North Carolina Department of Transportation board members are scheduled to hear a presentation this week on the idea to tax motorist on the number of miles they drive instead of by the gallons of gas they buy.
NCDOT predicts a 35% cut in federal funds through 2040 with a budget shortfall between $86 billion and $148 billion due to more fuel efficient vehicles being produced and changing motorist habits.
NCDOT’s responsibility is the second biggest in the country, only behind Texas, in terms of state maintained mileage according to the Revenue Enhancement Study. Adding to the concern for officials is unprecedented population growth and truck traffic particularly heavy in the state.
The report says a pilot program would be the first step for a possible switch to a mileage based tax system. 0.5 cents per mile for cars would equal $495 million in annual revenue, while one cent per mile would be used for vehicles that fall under the IRP commercial guidelines. Within the last two years 30 revenue options have been adopted or reinstated in other states.
In a report in January by the American Petroleum Institute motorist in North Carolina pay 37.75 cents per gallon state tax and combined with the Federal tax of 18.40 cents per gallon it brings a total of 56.15 cents a gallon in taxes. Diesel taxes are 37.50 cents for state and 24.40 for Federal for a total of 62.15 cents.
Revenue Enhancement Study from NCDOT
State Motor Fuel Taxes Report from American Petroleum Institute