The S.C. Senate approved a compromise plan Monday to raise the state’s gas tax by 12 cents a gallon and hike other driving fees to pay to repair the state’s crumbling roads.
The Senate voted 32-12 to approve the plan, a majority that can withstand a promised veto by Gov. Henry McMaster, R-Richland.
“It should be a real, meaningful difference in the lives of South Carolina drivers over the next 10 years,” said state Sen. Vincent Sheheen, D-Kershaw, a member of the panel that drafted the final proposal.
That plan has one more hurdle – the approval of the full S.C. House on Tuesday – before speeding toward McMaster’s veto pen. The House earlier this year approved increasing the gas tax by a supermajority vote, 97-18.
McMaster faces a GOP primary in 2018, where support of a gas-tax increase could hurt his election bid. Asked how much time it will take him to veto the bill when it reaches his desk, the governor said Monday: “Not long.”
If the House passes the proposal Tuesday and the bill is sent to McMaster, who immediately issues his veto, the Legislature could override that veto as soon as by week's end.
The compromise proposal, passed Monday by the Senate, would raise the state's 16.75 cent-a-gallon gas tax by 2 cents a year for six years. Eventually, the higher gas tax and driving fees would raise an added $630 million a year for road repairs, according to estimates.
The S.C. Department of Transportation has estimated it needs an added $1 billion a year to get the state’s roads in excellent condition.
Many GOP Senators wanted offsetting tax cuts in return for supporting higher driving taxes and fees. Those tax cuts – including tuition tax credits and a tax rebate for the higher gas tax — are part of the Senate-passed proposal and are expected to cost the state roughly $105 mil lion a year when phased in.
Republican senators also wanted changes made to the oversight of the Department of Transportation.
The compromise passed Monday includes adding a ninth at-large member to a panel that oversees the Transportation Department. Senators also agreed to give the governor – who would appoint all nine commissioners – the ability to remove any commissioner for any reason.
“The reform and the relief were essential components” to passing a veto-proof bill, said state Sen. Larry Grooms, who drafted an original change to the Senate plan to include both the tax cuts and changes to the Transportation Department's commission structure.
Monday's approval came after the Senate had to vote for the second time this year to sit down state Sen. Tom Davis, R-Beaufort.
For two years, Davis blocked a gas-tax increase by filibustering as he advocated making the Department of Transportation a cabinet agency, reporting directly to the governor, and making changes to the State Transportation Infrastructure bank.
Afterward, Sheheen said the Senate’s approval of the tax hike was “a big freakin’ deal.”
New driving fees
If the proposal passed Monday by the state Senate becomes law, S.C. drivers would face:
A 12-cents-a-gallon gas-tax hike, without any future increases tied to inflation
The increase would cost roughly $1.40 a week for a driver who travels 15,000 miles in a car that gets 25 miles a gallon.
$500 cap on vehicle sales tax
The 5 percent sales tax on vehicle sales would increase by $200.
$250 new S.C. resident vehicle fee
The one-time fee would be paid by new S.C. residents when they register a vehicle in South Carolina.
$120 electric vehicle biennial fee, $60 hybrid biennial fee
Electric and hybrid vehicle drivers would pay the fees every two years.
$16 more for vehicle registration fees
For example, S.C. drivers under 65 would pay $40, up from $24, and S.C. drivers 65 and older or handicapped would pay $36, up from $20.
Several tax cuts also are included in the bill passed by the Senate Monday, including:
A higher dual wage-earner tax credit — Increases the cap to $50,000, up from $30,000 over six years
A tax credit for working poor — Non-refundable tax credit equal to 125 percent of the federal earned income tax credit; phased in over six years
A college tuition tax credit — Equal to 50 percent of tuition, capped at $1,500
A gas tax rebate — A refundable tax credit equal up to the amount spent on vehicle maintenance or gas tax increases; ends after seven years
A tax cut for manufacturing property — To 9 percent, down from 10.5 percent over six years