South Carolina

SC senate panel OKs 12-cent gas tax hike

South Carolina senators passed their own version of a plan Tuesday to raise money to repair the state’s crumbling roads, setting up a crash with their counterparts in the S.C. House.

The collision came as the Senate Finance Committee voted 14-8 to replace a House road-repair plan with a Senate proposal. The Senate plan would raise more money for roads — roughly $800 million a year versus $427 million — but also increase the gas tax more — by 12 cents a gallon versus 10 cents.

Despite a veto threat from Republican Gov. Nikki Haley, the Senate panel approved:

▪ Increasing the state gas tax by 12 cents a gallon over three years

▪ Increasing fees for 10-year driver’s licenses to $50 from $25

▪ Levying a $60 fee on hybrid vehicles every two years and a $120 fee on electric vehicles

▪ Increasing the cap on the state’s sales tax on vehicles to $600 from $300

House Speaker Jay Lucas, R-Darlington, said he was “extremely disappointed” the Senate committee did not debate the various parts of the House bill, instead substituting its own proposal.

Lucas called the House’s 87-20 passage of its own roads plan two weeks ago a “courageous vote,” adding senators focused only on “dollar signs,” not the other reforms in the House plan.

State Rep. Gary Simrill, the York Republican who sponsored the House bill, said the resounding House vote — enough to withstand a promised Haley veto — was because that proposal also included reforming the State Infrastructure Bank and S.C. Department of Transportation.

“The Senate bill ... has nothing for reform. It has nothing for right-sizing DOT,” Simrill said. “It is just a funding (proposal).”

Pressure has been building this session for lawmakers to pass a proposal to fix the state’s roads – a task estimated to cost up to an added $1.5 billion a year. Lawmakers go home in early June, so time is running out to reach an agreement. Next week, the Senate will debate its version of the state budget, which takes effect July 1, leaving even less time for roads.

And there are potholes ahead.

After Sens. Tom Davis, R-Beaufort, and Kevin Bryant, R-Anderson, both made procedural moves Tuesday to tie up the roads bill, the full Senate will have to vote to make the proposal a priority to ensure it is acted on this year.

However, Senate President Pro Tempore Hugh Leatherman, the Florence Republican who also chairs the Finance Committee, said most members of the GOP-majority Senate want to do something.

“Our folks say, ‘Fix our roads,’ ” Leatherman said. “That’s what they’re saying to me.”

Unlike the House proposal, the Senate plan does not include a tax cut.

The House roads-plan includes a small income-tax cut — $48 for the average taxpayer — intended to appease Haley, who has called for a “massive” tax cut in exchange for a gas tax increase.

Davis tried Tuesday to amend the Senate proposal to include Haley’s tax cut plan, saying a proposal from a governor who won re-election by a landslide deserved consideration. Haley wants to reduce the state’s top-end 7 percent income tax by 2 percentage points over 10 years, a move that would cost the state more than $1 billion a year in revenue by 2025.

But that effort immediately met resistance from Senate Democrats.

State Sen. Darrell Jackson, D-Richland, criticized Haley for not revealing her road-repair plan, including the income tax cut, until after she had won re-election. Jackson added while Haley won re-election by almost 15 percentage points, her road plan has not proven popular, failing to win support in the overwhelming Republican House.

State Sen. Vincent Sheheen, the Camden Democrat who Haley defeated in November, said he would not vote for any proposal that would give huge tax cuts to the state’s wealthiest citizens while requiring working-class South Carolinians to pay more to drive to work.

State Sen. Larry Grooms, R-Berkeley, said a roads bill needs to include a tax cut and Transportation Department reform.

But, he told the panel, “I don’t want to pass blame. I want to pass a bill.”

AT A GLANCE

House plan

Raises: Roughly $427 million a year

Tax hikes: Increase the gas tax by the equivalent of 10 cents a gallon, increase the maximum state sales tax on vehicles to $500 from $300

Tax cuts: Adjust the state’s income tax brackets, saving the average taxpayer $48 a year

Senate plan

Raises: Roughly $800 million a year

Tax hikes: Increase the gas tax by 12 cents a gallon over three years; increase fees for 10-year driver’s licenses to $50 from $25; levy a $60 fee on hybrid vehicles every two years and a $120 fee on electric vehicles every two years; increase the cap on the state’s sales tax on vehicles to $600 from $300.

Tax cuts: None

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