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The gas tax, currently at 29.9 cents a gallon, is under fire from those who want legislators to cap it, and polls show that voters don't want it to go any higher.
In January, the gas tax increased by 2.8 cents a gallon, the biggest jump in 20 years. Gov. Mike Easley and the state Senate have proposed spending plans recently to cap the tax at the current level, in part to prevent it from increasing next year.
"We have probably the biggest challenge and the biggest problem facing our legislature in the next few years: how to fix our highways," said state Sen. David Hoyle, D-Gaston, a former member of the N.C. Board of Transportation.
Legislators don't want money just for highways - they also want it for bus service, airport improvements and rail. Charlotte is building the first leg of a light-rail system, and some leaders in the Triangle and the Triad want to start similar projects.
State government has planned to spend $2.5 billion on transportation this year, with the federal government contributing an additional $856 million to the state.
He disputes that there is a crisis in how the state pays for roads. Rather than finding new sources of money, he said that legislators should end the annual transfer of money from the Highway Trust Fund to the state's General Fund.
In 1989, state legislators and Gov. Jim Martin, a Republican, raised the state gasoline tax and created the Highway Trust Fund, which was designed as the first state fund dedicated to road construction.
The transfer from the trust fund has occurred every year. It's intended to make up for money that, until 1989, had gone to the General Fund, and this year the transfer was $253 million. Legislators have voted to reduce the transfer by $80 million next year while leaving most of it in place to pay for education, health-care and other services.
"I just don't think that we would be in the situation we're in if they had kept their hands out of the cookie jar," Graham said.
"They (state officials) build roads to nowhere, and they leave the roads that are already congested even more congested," Coletti said.
Subsidizing ethanol guzzles consumers' gas and money
It has been more than 30 years since President Richard Nixon established a long-range goal of achieving energy independence, and yet oil imports keep increasing. As a result, many environmentalists and politicians are now suggesting that it is time for the United States to speed the deployment of ethanol and other biofuels as a "cheap" alternative to gasoline.
Lugar and other lawmakers have introduced legislation to boost federal loan guarantees for the wider use of E-85, a blend of 15 percent gasoline and 85 percent ethanol, and also require filling stations to sell this product.
But mandating and subsidizing the use of ethanol clearly doesn't make economic sense because the costs of producing ethanol are greater than the benefits.
In Michigan, there are almost a dozen bills being considered in Lansing that would provide tax breaks and grants for producers, sellers and users of ethanol and biofuels.
Consider how ethanol is made. Corn is grown, harvested and then winds up at an ethanol plant. There the corn is ground up, mixed with water and then fermented. Finally, a mixture that is only about 8 percent ethanol must be distilled again and again until it eventually becomes almost pure ethanol.
Unfortunately, growing and harvesting the corn, and heating and reheating the fermented corn to produce ethanol require a vast amount of energy. Ironically, most of this energy to produce ethanol comes from fossil fuels.
If you account for all the steps to produce ethanol -- oil to run tractors, natural gas to heat the fermented corn, and fuel to transport the ethanol by truck or railroad to refineries -- it takes 29 percent more fossil fuel energy to make ethanol from corn than the fuel produced, according to a recent study at Cornell University and the University of California-Berkeley.
Ethanol fails miserably in a simple cost-benefit test of energy efficiency, because there is actually a net energy loss in ethanol production from seed to fuel.
Without the enormous government subsidies for the production of ethanol, the corn-based fuel could not survive in the free market.
The current federal subsidy is 54 cents per gallon of ethanol, which is an estimated 30 to 45 percent of its production cost. And 14 states, mainly in the Midwest Corn Belt, provide their own subsidies for ethanol production in addition to the federal subsidy.
All of this adds up to billions of tax dollars annually that go to corn farmers and ethanol producers to artificially prop up a product that fails the market test.
The inevitable economic consequences of capping the use of oil in favor of ethanol would increase energy costs in other ways. Most importantly, because ethanol's fuel performance is so much worse than gasoline, there is a significant decline in fuel performance, adding to fuel costs for motorists who might be forced to use increased amounts of ethanol.
source: The Detroit News