South Carolina’s business leaders say legislators must pass a bill in the coming weeks that raises at least $600 million additional yearly for road and bridge work.
With just 24 days left in the legislative session, the South Carolina Chamber of Commerce and Manufacturers Alliance sent legislators a letter urging action. While the groups lay out a broad, five-point plan, they’re not picky on the specifics. What’s unacceptable is for the session to adjourn without a deal, said Ted Pitts, the chamber’s president and CEO.
“It’s way past the critical point. We need them to start moving now,” Lewis Gossett, the alliance’s president and CEO, said Monday via cellphone, as he dodged a huge pothole on Interstate 26.
The Department of Transportation has said it needs $1.5 billion more annually over 20 years to bring roads to good condition. The business groups are seeking at least $600 million through diversified sources – noting that as vehicles’ fuel efficiency increases, gas taxes will bring in less revenue.
Deplorable road conditions affect the state’s image and ability to attract business, said Jack Sanders, president of Hartsville-based Sonoco, which has some 200 trucks on South Carolina’s roads at any given time. The company says it spends millions yearly on truck repairs and lost time for detours around unsafe bridges.
Like other business executives, Sanders said road conditions are part of any discussion on whether to expand in South Carolina.
“We are one of the fastest-growing states. If we’re going to continue that wonderful growth, somehow, some way, we have to widen our roads and repair our roads,” said Brian Newman, president of Honda of South Carolina, who worries about parts getting damaged on rough roads before arriving at his Timmonsville plant.
Progress could occur this week.
The House is expected to debate a bill Wednesday that would generate $400 million annually for roadwork. It also cuts most taxpayers’ income taxes by $48 yearly. A bill up for debate in the Senate would generate roughly $800 million annually for roadwork but doesn’t address income taxes.
The House’s income tax provision is an attempt to escape Gov. Nikki Haley’s veto pen. But the threat looms, regardless.
Haley had repeatedly promised to veto any increase in the gas tax, which has been 16 cents per gallon since 1987. In January, she offered to sign a 10-cent increase, but only if it’s accompanied by deep cuts to personal income taxes. Her plan would eventually cut general fund revenue by $1.8 billion annually. But legislators of both parties balked, arguing that could necessitate deep budget cuts in education, health care and other services.
“What we need is money for roads,” said Rep. Gary Simrill, R-Rock Hill, chairman of the House panel that’s worked on a plan since last fall. “A roads bill is not the place to cover comprehensive tax reform.”
The plan up for debate in the House would instead cut revenue by $51 million annually – an amount Simrill called sustainable. The savings to taxpayers roughly corresponds to the extra amount South Carolina drivers would pay in gas taxes, he said.
“It gives relief to South Carolinians who pay more at the pump,” Simrill said, noting that out-of-state drivers pay about one-third of gas taxes.
Business executives in South Carolina don’t care about the political wrangling; they just want a solution, Pitts said, pointing to legislative action in South Carolina’s neighboring states.
Earlier this month, the Georgia Legislature approved a road-funding bill expected to raise an additional $900 million annually through changes to the state’s fuel taxes – 26 cents per gallon for gas and 29 cents for diesel – and new fees on electric cars and hotel visits. In North Carolina, Gov. Pat McCrory has signed a bill preventing that state’s gas tax from falling below 30 cents per gallon due to falling gas prices. Because of the law, it will instead incrementally fall to 34 cents by July 2016.