Desperate to get a roads plan passed with just a little over three weeks remaining in the regular Statehouse session, Senate Republicans floated a proposal they said would raise more money for road work, but also provide some income tax relief and change how the state’s transportation agency is governed.
The plan revealed by Majority Leader Harvey Peeler, R-Cherokee, on Thursday morning tries to merge what are currently competing efforts on the Senate floor. The proposal passed by an alliance of Democrats and moderate Republicans on the Senate Finance Committee last week would raise the state’s 17 cents per-gallon to 29 cents over a period of years. But the governor (and a majority of Senate Republicans) want an income tax cut to offset the additional money that customers would be paying at the pump.
Those conservatives say they also want a revamp in the commission that approves new construction projects around South Carolina. The Transportation Commission is chosen now by legislators from each of the state’s seven congressional districts, with the governor getting an eighth pick. But the GOP plan offered Thursday would change that to the governor picking each commissioner, with the appointed commission then choosing the Department of Transportation’s next leader.
The plan would also keep the 12-cent gas tax increase and fee increases from the Senate Finance Committee plan intact, which would raise an estimated $800 million more each year. But it would decrease each of the state’s five income tax brackets by one percentage point, which budget analysts say would cut the total taxes collected by about $710 million.
“There is a strong desire to get a roads bill moved forward,” Peeler told the Greenville News. “But a bill that is going to increase revenues without reform of DOT, without a tax cut, is going to be vetoed and the veto will certainly be sustained, I think, by the House.”
Governor Nikki Haley has previously said she would not support increasing the state’s gas tax without the income tax cut and DOT changes included. Her spokeswoman said Thursday that the Governor’s Office is reviewing the new proposal. Democrats would not commit to the proposal either way, beyond saying it was a “recycled” version of what Haley previously requested.
Senate Minority Leader Nikki Setzler sarcastically welcomed Republicans to the roads funding debate in a statement, noting they had blocked an effort to give the bill priority status last week. “If I took a vote that would put passing a roads bill on life support as the majority of the Senate Republican Caucus did last week, there would be urgency to introduce a plan from me too,” he said. But Democrats have been opposing the tax offset, noting it would only affect those South Carolinians who pay income tax.
However, GOP senators are likely to face strong opposition from their own leader — Senate President pro tempore Hugh Leatherman, R-Florence — on the DOT reform section. Leatherman has strongly opposed giving the governor more power over the agency. Democrats have usually sided with Leatherman on the roads funding plan this year. Another wild card could be State Sen. Lee Bright, R-Spartanburg, who has opposed increasing the gas tax at all. He has spent the past week effectively filibustering the Senate budget debate in a call for any surplus budget revenue to go solely towards road work. Bright said he was not involved in crafting this new proposal.
It also isn’t clear if House leaders would support the bill, as it does not include the excise tax they wanted instead of a gas tax increase. It also dropped a House proposal that would have offered counties one-time money to take ownership of some of the state’s surplus secondary road mileage.
Matt Long and Bill Dubensky contributed to this report