Gov. Mike Easley said Friday he wants the General Assembly to freeze the gasoline tax and plans to provide "broad-based tax relief" in his budget proposal next week.
The gasoline tax, currently at 29.9 cents a gallon, is the one of the highest in the Southeast. The tax is recalculated twice a year based on the wholesale price of gasoline.
Gas prices jumped last year after Hurricanes Katrina and Rita damaged oil operations along the Gulf Coast. The gas tax increased 2.8 cents per gallon Jan. 1 and critics say it could increase again July 1.
Easley said his proposal would allow the tax to drop, but prevent it from climbing higher. The General Assembly reconvenes Tuesday, the same day anti-gas tax forces were expected to rally not far from Easley's office in Raleigh.
Most Republicans and several House Democrats, particularly in western North Carolina, asked for rolling back the tax late last year, but they were rebuffed by Easley and other legislative leaders.
"That's going to be a real positive," said Rep. Bruce Goforth, D-Buncombe, one of the early freeze supporters. "People need relief, so the sooner the better."
The Democratic governor blamed the higher prices on President Bush and Congress for their inability to ease the burden on consumers. Easley's budget also will include $10 million in heating and cooling assistance for low-income families.
"Nobody ever anticipated that Washington would let gas prices get this high," Easley said. "I believe that it is appropriate to put a freeze in place. Even if gas prices continue to rise, the state tax will not."
Easley's release didn't mention the other tax relief proposals, and his office did not provide any details. He said his budget would provide an additional $218.7 million for road construction and repairs to make up for lost gas tax revenue.
Legislative financial analysts told budget-writers Thursday that they expect a revenue surplus of nearly $1.1 billion when the fiscal year ends June 30.
Combined with money unused by state agencies or unallocated by budget-writers, as well as unexpected revenue growth projected for next year, the General Assembly will have roughly $2 billion available for new spending or tax reductions for the year starting July 1.
Easley, House Speaker Jim Black, D-Mecklenburg, and Senate leader Marc Basnight, D-Dare, have generally been cool to the idea of pulling back the gasoline tax, arguing it would help motorists only a little while delaying construction of road projects. The state faces a $30 billion shortfall in transportation needs over the next 25 years.
But the governor said Friday the state has done all it can and blamed federal officials for continued high prices, in part by failing to wait until recently to investigate record oil company profits.
Bill Graham, a Salisbury attorney who has led a personal anti-gas tax campaign and is organizing Tuesday's rally, didn't immediately return a phone call seeking comment Friday. Neither did his consulting firm in Raleigh.
Senate Republican Leader Phil Berger, R-Rockingham, said he was glad to see Easley "come around to a position that the gas tax in North Carolina could be too high."
Berger and other Republicans asked Easley last fall to call a special session to keep the gas tax at 27.1 cents per gallon before it rose Jan. 1. Senate Republicans plan to seek legislation this session that would roll the tax back to 27.1 cents.
Black and others House Democrats plan to roll out legislation next week intended to keep the gas tax from increasing this summer, according to Julie Robinson, a spokeswoman for Black.
Basnight, in a prepared statement, said gas tax legislation would be considered when senators have more information on how it would impact both road building and consumers. The state also should consider legislation to promote alternative fuels and fight price-gouging, he said.
Our state government is a juggernaut with it's $17 billion operating budget. If Easley really wants the to make a change he'ld ask for and try to get us a smaller more efficent government. But that's wishful thinking on my part. Our large state government is the one gouging the consumers at the pumps and anywhere else they can squeeze a few more pennies. No doubt Easley is right when he says that every penny of tax money is needed and that there is nowhere to cut taxes. Our taxes have to be high to pay for the huge monster of a government on the back of every tax payer in the state. The only way to truely save the consumers of this state money is the one option that won't come out of Easley or Black's mouth and that is to shrink state waste.