The road funding bill proposed by the bi-partisan House transportation study committee passed by a vote of 87 – 20. I voted against it.
The bill does the following:
- Lowers the gas tax by 6 cents per gallon and adds a sales tax to the wholesale price of gasoline. At the current wholesale price, it is the equivalent of raising the gas tax by 10 cents per gallon. This new formula is expected to raise an extra $427,000,000 per year.
- Reduces individual income taxes by moving the tax brackets up. The new brackets are expected to reduce income taxes by $50,000,000 after a two year phase-in.
- Grants authority to the Governor to appoint Department of Transportation Commissioners. The commissioners would then appoint the Secretary of Transportation. All of the appointments are subject to legislative approval.
Except for the income tax reduction, these changes were proposed by the bi-partisan study committee and were introduced to the Ways & Means Committee. The bill was amended in W&M to add a $50 million income tax cut. No other amendments were offered in W&M.
The bill then came up for debate before the full House of Representatives. There were only 16 amendments offered. Only one amendment passed. It was offered by Rep. Russell Ott (D) and directed the state highway fund to transfer $25 million from the fund and split it evenly between the transportation committees of each county. The funds must be used only for repairs on state roads within the county.
Of the 16 amendments offered, two were offered by Democrats and 14 were offered by Republicans.
The other amendment offered by a Democrat would have returned the governance of DOT back to the way it was years ago. Back then, commissioners were elected from each judicial district instead of each congressional district. This amendment would have doubled the number of commissioners. It failed 51 to 48.
The remaining 14 amendments were offered by Republicans. None passed.
Rep. Todd Atwater offered an amendment to give the Governor total control of DOT. It was voted down 65 to 38.
Rep. Neal Collins offered an amendment to increase the income tax cut from $50 million to $220 million. It was voted down 71 to 31.
Rep. Joshua Putnam attempted to eliminate sales tax exemptions and redirect the funds to roads thereby eliminating the need for any tax increase. It was tabled.
Rep. Rick Quinn and I developed an amendment together. He concentrated on extending more flexibility to the counties by giving them the opportunity to offer a referendum to impose up to a 6 cent per gallon tax on gasoline.
I designed a more meaningful income tax cut. The amendment eliminated the 7% and 6% top rates and dropped the top rate to 5.75% over a 10 year period. This would have made us the same as North Carolina. At the end of ten years, it would have cut $896 million from the state budget. I also put in a trigger to suspend the tax cut for one year should we encounter another steep economic decline like we did in the Great Recession. The trigger would have kept the tax cut where it was and then restart it after a year.
Our amendment was voted down 66 to 37. Of the 66 who voted against the income tax cut, 36 were Republicans and 30 were Democrats. Of the 37 who voted for the income tax cut, 36 were Republicans with 1 Democrat.
I voted against the bill because it did nothing well. Keeping a commission structure but having commissioners appointed by the Governor and who represent congressional boundaries makes no sense. Dropping the gas tax and swapping it with a sales tax further destabilizes revenue flow. The income tax cut was anemic at best.
I also voted against the bill because of what was missing. I anticipated more substance to be added to the study committee proposal as it went through the W&M Committee. That did not happen. The bill contained nothing about reforming, auditing or bringing transparency to DOT. The bill did not acknowledge the effect of electric cars and hybrids that use little to no gasoline. The bill did not seem to be a product of the 21st century.
A lobbyist asked if I would vote for the bill. I asked him if he had a minimum standard that the bill should meet before he thought it a good bill. He replied no. He asked if I could just vote for it no matter how bad it was. I said no.
The General Assembly addresses road funding every 25 years or so. Since tax bills are required to start in the House, we have a responsibility to produce the best possible solution at the outset. We did not do that.
The bill now limps over to the Republican controlled Senate where they have already devised a road plan that raises almost $1 billion in new fees and taxes with no income tax relief. We expect them to add those provisions to the House bill.
The Senate has also started drafting a $750 million bond bill to replace the one that conservatives defeated in the House a few weeks ago. It seems that monsters are rising on that side of the flat earth that we call the General Assembly.