those proceedings.

    Georgia, however, did do two things that NC should consider:

    1) they repealed the airline exemption from fuel tax (Atlanta is a major airline hub)
    2) they repealed a $5K tax exemption for alternative fuel vehicles and added a new $200 annual fee to register an alternative fuel vehicle (these cars use the roads but don’t pay gas tax)

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