Gov. Nikki Haley willing to compromise on roads fix

Republican Gov. Nikki Haley said again Monday she is willing to compromise on a plan to pay to repair the state’s crumbling roads.

“We’ve talked with House members and now the senators at length,” Haley said. “We are willing to talk to them about getting this to work right.”

The S.C. House last week approved sending about $50 million to the state Transportation Department to be used to borrow roughly $500 million for roads and bridge repairs.

That borrowing would require approval from the Senate and Haley, who would not say Monday whether she would sign off on – or veto – that plan.

House members soon will begin working to reconcile competing road repair proposals, including one from Haley. The Republican governor’s plan calls for cutting the state’s income tax by 2 percentage points in return for a 10-cent-a-gallon gas tax hike. However, Haley allies have said the governor could settle for a smaller tax cut – 1.5 percentage points, for example – to be phased in over 10 years.

“The question ... remains – can (a competing House roads bill) be amended with an income tax reduction component without hurting the state’s credit rating,” said state Rep. Gary Simrill, R-York.

Haley said Monday she talked last week to two credit-rating agencies – Moody’s and Standard & Poor’s – about the impact of an income tax cut.

Haley said if the state cuts taxes, the rating agencies want to see state spending “shift” as well.

“We can pay for this,” said Haley, who says growth in other state revenues will offset the loss of income tax money.

Critics aren’t buying that.

They say that, starting in 2025, the cut would rob state agencies of $1.8 billion a year, money that goes to education, public safety and mental health.

To be on the safe side, the state should set up a fund similar to a savings account to offset the impact of economic downturns “so we’re never in trouble,” Haley said. “That’s what a credit agency wants to see.”

While Sen. Larry Grooms, R-Berkeley, has proposed increasing the state’s gas tax by 20 cents a gallon to pay for road repairs, Haley said Monday that she is not ready to go that far.

“We don’t want to see it go past the 10 cents because promises have been made to the companies that have come here that transportation costs would be at a minimum,” Haley said.

Haley also has called for giving the governor direct control of the state Transportation Department, a proposal many legislators oppose.

Haley said Monday she could approve changing the Transportation Department’s board so its members are appointed solely by the governor. Those board members then could appoint the state transportation secretary, instead of the governor.

Now, seven of eight Transportation Department commissioners are appointed by legislators, based on their congressional district.

“When you have commissioners from every region that are appointed by the Legislature, it becomes a big grab bag” in appropriating road money, Haley said.

This story was originally published March 17, 2015 at 7:55 AM with the headline "Gov. Nikki Haley willing to compromise on roads fix."