SC House budget leader proposes tax cut to pair with roads plan

House Ways and Means chairman Brian White filed a bill Thursday to cut income taxes for the average S.C. taxpayer by $48 a year.

The move, designed to appeal to Gov. Nikki Haley, comes as S.C. House members plan next week to start debating competing road-repair plans, including one pushed by Haley.

But the proposed tax cut may not be enough for Haley, who has said she wants to see a “massive” cut in exchange for raising gas taxes to pay for road repairs.

House members defended White’s smaller tax-cut proposal as affordable.

White, R-Anderson, said that if his tax-cut proposal can be married with a House committee’s roads bill, it could help pass the roads bill, sponsored by state Rep. Gary Simrill, R-York.

White’s proposal would adjust the state’s tax brackets over two years, resulting in a $51 million income tax cut for taxpayers.

White’s proposal would apply the state’s top-end 7 percent income tax on taxable income of more than $16,350 a year, once phased-in. Now, the 7 percent tax rate kicks in at $14,700.

The average taxpayer would get a $48 tax break under White’s proposal.

Haley has proposed cutting the state’s 7 percent tax rate by 2 percentage points. In exchange, she proposed a 10-cent-a-gallon increase to the state’s gas tax, adding she would veto any tax hike that was not offset by a “massive” tax cut.

Critics say they are concerned about the impact of Haley’s tax-cut proposal.

Haley says growth in the state’s economy will offset the revenue lost by the state. But critics say her plan would cut the state’s general fund revenues by $1.8 billion a year in 2025, forcing cuts to services, including education, public safety and mental health.

“There’s a way to go about doing (a tax cut) that you can ensure that you’re still going to be able to fund the state’s needs,” White said.

Simrill and White’s proposals both will be debated by separate House subcommittees next Tuesday.

Meanwhile, the state Senate is working on its own road-repair proposals.

State Sen. Ray Cleary, R-Georgetown, said he plans to put several proposals into one package to be considered by the Senate Finance Committee next week.

Cleary said those proposals include:

At a press conference Thursday, Haley said that Cleary’s plan includes “a whole lot of tax increases.”

“We will let everything fall to the wayside before we allow the people of South Carolina to see a tax increase,” she added.

Haley also wants the state Transportation Department reformed, giving the governor more control over the agency.

The Republican has said she could be OK with Simrill’s House proposal to have the governor appoint the Transportation Department’s eight-member commission, which would select a Transportation secretary. Seven of the commission’s eight members now are elected by legislative delegations.

Sen. Cleary said his roads plan also will include a similar restructuring proposal.

This story was originally published March 19, 2015 at 6:54 PM with the headline "SC House budget leader proposes tax cut to pair with roads plan."