A proposal to increase the S.C. gas tax – the second-lowest in the nation – was introduced by S.C. House Republican leaders Wednesday.
The plan would raise the 16.75-cent-a-gallon gas tax by 10 cents over five years, increasing it by 2 cents a year. When fully phased-in, the increases proposed by House leaders would raise about $600 million a year to repair the state’s crumbling roads and bridges.
The Department of Transportation has estimated it needs nearly $1 billion a year in added money to make S.C. roads safer.
The bill is co-sponsored by House Speaker Jay Lucas, R-Darlington; House budget chairman Brian White, R-Anderson; and House Majority Leader Gary Simrill, R-York. One Democrat – state Rep. Jimmy Bales, D-Richland – is also a co-sponsor.
The proposal includes:
▪ Increasing the sales tax cap on vehicle sales to $500 from $300.
▪ Enacting a $60 fee for hybrid vehicles and a $120 fee for electric vehicles. Both fees, for vehicles that use less gas but still use S.C. roads, would be paid every two years.
▪ Requiring motorists who move to South Carolina and register their vehicles in the Palmetto State to pay a $250 fee
The prospect of raising taxes is politically explosive in heavily Republican South Carolina, where a basic GOP political tenet is “no new taxes.”
The House leaders’ statement reflected that concern, calling the higher gas taxes “motor fuel user fees.” The statement also stressed nonresidents, driving through the state, and drivers of alternative-fuel vehicles would contribute, relieving pressure on the state’s general fund, made up largely of sales and income taxes.
“For far too long, South Carolina’s taxpayers have been the ones to solely foot the bill to repair our crumbling infrastructure,” Lucas said in a statement. “Today’s legislation removes that burden and appropriately places it on every motorist who drives on South Carolina interstates and highways.”
It is not clear if soon-to-be Gov. Henry McMaster will endorse or veto an increase to the gas tax. McMaster has stayed silent on the issue. “I’ll address those points at a later date,” McMaster said Wednesday.
However, S.C. lawmakers anticipate the 69-year-old S.C. political veteran will be easier to work with than outgoing Gov. Nikki Haley.
Haley, who is expected to be confirmed as U.S. ambassador to the United Nations and resign as S.C. governor, drew a hard line on raising taxes to pay for road repairs.
Shortly after winning re-election, Haley unveiled a proposal to increase the gas tax by 10 cents a gallon but demanded that plan be paired with an even larger cut in state income taxes.
Critics said that proposal eventually would cost state agencies $1.8 billion – money needed to pay for S.C. schools and law enforcement.
In the state Senate, Sean Bennett, R-Dorchester, has introduced a proposal similar to the House plan.
Bennett’s proposal would increase the state’s gas tax by 12 cents a gallon, phasing the increase in over three years and adjusting the tax for inflation. Bennett also proposes other increases in driving fees, and cuts to the state’s income and business property taxes.
The House plan does not include any tax cuts.
In 2015, the House voted 87-20 to approve a gas-tax hike. That plan died last year – an election year – in the state Senate amid pressure from political groups.
Instead, lawmakers approved borrowing money to pay for roughly $4 billion in road-repair projects. That includes spending roughly $1.5 billion to fix Malfunction Junction in Richland and Lexington counties.
Still, lawmakers acknowledged that borrowing proposal was not a long-term fix and vowed to pass one this year.
“This plan allows for safety improvements, job creation and improved roads,” GOP Majority Leader Simrill said Wednesday.