WRAL reported that the gas tax suspension is expected to cost NCDOT $360 million, which lawmakers are replacing with money from the state’s Stabilization and Inflation Reserve fund.
North Carolina Fuel Tax Relief and State Budget Realities
- The 41-cent-per-gallon gas tax suspension is expected to cost NCDOT $360 million, which lawmakers are replacing with money from the state’s Stabilization and Inflation Reserve fund.
- Attorney General Jeff Jackson announced a new program called NC Fuel Check to investigate retailers suspected of withholding savings, carrying civil penalties of up to $5,000 per violation.
The revenue helps pay to repave roads, repair bridges and build new highways. To make up for the lost revenue, state lawmakers transferred $360 million from the state’s Stabilization and Inflation Reserve fund to NCDOT.
With $360 million transferred to NCDOT, the reserve fund leaves about $500 million, which could make it difficult to extend the suspension beyond the end of November.
Inventory Costs Explain Delays in Retail Price Adjustments
Gas stations buy gasoline in advance at a particular price, factoring in the taxes they pay. Many gas stations operate on tight margins and may not be able to absorb those costs.
NC Fuel Check Program Targets Margins and Retail Compliance
To monitor compliance and address consumer complaints, Attorney General Jeff Jackson announced a new program called NC Fuel Check.
The law does not require retailers to lower their prices. Businesses found in violation could face civil penalties of up to $5,000 per violation.
Evaluating Alternative Relief Models Against Broad Tax Suspensions
In 2022, Chicago tried a similar approach through its “Chicago Moves” program. The cards were restricted to people below a certain income threshold.
With nearly 1.5 million people receiving SNAP benefits, that program would cost approximately $216 million. That is considerably less than the $360 million being used to offset the gas tax suspension.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
