Columbia, SC (WLTX) Gov. Nikki Haley announced in her State of the State address Wednesday night her plan for fixing South Carolina roads. It's a three-part plan, all of which must pass for her to sign them into law, she told lawmakers.
First, the state's gas tax would go up by 10 cents a gallon over three years. Second, the state's income tax rate would be reduced from 7 percent to 5 percent over 10 years. And third, lawmakers would have to restructure the SCDOT so it's no longer governed by a commission appointed by districts, which she says encourages the different areas of the state to fight for their own needs instead of what's best for the entire state.
Gov. Haley says despite the gas tax increase, her plan would be one of the biggest tax cuts in state history because of the income tax reduction. "It will be a massive draw for jobs and investment to come to our state," she said in her speech. "And it will put more money in the pockets of every South Carolinian."
How much money? According to the state Board of Economic Advisors, the average taxpayer would save $689 a year from the income tax reduction, once it's fully implemented after 10 years.
But Democrats were immediately critical of the plan because they say it wouldn't bring in enough new money for roads while it would also cut funding for other important needs. Sen. Joel Lourie, D-Columbia, says, "I'm a little concerned that we may be robbing Paul and Peter to pay Patrick, okay? Because at the end of the day, if we cut the income tax by 30%, that's General Fund money that we're going to need to fund education, to fund teacher salaries, to fund health care."
The gas tax money goes straight to roads, while state income taxes go to the General Fund.
A 10-cents-per-gallon gas tax increase would bring in about $300 million more per year. The problem is that the SCDOT says it needs about $1.5 billion more each year to bring South Carolina roads and bridges up to good condition.
When asked whether the governor's plan would generate enough new money for roads to really help, Sen. Harvey Peeler, R-Gaffney, said, "Well, the question is how much is enough? But it's a good first start, and that's not the ending figure, I'm quite sure. The sum, hopefully, would be larger than that."
In her speech, Gov. Haley pointed out that South Carolina's current gas tax of 16.75 cents a gallon is third-lowest in the country, and that raising it by 10 cents a gallon would still keep it below the gas taxes in Georgia and North Carolina.
While Gov. Haley's plan is being criticized by Democrats who say it doesn't bring in enough new money, some taxpayers are upset that she's proposed a gas tax increase at all.
Monte Jones, an Orangeburg resident, said right after he pumped gas into his truck Thursday, "I think they burn us on gas enough. They need to leave it the way it is and give us a break from it. More tax is not going to suit the public very well, I don't think."
But the Charleston Metro Chamber of Commerce doesn't think the proposed gas tax increase is enough, releasing a statement Thursday saying, "While we believe that the recommended 10 cent motor fuel user fee increase in Governor Haley's three-point plan is inadequate to fix our significant and growing statewide infrastructure needs, we appreciate that Governor Haley has listened to the business community and taken a first step to bring this issue to the table."
Republicans in the state Senate and House say now that they have a plan to work with, they can get busy on the details, which are likely to change from what the governor has proposed.
