The Buzz

4th roads plan would cut SC income taxes by $700 million

tdominick@thestate.com

Trying to end a stalemate, a group of S.C. Senate Republicans Thursday introduced the fourth major road-repair plan this year, less than month before lawmakers are scheduled to go home.

The plan would raise $800 million a year for roads, roughly half the amount of added money that the S.C. Department of Transportation has estimated it needs to repair, maintain and expand the state’s transportation system.

It also would cut state income taxes by $700 million and give control of the Transportation Department to the governor.

Senate Majority Leader Harvey Peeler, R-Cherokee, said he had shared the plan Wednesday with Republican Gov. Nikki Haley, who threatened to veto previous road-repair proposals.

The governor’s office is looking at the plan’s details, said spokeswoman Chaney Adams, adding the governor “will weigh in when she thinks it’s constructive to do so.”

In January, Haley proposed a 10-cent-a-gallon gas tax hike, giving the governor control of the Transportation Department and cutting the state’s income tax by 2 percentage points.

Like a Senate Finance Committee plan, the Senate GOP plan would:

▪  Increase the state gas tax by 12 cents a gallon over three years

▪  Increase fees for 10-year driver’s licenses to $50 from $25

▪  Levy a $60 fee on hybrid vehicles every two years and a $120 fee on electric vehicles

▪  Increase the cap on the state’s sales tax on vehicles to $600 from $300

Unlike the Senate Finance plan, the GOP plan also would cut taxes and give the governor the Transportation Department.

The plan would cut the state’s income tax rates by 1 percentage point over five years. For example, the top-end rate would be cut to 6 percent from 7 percent.

That’s half the cut that Haley sought. However, her proposal was panned roundly as cutting into the state’s general fund revenues — threatening state funding of schools, law enforcement and health care — to give the richest South Carolinians a $100,000-a-year tax cut.

When fully implemented, the Senate GOP income-tax cut would save South Carolinians nearly $709 million a year, said Sen. Sean Bennett, R-Dorchester. He added the tax cut could be paid for with only part of the projected growth in state revenues.

“Therefore, money will not be raided from the general fund,” Bennett said. “There will still be money there in an increasing amount ... to take care of public safety, education and all other core functions of government.”

If state revenues do not increase as projected, the tax cut and increased roads money would be scaled back, he said.

The new plan also includes changing control of the Department of Transportation, which Gov. Haley and some lawmakers say must happen to make sure new roads money is spent correctly.

The proposal calls for the governor to appoint all members of the commission that oversees the Transportation Department, similar to the S.C. House’s roads plan. The commission then would hire a secretary of transportation.

Senate Democrats panned the GOP plan.

“This is, simply put, a recycled version of a roads plan we heard in the State of the State address” from Haley, said Senate Minority Leader Nikki Setzler, D-Lexington, adding, “I am happy they have decided to join us for a discussion on roads with just 12 (working) days left in this legislative session.”

House Speaker Jay Lucas, R-Darlington, was slightly more generous.

“With 12 legislative days remaining, I am appreciative that a group in the Senate has finally begun to follow in our footsteps ...” Lucas said. “This issue is extremely difficult and requires significant consensus building. The House’s hard work must not be underestimated or underappreciated.”

Road repair has been perhaps the major issue of the legislative session.

The first official road-repair plan was released in January by Haley.

Shortly afterward, the House released its plan — to increase the gas tax by the equivalent of 10 cents and the sales tax cap on vehicles to $500. In an attempt to placate Haley, who insisted on a tax cut, that plan later was amended to save the average S.C. taxpayer $48 a year on their income taxes.

The S.C. House passed its plan 87-20 in April.

Reach Cope at (803) 771-8657.

Roads plans

Republican state senators unveiled a fourth road-repair plan. A look at the four plans:

Gov. Nikki Haley’s plan

Money for roads: An average of $353 million a year

Tax hikes: Increase the state gas tax by 10 cents a gallon

Tax cuts: Reduce the state income tax by 2 percentage points – from 7 percent to 5 percent – over 10 years

Status: While introduced in the House, the plan went nowhere

S.C. House plan

Money for roads: Roughly $427 million a year

Tax hikes: Increase the gas tax by the equivalent of 10 cents a gallon, increase the maximum state sales tax on vehicles to $500 from $300

Tax cuts: Adjust the state’s income tax brackets, saving the average taxpayer $48 a year

Status: Passed by the House 87-20 in April

Senate Finance Committee plan

Money raised for roads: Roughly $800 million a year

Tax hikes: Increase the gas tax by 12 cents a gallon over three years; increase fees for 10-year driver’s licenses to $50 from $25; levy a $60 fee on hybrid vehicles every two years and a $120 fee on electric vehicles; increase the cap on the state’s sales tax on vehicles to $600 from $300; increase vehicle-registration fees, paid every two years, to $40 from $24 for residents under 65 years old

Tax cuts: None

Status: While passed by the GOP-controlled Finance Committee, Senate members last week refused to guarantee they would debate the proposal this year

Republican senators’ plan

Money raised for roads: Same as Senate Finance Committee plan

Tax hikes: Same as Senate Finance Committee plan

Tax cuts: Reduce the income tax rate by 1 percentage point over five years

Status: Could be substituted for the Senate Finance plan if Tea Party-libertarian senators permit a vote

  Comments