SC to have 3-month Gas Tax Moratorium

Charlotte.com South Carolina has lost some of its lottery lure, but now could draw North Carolinians in another way -- an additional 17-cent-per-gallon break on gas. S.C. Gov. Mark Sanford this week proposed a three-month moratorium on the gas tax for the summer. The state House approved it hours later, but moved the tax-free period to the winter so summertime tourists would pay their share. The Senate must approve a moratorium before it can start. The driver of a vehicle with a 15-gallon tank would save $2.52 a fill-up without the S.C. tax. South Carolina's tax rate already is 13 cents a gallon less than North Carolina. I fill up in SC sometimes now. I don't make a special trip but there are times when I'm in Tabor City or heading to Mrytle Beach and I'll ease up to a SC pump for a tank full. Read more in the extended section below. South Carolina could set a national precedent: No other state has come this close to approving such a long moratorium. Georgia suspended its gas tax for September after Hurricane Katrina disrupted supplies and a few other states have discussed moratoriums with little outcome. In North Carolina, Gov. Mike Easley proposed capping the state's 29.9-cent-per-gallon tax in a budget submitted to lawmakers this week. The cap is expected to meet little opposition. The talk about tax breaks comes when pump prices are poised to rise again. Following national trends, average wholesale prices at the Charlotte storage terminal have risen 16 cents since Monday, according to industry tracker DTN FastRacks. Charlotte-area station owners said Thursday that wholesale spike likely will send pump prices higher soon, a week after slumping wholesale prices signaled a drop. "It's been like a roller coaster," said Robert Campau, head of Southeast region operations for Circle K, one of the area's dominant gas stations. "We're just holding our breath." Charlotte-metro gas averages have fallen less than a nickel since peaking soon after Easter weekend, according to AAA data. Area drivers are paying $2.87 a gallon on average for regular gas -- 70 cents more than a year ago. Gas prices have spiked in recent weeks because traders have bid up crude-oil futures on fears the growing demand will shrink supplies. The year's highest gas consumption came just last week, despite nearly a month of unusually high prices, according to the U.S. Energy Department. "Nothing is stopping demand right now," said Brian Milne, DTN's refined fuels editor. With little slowing prices, Carolinas lawmakers said they want to help drivers by curbing taxes. Both states have surpluses that can cover shortfalls for road construction and maintenance paid by gas taxes. Sanford would have preferred the S.C. moratorium run from Memorial Day through Labor Day when South Carolinians travel more, spokesman Joel Sawyer said. The House, however, voted to halt the 16.8-cent-per-gallon tax on Oct. 1. "A lot of folks felt strongly that the tourists should pay their share," said state Rep. James Merrill, the House majority leader. The total expected tax savings dropped from $134 million to about $80 million with the shift to the winter. Merrill said if gas prices drop sharply over the summer, he could see a move to put the winter-time moratorium on hold. Sanford would then ask lawmakers to use the savings elsewhere. "The bottom line is that South Carolinians deserve tax relief," Sawyer said. State Senate leaders did not return calls Thursday. But in published reports, a couple of senators said they believe it was political pandering in an election year for the governor and House members. Sen. Hugh Leatherman, the finance committee chairman, told The Associated Press he was not against the moratorium, but questioned whether stations would drop prices. Michael Fields, executive director for a state trade group for convenience stores and distributors, said Thursday that he expects stations to lower prices in line with the tax because they have to follow competitors. Georgia drivers saved an estimated 12 cents a gallon during its one-month moratorium, an economics professor wrote in the Atlanta Journal-Constitution last year. That was a little less than the state gas-tax average of 15 cents per gallon.