SC Gov. McMaster not convinced gas-tax hike needed

Gov. Henry McMaster said Wednesday that he is not convinced a gas-tax hike is needed to repair South Carolina’s crumbling roads.

However, the new governor is certain the state needs to cut spending in some programs, which he did not name, to afford to spend in others.

South Carolina “is going to have to go on a diet as far as spending,” McMaster said Wednesday. “Now is not a time to be feasting over desserts.”

McMaster spoke to reporters Wednesday in his office. It was the second time the Richland Republican has taken questions since he was sworn in three weeks ago after Gov. Nikki Haley resigned to join the Trump Administration. The question-and-answer session lasted 21 minutes.

The state’s Republican-controlled Legislature is weighing raising the gas tax. McMaster has said previously that raising the tax – last raised almost 30 years ago – should be a last resort.

After Haley’s opposition to a gas-tax hike, legislators in the GOP-controlled General Assembly are watching fellow Republican McMaster closely, trying to determine what position he will take on the issue.

The House is expected to approve a gas-tax hike, having done so previously in 2015. However, a tax hike’s fate is uncertain in the state Senate, where opponents are expected to filibuster.

Instead of raising the gas tax, McMaster said Wednesday that he favors ensuring that existing gas-tax money goes to pay for roads, not Transportation Department employees, giving some roads to counties and exploring other ideas, including toll roads, as possible solutions to the state’s road problems.

McMaster’s positions on the issues facing the state could impact his political future. Signing off on a gas-tax increase could fuel a GOP primary opponent’s case against him.

McMaster already is campaigning for election in 2018, raising more than $160,000 only a day after he was sworn in.

And he already faces challengers in the 2018 GOP primary. In the past, those low-turnout contests have been dominated by party activists who have been unforgiving to politicians who break with their hard-right ideals, including opposition to tax hikes.

McMaster cannot assume he will win a GOP primary contest.

While long a leader in the state's Republican establishment, McMaster finished third in the 2010 GOP primary for governor, trailing little-known Lexington state Rep. Nikki Haley and then-U.S. Rep. Gresham Barrett. Haley beat Barrett in a primary runoff to win the nomination.

No time for ‘feasting over desserts’

McMaster’s roads ideas are not new.

Local governments have opposed taking over roads from the state, saying they don’t have the money to repair and maintain them either.

And, McMaster acknowledged, toll roads have had mixed results.

A Greenville toll road, for instance, failed to attract the projected traffic and fell into bankruptcy.

McMaster also said that, eventually, employees of the state Transportation Department should be paid out of the state’s roughly $8 billion-a-year general fund.

If that happened, the gas-tax money now spent on their salaries could go to roads. However, paying Transportation Department staffers from the general fund would force cuts in other state spending now paid for from that budget.

The Department of Transportation, which says it needs an added $1 billion a year to repair and maintain the state’s roads, spends roughly $300 million a year on its roughly 5,000 employees, using a mix of state and federal dollars.

McMaster did not say what state programs he would cut to free up general fund money to pay the state’s portion — roughly $140 million — of that $300 million.

Instead, McMaster, who has held statewide elected office for a decade, called for a “serious analysis of things that are not critical at this point.”

Noting the need to have money for roads and education, and predicting “hard decisions” on the state’s underfunded pension system, McMaster said, “Now is not a time to be feasting over desserts.”

‘The hard question’

Asked where he proposes cutting state spending, when Cabinet directors that report directly to the governor have said they are having difficulty recruiting and retaining workers because they are paid so low, McMaster said, “That’s the hard question.”

“That is the subject of great analysis and interest to a lot of folks, but it's clear that there are some things that are more important than others.”

He continued: “We’re just going to have to make those tough decisions. But if we don’t, we’re not going to have the money to do the things that are required.”

McMaster said the state’s underfunded pension system is a priority.

The state “cannot break faith” with state employees who are paying into the pension system but likely will need a new retirement system for new employees, he added.

McMaster said he is not now at the point of threatening vetoes of spending on programs that he sees as extraneous.

Asked whether he has come up with a list of unnecessary state spending, he said he wants to get farther along in the budget process and have more discussions with legislators.

McMaster also fielded questions about legislative proposals to borrow money to pay for maintenance and construction projects at the state’s public universities and K-12 schools.

The governor did not take a stance on either topic, saying the state faces tough decisions.

“Nothing’s free. There’s no such thing as free money.”

This story was originally published February 15, 2017 at 2:41 PM with the headline "SC Gov. McMaster not convinced gas-tax hike needed."