COLUMBIA — Senate Majority Leader Harvey Peeler – saying there is “no way” S.C. lawmakers will raise the state’s gas tax – has proposed borrowing money and taxing out-of-state truckers to repair the state’s highways.
The Gaffney Republican’s bill, introduced Wednesday, is the latest attempt by a lawmaker to solve one of the state’s most vexing problems: How does the state spend more money on roads without raising one of the lowest gas tax rates in the country?
South Carolina has $48.3 billion in road-repair needs through 2033. But it only has $19 billion to pay for those repairs, leaving a $29 billion shortfall.
The state now relies on gas taxes to pay for road repairs. But with gas prices at historic highs, lawmakers have refused to debate raising the state’s 16-cents-a-gallon gas tax.
Instead, lawmakers from both parties have offered several proposals to spend more money on roads without raising taxes.
• Gov. Nikki Haley tried paying local governments to take over state-owned roads – an idea that lawmakers rejected – and proposed using a portion of the state’s revenue growth to repair bridges.
• House Speaker Bobby Harrell, R-Charleston, has proposed using 80 percent of the state sales taxes on cars for road repairs.
• Senate Minority Leader Nikki Setzler, D-Lexington, wants to borrow $500 million and distribute it to the state’s 46 counties to repair local roads.
Peeler’s bill borrows from those ideas and adds more proposals that he hopes will rally Democrats and Republicans. But even if Peeler’s bill passes, it only will add about $230 million in state money plus up to $500 million in loans to pay for road repairs.
“Granted, it’s a drop in the bucket, but it’s still a drop,” Peeler said. “It’s an empty bucket right now.”
Portions of Peeler’s bill quickly ran into opposition.
For instance, he wants to take state revenue generated from sales taxes on cars – about $103.5 million this year – and give half to the state Department of Transportation and half to the State Infrastructure Bank, which would use it to borrow money for major projects.
But doing that would cut the state’s education budget by $20 million a year, something Setzler, the Senate’s Democratic leader, said he would never support.
The bill also would classify ethanol – up to 10 percent of the gasoline you buy – as a motor vehicle fuel. Peeler says doing that would ensure the state collects all of the gas taxes it should.
But Michael Fields, executive director of the S.C. Petroleum Marketers Association, said his group would oppose that. “Straight ethanol is not a motor fuel. It’s blended with a percentage of gasoline,” Fields said.
Peeler’s bill also would tax out-of-state commercial truckers – a tax in-state truckers already pay.
“(Out-of-state truckers) won’t necessarily like it,” said Rick Todd, executive director of the S.C. Trucking Association. “(But) when you look at the fact that our fuel tax is so much lower than our sister states and most state tax, I think it’s palatable.”
Even with its problems, Setzler said Peeler’s bill encourages him that lawmakers will be able to come up with a compromise.
“There may be parts of Senator Peeler’s bill I differ with, but that doesn’t mean that we can’t work together and come to a good product,” Setzler said. “This is a vehicle to begin the conversation.”