This past weekend I went to the beach. I was at the southern tip of North Carolina, so the closest town of any size was over the border in South Carolina, and that was where we went for lunch on Saturday. It’s a quick little drive, not even ten miles, but something remarkable happened the minute we crossed the border. I started seeing gas station signs with prices under $3/gallon. Yes, that’s right, I saw gas for as little as $2.95.
This happens every time I go to South Carolina — or Virginia, for that matter. I cross the border and I’m reminded again of just how high North Carolina’s gas taxes are. Last month, the Tax Foundation published this map with up-to-date numbers about states’ gas tax levels.
You’ll notice that North Carolina is orange, unlike all the green states around us. North Carolina’s gas tax is the 8th highest in the nation at 37.8¢ per gallon, as opposed to just 16.8¢ per gallon in South Carolina. And that’s why, when I crossed the border, the price immediately dropped by about 20¢.
Gas taxes are particularly significant because they affect the price of everything else. It’s not just how much I pay to fill up my car, but it’s also how much businesses have to pay to transport goods to market. If it’s more expensive to move apples from western North Carolina, where they grow, to Raleigh, where I live, then I’ll end up paying more for those apples. Of course, that means I’ll have less money to spend on everything else, so it’ll hurt some other producer who wants to sell me movie tickets or dinner at a restaurant or a new pair of shoes. Or maybe it’ll actually make more sense for someone to just ship apples in from another state altogether, which means less business and fewer jobs for those apple growers in the western part of the state.
If we want to stimulate the state’s economy, lowering our gas taxes to levels closer to those of neighboring states would be a good first step. There’s no reason that North Carolina businesses should have to deal with that disadvantage relative to businesses in South Carolina or Virginia. And there’s no reason that North Carolina’s consumers should be burdened with that extra cost, either.
