- NC Policy Watch - http://www.ncpolicywatch.com -

The disingenuous gas tax hike an ominous sign for the legislative session

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If you are looking for a sign about what sort of legislative session to expect this year, the gas tax increase passed by the Senate this week is an ominous one.

Don’t be confused by the misleading spin from Senate leaders. The bill will raise the gas tax in North Carolina. No one really disputes that fact. The proposal cuts the tax temporarily but then raises it by changing the formula that determines the tax.

Economists at the General Assembly say the Senate bill will raise the gas tax by 5 to 7 cents over the next four years, increasing transportation funding by roughly a billion dollars—and they work for the Senate leaders who are absurdly claiming that the plan provides tax relief to consumers.

There’s a legitimate public policy argument for raising the gas tax. The state needs billions of dollars in new revenue for transportation projects, roads and transit, and to repair the crumbling bridges and highways across the state.

The current formula for the gas tax that’s tied to wholesale gas prices would result in a larger tax cut in July than the temporary reduction in the Senate legislation. That would only make the transportation funding problem worse.

Something clearly has to be done and an increase in the gas tax is a viable option in the short run, though it would be easier to take if lawmakers would also consider some tax relief for low-income families who are struggling and can’t afford the extra burden. Reinstating the Earned Income Tax Credit would be an obvious solution.

But the problem with the gas tax bill isn’t necessarily the tax hike itself or even the semantic gymnastics Senate leaders are performing to avoid admitting that they are increasing taxes.

The problem is the way the legislation was developed and the unrelated changes to the tax code it makes that have nothing to do with gas taxes.

No one knew the legislation was coming. Reportedly even Governor McCrory and House leaders were caught off guard when an unrelated tax bill was changed in a Senate committee to include the gas tax increase and other provisions that no one had seen before.

That’s a troubling enough practice when it happens at the end of a legislative session when last minute deals are made in the rush to adjourn. It makes it impossible for the public, the media, and most lawmakers themselves to keep up, much less have any input.

But this is not the end of the session. It is the beginning. The gas tax provisions alone deserve measured debate, expert testimony, and public input about their place in a long-term transportation strategy. So do the other provisions that were snuck into the bill. What’s the hurry exactly, other than to pass a tax increase quickly while lying about it, hoping to minimize the political damage?

One of the other provisions in the legislation would startlingly hurt homeowners struggling with foreclosure by counting as income any portion of their mortgage debt forgiven by a lender.

Sen. Tamara Barringer, a Republican, bucked her leadership and voted against the bill because of the change, telling the News & Observer, “these are people that have lost their homes. Are we going to tax them when they’re trying to get back on their feet?” Apparently the answer from Senate leaders is yes.

There were no hearings on that part of the gas tax bill, no discussion with mortgage lenders or people who work with struggling homeowners.

The bill also reinstates a limited tax deduction for teachers who buy classroom supplies out of their own pockets. It’s a remarkable policy statement, an admission that the General Assembly has no intention of providing schools with enough funding for classrooms and expects underpaid teachers to pick up the slack—and receive a small tax deduction for part of what they are forced to spend to their jobs.

Maybe the state should save money by no longer providing desks and computers and phones for legislators. Make them furnish their offices themselves and let them deduct the first $200 they spend from their taxes.

The 2011 General Assembly created the tax deduction for teachers. The 2013 General Assembly abolished it in the name of “tax reform.” Now the Senate leadership wants to reinstate it to show how much they care.

A better way would be to adequately fund classrooms to give teachers the supplies they need so they don’t have to come up with the money on their own.

A gas tax increase Senate leaders refuse to admit is a tax hike, brought up with no notice and little chance for meaningful debate. A regressive tax assessment on people struggling with foreclosure and a meager and maddening gesture allegedly to help teachers.

Passing this legislation had it all. Bad policy, political doublespeak, and an undemocratic process.

And the session is just getting started.