RALEIGH, N.C. – Lawmakers have sent to Gov. Beverly Perdue a bill that would prevent North Carolina’s gasoline tax from going down next month.

The House gave final legislative approval Monday night to a Senate measure that would turn the current cap on the gasoline tax at 29.9 cents per gallon into a floor. That means it could go no lower than 29.9 cents through the middle of 2011.

Perdue’s office said the governor is expected to sign the bill into law.

Under the current law, state taxes at the pump won’t go down 2 cents a gallon to 27.9 cents on July 1 as expected under the current law. The tax will still be readjusted twice a year based on the wholesale gas prices.

Winston-Salem Journal
The state Senate was wise to set a minimum state gasoline tax for the coming 24 months.

The bill, which is now before the House, would set a minimum state motor-fuels tax of 29.9 cents a gallon until mid-2011. That’s the tax rate today, so no gas-tax increase will take effect this year, unless there is additional legislative action.

The gasoline tax includes an inflation adjustment that was enacted in 1989. The idea then was to collect extra revenue as gasoline prices rose. It was the bipartisan sentiment that the increasing efficiency of automobiles and the rising price of gasoline would lead to decreased consumption per vehicle. If there were no inflation adjustment, state highway revenues would fall as all of the costs associated with building and maintaining roads rose because of inflation and population growth.

The 1989 law said that gasoline taxes would be adjusted Jan. 1 and July 1 of every year.

But the legislature rescinded part of the inflation adjustment in 2006. A little-known Republican governor’s candidate was complaining about the rising gas tax at a time when gasoline prices were skyrocketing. Turning a blind eye to N.C. Board of Transportation estimates that the state would be $65 billion short of needed transportation resources over the next several decades, legislators capped the inflation factor at 29.9 cents.

With the drop in gasoline prices during 2009, the inflation factor was scheduled to reduce the state tax by about two cents a gallon. For most of us, that would have been a pittance of a savings, if we realized it at all, at the pump. Several gas-tax increases in North Carolina history have appeared to make no difference in retail price.

The fall in oil prices and the recession provide the state with a great opportunity to repair our roads economically. Project bids statewide have come in well below expectations. Contractors are desperate for work and prices for petroleum-based construction products have fallen.

The Senate’s decision to keep the tax at 29.9 cents a gallon will mean an additional $67.5 million in Highway Fund revenues over the next two years. That money can be used to match federal aid for construction, repairs and safety upgrades.

When the bill gets to the House, the usual anti-tax suspects will cry about the big hurt this will put on North Carolina motorists. It won’t. The big hurt comes every time we drive on our increasingly bumpy and potholed roads. The tax should stay at 29.9 cents.

RALEIGH, N.C.  – A plan that would prevent North Carolina’s gas tax from falling two cents a gallon July 1 would generate tens of millions of dollars for road building.

Senators voted 27-19 on Monday to replace the current cap on the gas tax at 29.9 cents per gallon with a minimum rate of the same amount through mid-2011.

Without the change, the tax is predicted to fall to 27.9 cents this summer because of lower gas prices. The tax is readjusted twice a year based on the wholesale gas price.

The change could generate another $68 million for roads because the tax would be higher than what’s projected.

The measure was given initial Senate approval last week and now goes to the House.

WASHINGTON  – President Barack Obama wants to end $26 billion in oil and gas industry tax breaks, calling them “unjustifiable loopholes” in the tax system that other companies do not get.

Obama’s proposed fiscal 2010 budget, details of which were released Thursday, also more clearly spells out his intention to shut down a proposed nuclear waste dump at Yucca Mountain in Nevada and calls for ending a government subsidy that helps utilities license and plan for new nuclear power plants.

The oil and gas industry tax breaks have often been targeted by congressional Democrats in recent years, but they have not been able to muster enough votes to rescind them. Most Republicans and the Bush administration vigorously defended the tax benefits, saying they’re needed to boost domestic oil and gas development.

In the budget statement, Obama said the tax breaks, which are expected to save the oil and gas industry more than $26 billion over the next 10 years, are “unjustifiable loopholes … costly to the American taxpayer and do little to incentivize production or reduce energy prices.”

The White House last February outlined in general terms its proposed budget for the fiscal year beginning in October. But the documents released Thursday provided details including specific numbers.

The budget would provide $197 million for the Yucca Mountain nuclear waste project in Nevada, but directs that the money be spent to “explore alternatives” to the Nevada site and ongoing licensing activities that have yet to be terminated. It provides no money for site access, new engineering or land purchases.

Closing down the Yucca project 90 miles from Las Vegas has long been a relentless ambition of Senate Majority Leader Harry Reid, D-Nev. Obama, during his presidential campaign, promised Nevada voters that he would look for other ways to address the disposal of highly radioactive waste from commercial power plants.

