News: CJ Exclusives

Republican Leader Questions Gas Tax Payment

Air Quality Division sent $50,000 in gas tax funds to out-of-state nonprofit

State Senate Minority Leader Phil Berger, R-Rockingham, isn’t keen on using North Carolina gasoline tax revenue to join the Climate Registry, a California-based nonprofit that seeks to fight global warming.

Berger recently criticized the use of gas tax funds for expenditures unrelated to transportation, including two payments made by the N.C. Division of Air Quality to the registry.

“We’ve talked for years about the transfer from the highway trust fund of the $170 million, plus the additional [money] that Easley and the Democrats approved over the last 10 years or so,” Berger said in a telephone interview with Carolina Journal. “There has not been a lot of discussion about the other transfers of those dollars, and this is just another example.”

DAQ authorized two contributions of $50,000 to the registry in 2007 and 2008. Half of the funds were drawn from DAQ’s share of the state gas tax (4/32 of a cent for each gallon sold), the other half from an Environmental Protection Agency grant to the Department of Environment and Natural Resources, of which DAQ is a part.

The registry is a national nonprofit that seeks to convince companies, organizations, and state and local governments to report their greenhouse gas emissions in hopes of reducing climate change. In addition to providing financial support, DAQ helped recruit companies, organizations, local governments, and other entities to join the registry and report their emissions.

According to statutory law, funds from the Water and Air Quality Account (from which DAQ’s share of the gas tax is drawn) are budgeted for air quality programs. The EPA grant is designed to support DENR’s “ongoing program to protect air quality so that it achieves established ambient air standards and protects human health.”

Former DAQ deputy director Brock Nicholson, who served on the Climate Registry’s board of directors and executive committee, said the funds paid by DAQ were temporary.

“Those were up-front fees to help seed the registry. We don’t anticipate that will ever be paid again,” he said.

Nicholson said North Carolina is benefiting from its partnership with the registry. “This is the foundational work for a program to identify emissions, and then therefore emissions reductions projects that [have] monetary value to our sources in North Carolina,” he said.

North Carolina has the 14th highest combined local, state, and federal gas tax in the United States at 49.5 cents per gallon, according to data from the American Petroleum Institute. In the Southeast, the Tar Heel State has the third-highest tax rate behind Florida and West Virginia.

One of the reasons for North Carolina’s transportation problems is because of lawmakers “siphoning off” gas tax funds, Berger said.

“I’m not saying that we shouldn’t be spending money on the Climate Registry,” he said. “What I’m saying is that, in terms of where the dollars are coming from and what people think that they’re paying taxes for, it certainly is not [appropriate] for the state of North Carolina to pay dues or to join a climate registry.”

David N. Bass is an associate editor of Carolina Journal.