The Buzz

July 22, 2014

Sheheen: $500 million for roads, no gas tax hike

To the disappointment of business groups, raising the gas tax is not part of state Sen. Vincent Sheheen’s plan for meeting the state’s multi-billion-dollar road needs, released Tuesday by the Democratic candidate for governor. Instead, Sheheen said if elected, he wants to commit $500 million a year in added state money for road repairs. Most of that money — about $350 million — would come from phasing-in a commitment to spend 5 percent of the state’s general fund revenues, now $7 billion a year, to fix S.C. roads.

The Buzz

A blog from The State's political team of Cassie Cope, Jamie Self and Andy Shain. Email tips to thebuzz@thestate.com.

To the disappointment of business groups, raising the gas tax is not part of state Sen. Vincent Sheheen’s plan for meeting the state’s multibillion-dollar road needs, released Tuesday by the Democratic candidate for governor.

Instead, Sheheen said if elected, he wants to commit $500 million a year in added state money for road repairs. Most of that money – about $350 million – would come from phasing-in a commitment to spend 5 percent of the state’s general fund revenues, now $7 billion a year, to fix S.C. roads.

The rest would come from borrowing money and finding new money for roads. For example, Sheheen suggests charging tolls to pay for improvements along worn corridors, including Interstate 95.

Business alliances, whose members depend on the state’s highway system and say they are ready to pay a higher gas tax to help fix the state’s roads and bridges, said Sheheen’s plan is a good start but does not go far enough.

“I applaud (Sheheen) for trying to come up with something that’s concrete, but unfortunately, they all want to stay away politically from increasing the motor fuel user fee, which is the quickest and fairest way to address the problem,” said Bill Ross, executive director of the S.C. Alliance to Fix Our Roads, referring to Sheheen and his Republican opponent in November, Gov. Nikki Haley.

Haley, who has said she would veto any increase in the gas tax, has said she would share her vision for addressing the state’s transportation infrastructure needs in January, assuming she is re-elected.

Haley’s time frame has drawn criticism from some Republicans who support raising the gas tax. This month, for example, state Sen. Ray Cleary, R-Georgetown, said November is too long to wait to hear the governor’s roads plan.

However, Sheheen said the state must diminish its dependence on the gas tax, which only will drop as vehicles become more fuel efficient. The state needs more than one major source for road money, he said. “The reason we’re in the hole on road funding now is we’re overly reliant on the gas tax.”

Sheheen said his plan would create a substantial, dedicated funding source for roads. He also said he would:

•  Push to borrow up to $1 billion to spend on road repairs
•  Push to fix deteriorating roads before building new ones
•  Consolidate the transportation boards that decide how to spend road money

Asked what he would cut to pay for his multimillion-dollar spending plan, Sheheen said that cuts might not be necessary since the roads fund would draw from increases in revenue that flow into the state most years.

‘Need principled long-term solutions’

Petition candidate for governor Tom Ervin, who supports increasing the gas tax, criticized both Sheheen and Haley on Tuesday, saying their plans depend on money that might never materialize. Also running are Libertarian Steve French and United Citizens candidate Morgan Bruce Reeves.

“We need principled long-term solutions when it comes to fixing critical infrastructure,” Ervin said in a statement, “not political speak about set-asides or the ‘money tree’ from these two career politicians.”

The objection to raising the gas tax stems, in part, from “tax pledges and the far right not wanting to pass a tax increase in South Carolina,” said S.C. Chamber of Commerce executive director Otis Rawl, whose group supports raising the gas tax. “But in the business community, we’ve got to get our goods to market.”

The state’s 16-cent-a-gallon gas tax, the lowest in the Southeast, brings in about $500 million a year for roads. It has not been raised in 26 years.

Raising the gas tax an additional 10 cents a gallon could generate another $200 million a year for roads, Rawl said. Combined with Sheheen’s plan to commit general fund dollars, the two ideas could go a long way toward meeting the state’s annual road funding needs.

Rawl estimated those needs to be an additional $600 million a year, well below the $1.5 billion a year the S.C. Department of Transportation estimated is needed over the next 20 years to get the state’s roads in “good condition.”

Election season issue

Sheheen’s proposal to commit surplus money and borrow to pay for roads is similar to a plan that lawmakers approved in 2013.

That plan included spending $50 million a year to borrow up to $500 million for the state’s interstates and bridges, directing $41 million a year from the state sales tax on motor vehicles to pay for secondary roads not eligible for federal funding, and committing $50 million in one-time surplus money for bridge replacement and rehabilitation.

This year, the Legislature did not commit any extra money for roads.

Haley’s campaign Tuesday said Sheheen’s plan is the same as the governor’s.

“Although Vince Sheheen has previously said his roads plan included tax and fee increases, we are pleased to see that as Election Day draws nearer, he has decided to copy the governor’s plan – and spend money the Legislature already has,” said Chaney Adams, a Haley spokesman.

Haley has not released details of how she plans to pay for road improvements, pledging in January to offer a plan that would not require raising taxes and would meet the state’s needs.

However, Haley has advocated spending extra state income – revenue that usually materializes in May, near the end of the state’s annual budgeting process – on road projects.

Recently, that extra money, which Haley has called “the money tree,” has amounted to about $100 million a year.

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