Obama also wants to end a research program for using nuclear power plants to develop hydrogen fuel for transportation and cancel further subsidies to the nuclear industry to help license and plan for new nuclear power reactors. The budget eliminates $168 million that had been earmarked for the reactor program next fiscal year.

A program to develop a more reliable nuclear warhead that the Bush administration had touted as necessary for easier maintenance of the country’s aging nuclear stockpile also was singled out for elimination. The budget cuts $60 million that had been earmarked for design work for the replacement warhead.

RALEIGH, N.C. – When the Legislature capped North Carolina’s gasoline tax in 2006, it gave politicians something to crow about at election time to show they cared about voters’ pain at the pump. While motorists currently save about a nickel for each gallon they buy because of the cap, its loss for the state Transportation Department is much greater: $600 million.

That’s about how much less the department will have taken in cumulatively by the time the cap is scheduled to expire next June 30, compared to the amount that would have been collected had there been no cap, according to state estimates.

The department and General Assembly researchers estimate more than half of that money would have been collected this fiscal year, when record gas prices combined with the state’s variable gas tax formula would have brought in more than $400 million extra.

Lawmakers returning to Raleigh in January must decide whether to let the cap expire or extend it and find money elsewhere to pay for road construction and repair. There’s an estimated $65 billion gap between transportation revenues and needs in North Carolina through 2030, the Department of Transportation has said.

“Politically to some it would be better not to touch” the cap, said Rep. Becky Carney, D-Mecklenburg, a member of a blue-ribbon transportation funding committee meeting last week. “But there’s no money. We’re going to have to find it somewhere and it’s going to have to be in the form of a tax or fee.”

The extra money could have been used to reduce a road-building backlog that now stretches for decades. This year’s uncollected money would have been enough to cover the $316 million shortfall now projected for the Highway Trust Fund and Highway Fund this fiscal year.

The gasoline tax and a tax on car sales are the primary sources for the two dedicated building funds that receives nearly $3 billion annually. Both have fallen off because people are driving less and buying fewer vehicles.

Salisbury attorney Bill Graham, who led a 2006 petition drive to lower the gasoline tax, said the uncollected taxes have meant more money in the wallets of working families and businesses reliant on fuel. The state’s gasoline tax was among the highest in the country.

“While the revenue was not generated, that also meant there was a savings to the general driving public at a time when some people are losing their jobs,” said Graham, who ran unsuccessfully for the Republican nomination for governor this year.

The state’s gasoline tax is automatically adjusted twice annually based on the average wholesale price of a gallon.

The adjustments, based on a six-month average for gas, were designed to keep the tax’s value from eroding. Until recently, the material cost for building roads had doubled in price compared to 2003, said Mark Foster, the chief financial officer for the Department of Transportation.

“The cap was intended to be a recovery of inflationary costs, so obviously we lost $400 million of opportunity to cover increases in fuel and construction materials,” Foster said.

The Legislature agreed to limit the tax to no more than 29.9 cents per gallon starting in mid-2006 after complaints when it rose by roughly 3 cents because gas prices had surged in the aftermath of Katrina and Hurricane Rita. Gov. Mike Easley and transportation advocates didn’t like the idea but he agreed to it when he signed the budget bill that year.

Without the cap, the Legislature’s Fiscal Research Division says the tax now would have been 34.8 cents per gallon and soared to 41 cents the first of next year.

“I still believe that the cap on the gas tax was the right thing to do,” Graham said.

The sheer size of the lost revenue can’t be overlooked. The $600 million exceeds the value of all road-building contracts approved by the Board of Transportation at monthly meetings from July through November. Replacing the aging, narrow Yadkin River Bridge along Interstate 85 could cost $400 million, Foster said.

With the struggling economy forcing contractors to bid less to highway projects and recent lower oil prices reducing the cost of construction materials, the extra cash could have helped accelerate work.

“We would’ve had the money in the bank to do these kind of things, and capitalize on the (bad) economy,” said Rep. Nelson Cole, D-Rockingham, co-chairman of the Legislature’s transportation oversight committee. “It would have multiplied our efforts considerably.”

The Legislature might let the cap expire in a non-election year. The public may forgive lawmakers, too, if gas prices are still at their current $2 per gallon.

Graham said the cap should be extended and no new road revenue sources authorized until DOT and Gov.-elect Beverly Perdue makes the agency more efficient.

Rep. Bill McGee, R-Forsyth, another blue-ribbon panel member, said voters would prefer to have a flat tax rate that doesn’t change. But McGee acknowledged that fixing the gas tax won’t change the larger problem.

