North Carolinians are “learning there’s no such thing as trust in the Highway Trust Fund,” said Bill Graham, chairman of North Carolina Conservatives United, at a press conference on Wednesday. As a result, he said, support is growing for the repeal of a recent hike in the state’s gas tax.

More than 22,000 North Carolinians have signed an online petition calling on the General Assembly to repeal the tax. “We’re getting on average about 750 to 1,000 a day,” Graham said. His group is overseeing the petition drive at the web site stopthegastaxhike.com.

“This hurts people in their pocketbook, and I don’t think the leadership up here understands that,” Graham told reporters in the state Legislative Building less than 24 hours before the first meeting of a new Joint Select Committee on Energy and Fuel Costs. That group will make recommendations to the full General Assembly.

“I hope what comes out of the meeting is a recognition that there is grass-roots support for repeal of this tax,” Graham said, “and that they take some action to recommend to their leadership — in the back room, front room, or otherwise — to call a special session.” Lawmakers would need a special session to repeal the tax hike.

Graham said the online campaign started less than three weeks ago and will continue until lawmakers roll back the tax. “If you’re the individual paying the tax or a business paying the tax, you feel like you’re getting socked between the eyes,” Graham said.

The state’s gas tax climbed by 2.8 cents January 1, giving North Carolina a total gas tax of 29.9 cents per gallon. “The fifth-highest tax in the country is now upon us,” Graham said, “and we drive on some of the worst roads in the country.”

Adjusting the gas tax to match changes in the wholesale price of gasoline is a provision of the 1989 law that created the Highway Trust Fund, the state’s fund for high-priority road projects. It allows such tax increases twice a year when the average wholesale gas price climbs.

Graham says he and his colleagues want more than a repeal of the latest gas tax hike. “I want them to go back and look at the formula that we’re using, and then look forward to what could happen to the driver in this state,” he said.

Graham offered no specifics about the structure of a new gas tax, but he questioned the General Assembly’s decision to shift money out of North Carolina’s Highway Trust Fund to pay for other projects. Hundreds of millions of dollars have over time — and continue to be — used for non-transportation purposes even as the state faces tens of billions of dollars in unfunded highway needs over the next 25 years.

“People are learning that there’s no such thing as trust in the Highway Trust Fund,” Graham said. “This has got to stop. Over the last four years, more than $1 billion has been taken out of the Highway Trust Fund and spent for purposes other than good roads.”

Despite obvious needs — the state has $30 billion in unfunded transportation projects over the next 25 years — the trust fund represents a large pot of money that can be drawn upon to close state budget shortfalls whenever they occur. In fiscal 2002-03, Gov. Mike Easley ordered transfers from the trust fund to the General Fund increased to $377.4 million. Since then, transfers have been running about $250 million per year. This amounts to nearly one-fourth of the funds expenditures — and more money than the state spends on urban loops ($191 million in fiscal 2005-06).

North Carolina’s last major overhaul of its transportation program occurred in 1989. In that year, the General Assembly created the Highway Trust Fund. The trust fund uses revenues from higher gasoline and other taxes for specially designated highway projects. These include originally seven (now 10) interstate-quality loop projects around the state’s major cities and 31 intrastate highway projects. Some of the extra tax revenues also go to fund paving dirt roads and to fund the streets systems of the state’s cities and towns.

One element of the act was a provision that the gasoline tax would vary with the price of gasoline. The tax formula is 17.5 cents per gallon plus 7 percent of the wholesale price of gasoline. The tax rate is adjusted twice a year.

While the Highway Trust Fund is among the state’s primary highway programs, one of its largest expenditures has nothing to do with transportation: It’s a transfer to the state’s General Fund. The law creating the trust fund also specified that $170 million a year go to the General Fund.

The current situation has prompted calls for changes in state policy. A panel appointed by the General Assembly to study the transportation needs of the state’s urban areas released a report in December that, among other recommendations, called for ending transfers from the Highway Trust Fund to the General Fund.

A group of legislators, meanwhile, has called for the legislature to return to session and provide relief for families struggling to cope with high energy prices by eliminating the gasoline tax increase. Easley, however, has refused to do so. Graham and his supporters hope their online petition campaign will prompt some action.

Some media reports have tied the online campaign to Graham’s bid for public office. The Salisbury attorney and businessman downplayed that idea during the news conference. He shared a similar message in a one-on-one interview Wednesday evening with Carolina Journal.

“I would be less than truthful if I didn’t say that I had great political interest in a potential thought that someday I would be a candidate,” Graham told CJ. Asked whether those thoughts included a run for the governor’s mansion, he said: “Possibly.”

He added: “But this is not about me. This is about being fair with the public. It’s about the legislature doing the right thing.”

Graham says North Carolina Conservatives United is just a few weeks old. The Raleigh-based political consulting firm Fetzer Stephens issued the group’s news release Wednesday.

Graham says he hopes the petition drive will force state lawmakers to act.

“We’re heading down the road — no pun intended — to having the highest gas tax in the country, and it will happen to us very soon,” Graham predicted. “Someone’s got to say you’re taxing the people to death. It’s not okay, and enough is enough.

Carolina Journal Contributing Editor Michael Lowrey contributed to this report.