A Senate committee decided Tuesday to scrap a House plan that would fund roads mostly through a new excise tax on gas wholesalers, substituting its own version that would instead raise the state’s gas tax by 12 cents per gallon.
The measure passed 14-8, with an alliance of Democrats and moderate Republicans outvoting conservatives who opposed the tax increase. The proposal is identical to another bill that passed the Senate Finance Committee last month but failed to get anywhere once it reached the Senate floor. The House plan would have raised an estimated $400 million more each year, while the Senate plan is estimated to bring in an additional $800 million.
But two opponents made its passage harder by placing a procedural hold (known as a “minority report”) on the bill. So long as the objection remains attached, the measure requires a two-thirds vote to pass.
State Sen. Tom Davis, R-Beaufort, opposes such a large tax and fee increase, saying he does not think legislators are prioritizing roads even with current funds they already have. “How, in a year where we’ve $330 million in new dollars, we can’t find the political will to devote any of it towards roads and bridges?” he asked rhetorically during Tuesday’s meeting. “And we’re going to bank all of our hopes on a massive tax increase? I think that’s irresponsible.”
Davis had pushed for an income tax decrease from 7 percent to 5 percent for the state’s highest bracket. Gov. Nikki Haley advocated the decrease during her State of the State address as among the conditions for her to support raising the gas tax. Some Senate Republicans were already floating the idea last fall.
But most of the committee ruled out the idea, saying it would largely benefit the wealthiest South Carolinians at the expense of millions in tax revenue.
“I don’t have people talking to me about cutting their income tax. I have everybody talking to me about roads,” State Sen. Joel Lourie, D-Richland, said in response. “It doesn’t matter where I go… everybody’s got a roads plan.”
Finance Committee Chairman Hugh Leatherman had hoped to avoid the more than hour-long debate, saying the real conversation needs to happen on the Senate floor. He also defended not including additional funds for roads in the budget this year, saying any new revenue was gobbled up by education needs and Medicaid growth.
Senate Transportation Committee chairman Larry Groooms, R-Berkeley, had urged the committee to consider House reforms that gave the governor more control of the Department of Transportation and reduced the road mileage maintained by the state. Grooms noted the House version had cleared that chamber in a veto-proof 87-20 vote. However, Leatherman reiterated that any changes should be made in the full Senate.
“It seems to me we’d be better off to offer amendments on the floor and let the full Senate have the benefit of debate instead of us doing it here… and having to re-plow that ground again,” Leatherman said.