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House Roads Bill Advances, Gov. McMaster Weighs In on Proposed Gas Tax Increase

February 10, 2017 - Posted in This Week in South Carolina by Gavin Jackson

The approval of a key House committee and comments by the state’s new governor made for key developments in the roads funding debate this week.

On Thursday, the House Ways and Means Committee sent a bill raising the state gas tax by 10 cents per gallon and increases to other vehicle-related fees and taxes. The plan generates $570 million in additional annual revenue to fix the state’s roads—half of which have pavement in poor condition.

Many committee members who represent predominantly rural districts raised concerns about equitable road improvement funding for their areas.

“What I’m concerned about is that we concentrate on rural roads, we repair them now, but then attention is taken away from it, as there is more concentration in the urban areas,” Rep. Murrell Smith, R-Sumter, said. 

Rep. Gary Simrill, R-Rock Hill, said the initial $50 million raised by the gas tax increase will remain dedicated to the DOT’s new rural road safety program. DOT Secretary Christy Hall told SCETV’s This Week in South Carolina host Charles Bierbauer that the program would focus on  2,000 miles of roads that are the “worst of the worst.”

“Our major connecting routes that connect communities together...communities have become very dangerous in our state,” Hall said. 

The program would focus on making important, potentially, lifesaving improvements with rumble strips, paint, signs and shoulder work on the roads.

“Our number one priority is going to be safety and then our second one is going to be the pavements and improving those,” Hall said on the show. “The next thing we would want to look at is the movement of freight across our state and invest in some widening programs to help facilitate our continued growing economy in this state."

While the bill has broad, bipartisan support, Gov. Henry McMaster didn’t say whether he would support the plan. He told reporters Wednesday that a gas tax increase should only be a last resort.

“We must examine all sources, all facts, and make a decision as to the best way to improve the roads, but raising taxes is the absolute last resort,” McMaster said.

A tax cut and reform to the DOT was the only way McMaster’s predecessor, Gov. Nikki Haley, would approve any gas tax increase. But the House bill has no tax relief and was amended Thursday to slightly change how members of the DOT’s governing commission are elected.

A Senate bill, sponsored by Sen. Sean Bennett, R-Charleston, does include tax relief and gradually increases the current 17 cent per gallon gas tax by 12 cents.

Senate Democrats, who like their House counterparts are in the minority, introduced their own plan Wednesday that would raise the gas tax by eight cents a gallon and generate around $400 million in additional dollars a year.

"We think right now with the level of confidence we have in the Department of Transportation that they can really only handle an increase in this amount,” Sheheen said. "If we need to revisit that, Democrats are practical and pragmatic—we would."

 

Current House bill to raise $570 million annually:

- Increase the gas tax 2 cents a year for the next 5 years. The first two cents will go toward the S.C. Department of Transportation’s rural road safety program. 

- $16 increase for biennial motor vehicle registration fee.

- $60 fee for hybrid vehicle and $120 fee for electric vehicles, levied biennially. 

- 5 percent fee with a $500 cap for vehicles bought in-state.

- $250 cap for vehicles purchased in other states and registered in South Carolina.

- Motor carrier road-use fee for out-of-state motor carriers.

 

Senate Democrats’ bill to raise $400 million annually:

-Increase gas tax by 2 cents a year for 4 years for a total of 8 cents.

-Increase biennial vehicle registration fees by $16 for taxpayers under 65 and by $8 for taxpayers 65 and older.  

-Cap sales tax on vehicles for those with a purchase price of $30,000 or above to $500. Maintain the current sales tax cap of $300 for vehicles with a purchase price below $30,000.

-$50 fee for alternative fuel/hybrid vehicles. 

-Establish new road-use fee on commercial vehicles used for carrying property, exempting farm vehicles, and defining commercial into “large” commercial and “small” commercial.  

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