“The gas tax is not going to raise the amount of money that we need,” he said.

FORT WAINWRIGHT, Alaska – Vice presidential candidate Sarah Palin’s assertion that she believes humans contribute to global warming – made in her first major interview since joining the Republican ticket – is more definitive than her previous statements.

Palin said she didn’t disagree with scientists that “man’s activities” could be contributing to the problem.

“Show me where I have ever said that there’s absolute proof that nothing that man has ever conducted or engaged in has had any effect or no effect on climate change,” Palin told ABC News in an interview broadcast Thursday and Friday. “I have not said that.”
 
However, in the past Palin has expressed doubts about the connection between emissions from human activities and global warming. She told the Internet news site Newsmax last month, “A changing environment will affect Alaska more than any other state, because of our location. … I’m not one, though, who would attribute it to being man-made.”

In a letter to Interior Secretary Dirk Kempthorne in December 2006 about listing the polar bear as a threatened species, Palin questioned what human activities could be regulated to help the bear.

“When a species’ habitat (in this case, sea ice) is declining due to climate change, but there are no discrete human activities that can be regulated or modified to effect change, what do you do?” she wrote.
 
In an interview with a Fairbanks newspaper within the last year, Palin said: “I’m not an Al Gore, doom-and-gloom environmentalist blaming the changes in our climate on human activity.”
 
Republican presidential candidate John McCain, a convert to the cause of fighting global warming, has said humans have caused climate change and he has proposed capping the greenhouse gases blamed for the problem.

In the ABC interview, Palin said she believes that “man’s activities certainly can be contributing to the issue of global warming, climate change. … Regardless, though, of the reason for climate change, whether it’s entirely, wholly caused by man’s activities or is part of the cyclical nature of our planet – the warming and the cooling trends – regardless of that, John McCain and I agree that we gotta do something about it.”

Questions about Palin’s knowledge of foreign policy dominated the interview with ABC’s Charles Gibson. Palin repeated her earlier assertions that she’s ready to be president if called upon, yet sidestepped questions on whether she had the national security credentials needed to be commander in chief.

McCain has defended his running mate’s qualifications, citing her command of the Alaska National Guard and Alaska’s proximity to Russia.

Pressed about what insights into recent Russian actions she gained by living in Alaska, Palin told Gibson,

“They’re our next-door neighbors and you can actually see Russia from land here in Alaska, from an island in Alaska.”

Palin, 44, has been Alaska’s governor for less than two years and before that was a small-town mayor. Asked whether those were sufficient credentials, Palin said: “It is about reform of government and it’s about putting government back on the side of the people, and that has much to do with foreign policy and national security issues.”

She said she brings expertise in the effort to make the country energy independent as a former chairman of the Alaska Oil and Gas Conservation Commission.

Palin said that other than a trip to visit soldiers in Kuwait and Germany last year, her only other foreign travel was to Mexico and Canada. She also:
      -Appeared unsure of the Bush doctrine, which President Bush laid out in a West Point speech in June 2002. Asked whether she agreed with that, Palin said: “In what respect, Charlie?” Gibson pressed her for an interpretation of it. She said: “His world view.”

The doctrine essentially holds that the U.S. must help spread democracy to stop terrorism and will act pre-emptively to stop potential foes.

“I believe that what President Bush has attempted to do is rid this world of Islamic extremism, terrorists who are hell bent on destroying our nation,” Palin said, though she added “there have been mistakes made.”

Pressed repeatedly on whether the United States could attack terrorist hideouts in Pakistan without the country’s permission, she said: “If there is legitimate and enough intelligence that tells us that a strike is imminent against American people, we have every right to defend our country. In fact, the president has the obligation, the duty to defend.”

Bush watched portions of the interview and “thought she handled herself well,” White House spokesman Tony Fratto told reporters Friday. Asked how Bush viewed Palin’s response to questions about his doctrine of pre-emptive action, Fratto said, “I don’t have anything on that.”
      -Said “we’ve got to put the pressure on Iran” and its nuclear program. Asked three times what her position would be if Israel felt threatened enough to attack Iranian nuclear facilities, Palin repeatedly said the United States shouldn’t “second guess” Israel’s steps to secure itself.
      -Called for Georgia and the Ukraine to be included in NATO, a treaty that requires the U.S. to defend them militarily. She also said Russia’s attack into Georgia last month was “unprovoked.” Asked to clarify that she’d support going to war over Georgia, she said: “Perhaps so.”
 
On the environment, Palin said she disagreed with McCain’s position against oil drilling in the Arctic National Wildlife Refuge in Alaska.

“We’ll agree to disagree,” she said, “but I’m gonna keep pushing that and I think eventually we’re all gonna come together on that one.”