Looking for a way to pay for a road maintenance backlog in South Carolina, House Republicans say they are looking at a plant that would increase tax revenue from gasoline sales without raising the current 16 cents per-gallon fuel tax itself.
State Rep. Gary Simrill, R-Rock Hill, has spent the past three months chairing a House highway and infrastructure study committee. said the study committee he chairs is instead looking to end the sales tax exemption that wholesale distributors currently get when they purchase gasoline. In exchange, he believes the fuel tax could be lowered and South Carolina would still see an increase in tax revenue.
“(When gas is) $2 per gallon, if you removed the sales tax exemption but also lowered the price of the fuel tax down to 8.75 (cents per gallon), your increase is nearly $200 million over what we’re currently getting now,” he told reporters at the South Carolina Press Association’s annual legislative briefing on Thursday. If the price returns to $3 per gallon, the additional revenue could total $300 million each year, he said.
But Democrats at the same briefing dismissed the idea, saying it was a political maneuver to avoid directly increasing the gas tax.
“If we don’t address the gasoline tax as a viable alternative… we’re just kidding ourselves,” State Sen. Joel Lourie, D-Richland, said after Simrill’s remarks.
However, Simrill questioned if there was enough support in the chamber to increase the fuel tax. Gov. Nikki Haley has previously said she will veto any proposed increase, which means at least two-thirds of legislators would need to support the idea in order to override her. He also called the fuel tax a “diminishing return.”
“Cars are going to continue to get more efficient as time goes by,” Simrill said. “So how do we adapt to less revenue from the fuel tax? This sales tax proposal is one of the areas that we’re looking for.”
The House Transportation Infrastructure & Management has been considering recommendations it will make this year to reform highway funding in South Carolina. He said any revenue plan, especially one that raises taxes, would also need to shed local and secondary routes off South Carolina’s 41,000-mile inventory of roads — the nation’s 4th-largest. But county governments are largely against the idea, viewing the needed repairs that would come with it as essentially an unfunded mandate.
Even if the House reaches an agreement, it’s not clear the Senate will. Senate Majority Leader Harvey Peeler, R-Cherokee, said the House is much closer to a consensus on highway funding, “The Senate has 46 plans,” he said, referencing the 46 senators in the chamber.
Lawmakers will return to the Statehouse for the 2015 session starting next week.