Despite the headlines, McCrory signed bill to raise gas tax and punish struggling homeowners

nc-gas-tax-can-400There a lot of headlines today about the lower gas tax in North Carolina as a result of legislation passed this week by the General Assembly and signed into law by Gov. Pat McCrory. And it’s technically true. The state gas tax went down today by one and a half cents.

One conservative advocate took to Twitter to wish us all “Happy Gas Tax Reduction Day” with hashtags like #toughproblems and #findingsolutions, all to support the legislative leadership and help perpetuate the deception that lawmakers voted to lower our taxes.

But the legislation is a tax increase, not a tax cut. Without the bill, the gas tax would drop by roughly 8 cents a gallon this summer. The legislation cancels that reduction. We will all pay a higher gas tax at the pump for the next few years. That is a tax increase.

There’s a legitimate policy reason for it. The state desperately needs more transportation funding, though it would be easier to accept if the General Assembly also reinstated the state Earned Income Tax Credit to help low-wage workers handle the tax hike.

It would also be nice if legislative leaders would simply own up to the fact they raised taxes because they want more transportation funding instead of playing semantic games.

And in case you missed it, the gas tax increase bill also includes a provision that taxes the mortgage relief granted to help people avoid foreclosure. A WRAL story explains it this way.

There are several programs that help people who have problems paying their mortgages. Several of those programs forgive a large part of the debt people owe on their first house.

Federal tax law does not treat the forgiven debt as income for 2014. However, North Carolina will, meaning those who have recently lost their homes due to the inability to pay will be charged thousands of dollars in taxes.

“That provision is tantamount to saying we’re going to stomp folks while they’re down, and then we’re going to dance on them,” said Rep. Kelly Alexander, D-Mecklenburg.

Higher gas taxes and punishing people struggling to keep their homes. That’s what the legislation does that lawmakers passed and Gov. McCrory signed. Time for new hashtags. #tellusthetruth, #highertaxes  and #punishinghomeowners come to mind.

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