This story was originally published by NC Newsline.
North Carolina lawmakers voted nearly unanimously Wednesday to pass legislation suspending the gas tax until the end of November. But it’s unclear when prices at the pump will actually drop, or by how much.
The House approved the bill 111-1 Wednesday afternoon, sending it to the Senate. Rep. Pricey Harrison, D-Guilford, was the sole vote against it. Senators voted 41-0 in favor. Gov. Josh Stein is scheduled to sign the bill into law on Friday during an event in Fairview.
House Speaker Destin Hall, R-Caldwell, said this is the first time North Carolina has suspended the entire gas tax, which currently totals 41 cents per gallon. He conceded consumers aren’t likely to see prices drop by that amount, based on what’s happened in other states.
“I would expect 30 cents, maybe 35 cents in reduction from this bill,” Hall told reporters. Timing of the price reductions may vary based on location, he said. “We’ll see what the global market does as well.”
It’s also unclear when those savings will appear. The measure says retailers don’t have to cut prices on wholesale gas they bought and paid taxes on before the tax holiday took effect.
House Majority Leader Brenden Jones, R-Columbus, claimed the bill would offer consumers “immediate relief” at the pump, and also said it “requires that the cost of the fuel actually reflect the savings” from the tax holiday.
Senate Republicans contradicted him.
Sen. Buck Newton, R-Wilson, said he could not say when or whether gas stations will drop prices by 41 cents a gallon.
“I don’t know because I won’t know what they’re buying it for from the wholesaler or what the wholesaler is getting it for at the terminal, and on up the line,” Newton said.
The legislature can control the state gas tax, so that’s what it’s doing, Newton said.
‘A Little Bit Weird to Me’
Sen. Val Applewhite, D-Cumberland, said consumers will want to know how much they’ll save at the pump. That Republicans in the Senate Finance Committee couldn’t say seems “disingenuous and a little bit weird to me,” she said.
Senate Democrats said there’s no guarantee that retailers will pass the tax savings on to drivers.
An amendment proposed by Sen. Jay Chaudhuri, D-Wake, that would have allowed the Attorney General to go after retailers for price gouging if they didn’t apply the tax cut to gas prices was ruled out of order and did not receive a vote.
“Nothing in this bill makes sure gas stations actually pass these savings along to you,” said Senate Democratic Leader Sydney Batch, D-Wake.
Democrats said the bill was a political move ahead of the general election in response to Republicans’ low poll numbers.
House Democratic Leader Robert Reives, D-Chatham, said his caucus was voting yes, because members will “take any relief we can get” for North Carolinians. But he said gas prices have been high for a long time already.
“If we’re that serious about helping people, we could have done this in the normal session, could have done it two weeks ago,” Reives said. “I would just ask all of us to keep that in mind.”
Sen. Lisa Grafstein, D-Wake, said consumers will save a little money, which will be welcome, though no one can say how much.
“Let’s not pretend that this is not about politics first and foremost,” Grafstein said.
“There will also be a whole lot spent on new ads going out by some of our colleagues claiming to have taken steps to address the cost of living crisis,” she said. “I’m sure the identical social media posts are already teed up and ready to go.”
Gas Tax Repeal in Place Through November
The bill also requires farmers and loggers as well as retailers to be notified about the suspension of taxes as well as the extension until December 31 of the current waiver for on-road use of dyed diesel. Special notice to these key voting constituencies contributes to her cynicism, Grafstein said.
Hall said lawmakers didn’t approve a gas tax holiday earlier this year because gas prices were declining in July when the legislature adjourned.
The prices have risen again in recent weeks, so lawmakers wanted to provide relief ahead of holiday travel, according to Hall. The current suspension runs through November 30. Hall said it’s possible the legislature could extend it.
However, Senate Leader Phil Berger, R-Rockingham, told reporters there have been no discussions between his chamber and the House about extending the gas tax holiday beyond November. “This is something that we’ve looked at as a temporary measure,” he said.
When asked why Republican leaders didn’t also consider tax relief on groceries, Hall said the gas tax suspension helps farmers lower their costs in harvest season. With lower costs for agriculture, he said, there should be a downstream effect for buyers at the grocery store. He also predicted it could help lower retail prices by reducing transportation costs.
“From an economic standpoint, and in terms of bang for the buck, trying to get the most help to taxpayers using their money, we felt like this time of year really makes sense for a lot of reasons,” Hall told reporters.
