Gas tax rebate: North Carolina lawmakers propose a $200 refund for drivers
North Carolina State Democratic lawmakers are pushing to give residents a one-time direct payment to help ease the burden from the rising price of gasoline.
The price of gasoline continues to climb across the United States causing ever more pain at the pump. Proposals to give drivers some relief have been put forth around the nation from a gas tax holiday, like New York that just went into effect, to direct payments as was approved in Maine.
Democratic lawmakers in the North Carolina are trying to convince their GOP colleagues to do the latter. “We want to put more money in their pockets now,” Senate Democratic Leader Dan Blue said. However, Republicans, who control the legislature, would prefer to put in place longer term tax cuts instead of a one-off measure.
North Carolina $200 Gas Tax Rebate Act
The Democrats introduced Senate Bill 897 on 26 May, which would dedicate $1.3 billion of the estimated over $4 billion budget surplus the state collected over the past year. The proposal would give those North Carolinians who are residents and aged 18 or older as of 31 March 2022 and who are licensed drivers a $200 tax rebate.
Supporters would consider extending the payments to younger residents of the Tar Heel State but “we need to do it in a way that does not hurt the bottom line of the state budgeting process,” Blue said. If approved, the rebate would be issued as either a check or a debit card and sent no later than 1 October 2022.
The average price of gasoline in North Carolina, at $4.49 on 4 June, is below the national average which jumped to just shy of $4.82 a gallon. Gas prices have risen by over 55 percent since the same time last year when a gallon of regular across state was pushing $2.89 on average according to AAA.
What’s causing the high gas prices?
When the covid-19 pandemic hit, demand for crude oil and its price plummeted as countries shut down and people sheltered at home. This had the knock-on effect of creating a massive glut of the fossil fuel and forcing producers to dial back production.
However, as economies around the world began to reopen and demand surged, taps couldn’t be brought back online fast enough to meet the demand. Additionally, some production has been intentionally left idle as investors pressure companies to increase revenues to makeup for lost profits. This has been especially true for the fracking industry that helped make the US the world’s largest oil producer.
Russia’s invasion of Ukraine and the subsequent sanctions on its fossil fuels has only exacerbated the situation sending prices over $100 for the first time since 2014. Despite President Biden ordering the largest release from the strategic reserve in US history, the one million barrels a day have not been able to significantly reverse the upward pressure on prices.