Legislative Update from Rep. Frank Iler – February 16, 2015

Last week in the General Assembly in Raleigh we:

Honored the 105th anniversary of the Boy Scouts of America and the 100th anniversary of the Order of the Arrow, the scouting honor society; had many discussions on the gas tax issue and saw the Senate pass a bill stabilizing the gas tax; and heard the presentation of the all-important revenue forecast for 2015 – 2017.

At our Monday evening session we were treated to a visit by many Eagle scouts and Order of the Arrow members. They helped us recognize the 105th birthday of the Boy Scouts of America and the centennial year of the Order of the Arrow. As a member of a Scouting family that includes six Eagle Scouts and two Life Scouts spread over four generations, I was particularly honored to be in attendance on the House floor as these young men presented the colors (flags) and spoke about the influence of scouting on their lives. Also, as a primary sponsor of House Resolution 57, which honored these institutions, I spoke briefly on the multi- generational influence of scouting’s values of leadership and persistence.

Transportation issues were at the forefront of discussions in the House and Senate last week. We were considering many ways of fairly funding the road building and maintenance needs of the state, while the traditional gas tax revenue is declining. The Senate introduced and passed Senate Bill 20, which reforms the motor fuels tax. This is the tax on each gallon of gas at the pump, which has been the main funding stream for the maintenance and building of roads and bridges since the 1980s. This bill stabilizes or flattens the tax at 35 cents, which is a cut in the 37.5 cent current tax. The problem is that the tax will drop in July, and this will maintain it at 35 cents. We hope to stabilize it temporarily and come in later with a fair plan to adjust fees that have not been adjusted for inflation since the 1980s, and to insure stable funding for our roads and bridges. The alternative is to start cutting road and bridge projects scheduled for maintenance and construction over the next 10 years.

On Thursday, we had a joint meeting with the Senate with all members invited to hear the 2015 – 2017 Consensus Revenue Forecast and Budget Outlook. The forecast for the balance of the 2014 – 2015 fiscal year, which ends June 30th, is a positive change of $586 million or 2.9%. What you will hear in the media is that this is $271 million or 1.3% below the forecast last year on which the budget was based. What you won’t hear is that a fluctuation of plus or minus 2% is normal. What you also won’t hear is that the economic upturn forecasted for 2015-16 and 2016-17 will produce positive revenue of $680 million and $887 million respectively. This is plus 3.3% and 4.1% for each of the next two years. This forecast is the consensus of the best experts from the Office of State Budget and Management and the Fiscal Research Division of the General Assembly. The experts told us over and over that this is a “cautious” forecast. There are plenty of budget needs that will compete for these funds, but it is a far better picture than the more than $2.5 billion budget shortfall in 2011 with which we had to deal.

This week we expect to take up Senate Bill 20 which concerns the motor fuels tax stabilization.