Cindi Ross Scoppe

Why lawmakers should override McMaster’s gas tax veto

Expect SC Gov Henry McMaster to veto the gas tax bill quickly, if he hasn’t already done so by now.
Expect SC Gov Henry McMaster to veto the gas tax bill quickly, if he hasn’t already done so by now.

IT’S NOT THE ugliest baby legislative negotiators have ever birthed. But between the piecemeal changes that further jumble a jumbled mess of a tax code and the theft of revenue from the rest of state government and the good reforms that got discarded, it’s mighty hard to look at.

Beauty, though, is elusive, and fleeting, and the unattractive roads bill that the Legislature passed on Tuesday is better than the status quo. Marginally so, but enough better that legislators should override Gov. Henry McMaster’s veto. ((UPDATE: The House overwhelmingly overrode the veto this morning. The Senate is expected to vote later today.))

All most people care about is that it will generate $633 million a year to fix our crumbling roads and bridges, mostly through a higher gas tax. But there’s a lot more to the legislation than the bottom line, and what makes it both hard to swallow and ultimately acceptable is how that money is raised, the cost of getting the votes to pass the bill and how the Transportation Department is governed.

The thing that tips the bill over the “worth passing” line is that it lets the governor remove the people he appoints to the Transportation Commission for any reason or no reason.

This is crucial because commissioners who work for the governor are likely to focus on the entire state rather than parochial interests, and if your boss can’t fire you, he’s not your boss. What legislators insultingly called “reform” in last year’s law allowed legislators to prevent the governor from removing his own appointees.

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Cindi Ross Scoppe

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That faux reform also allowed small groups of legislators to secretly torpedo his nominees by simply refusing to take a vote for 30 days. That provision will remain if this year’s bill becomes law.

Still, the governor would be able to appoint the commissioners he wants — particularly if he’s willing to call out any legislators who use the secret torpedo — and now he would be able to remove them. So this bill truly puts the Transportation Department under the control of the governor for the first time in more than 80 years.

That reform covers a multitude of sins. Good thing, too: This bill contains a multitude of sins.

That’s a reform that covers a multitude of sins.

Good thing, too: This bill contains a multitude of sins.

First, it steals money from everything else the state government does in order to pay for tax credits and cuts that some Republican senators demanded in return for raising taxes. At least the House bargained down the theft, from a projected $160 million a year (and potentially much more) to $111 million.

It also raises and reduces taxes in a piecemeal way rather than as part of a smart, coherent overhaul of our special-interest-driven tax code — often even ignoring better ways to design those cuts and increases.

For instance, it raises the per-gallon gas tax rather than just charging the sales tax on gasoline, which would have allowed tax revenue to grow with inflation rather than remaining static. (The Senate added an inflation factor to the gas tax, but House negotiators rejected that idea, worried that it would generate too much money. Seriously.)

While some of the tax credits at least fulfill legitimate policy goals, the big one — a convoluted vehicle-safety rebate tied to gasoline consumption — was pulled out of thin air to provide a fig leaf for tax opponents.

It returns our state to the principle, abandoned four years go, that those who use our roads should pay for our roads, roughly in proportion to their use.

And then there’s the change to the sorest sore thumb in our tax code: raising from $300 to $500 the cap on the sales tax for cars, boats, motor homes, planes and other vehicles. The $300 cap means someone who buys a $6,000 car pays the equivalent of a 5 percent sales tax, while someone who buys a $56,000 car pays a tax that is just 0.54 percent of the purchase price. With a $500 cap, people will pay the full 5 percent on cars that cost up to $10,000 — but someone buying a $56,000 car would still pay just 0.89 percent. Lawmakers could have raised the same amount of money by exempting the first $10,000 of a vehicle’s value and taxing the rest, even at something less than 5 percent. And they should have.

But for all the flaws in the details of the tax changes, the larger policy changes are entirely sound: The bill returns our state to the principle, abandoned four years ago, that those who use our roads should pay for our roads, roughly in proportion to their use.

A small change in that direction is charging owners of hybrid and electric vehicles a fee that’s about the same as the additional gas taxes they won’t be paying — a smart acknowledgment that what deteriorates our roads isn’t the gas that powers a car but the car itself.

The big change is ending our bad new habit of requiring South Carolinians alone to pay the increased costs of caring for our roads — which is what we have done by stealing money from the state’s general fund to cover repairs. There’s a new fee for out-of-state truckers, and then, of course, there’s the gas tax.

Economists say about a third of the gas tax is paid by out-of-state drivers. So the higher gas tax will put an end to their free, if rough, ride.

Ms. Scoppe writes editorials and columns for The State. Reach her at cscoppe@thestate.com or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.

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