South Carolina House approves 10-cent fuel tax increase

By Keith Goble, Land Line state legislative editor | 4/20/2015

A legislative effort halfway through the South Carolina statehouse would hike the state’s fuel tax rate by a dime to get road and bridge work done. The governor, however, has threatened to veto the $430-million-a-year House funding plan.

The state’s fuel tax rate now is set at 16.75 cents per gallon. The rate has remained unchanged since 1987.

The Republican-led House voted 87-20 on Wednesday, April 15, to send a bill to the Senate that would increase the fuel tax rate by 10 cents to 26.75 cents.

H3579 includes a provision to increase the vehicle sales tax and trim the state income tax.

Gov. Nikki Haley opposes the House plan that falls well short of the $1.5 billion annually that the South Carolina Department of Transportation says is needed for the next 20 years to make road and bridge improvements. In posted remarks on Facebook, the Republican governor said she would veto the bill.

“Your Republican House just voted to raise your taxes by $365 million next year. If that stuns you as much as it stuns me, here’s how your legislator voted,” Haley wrote in a post that included a list of how House members voted.

The governor posted a follow-up hours later that read “We didn’t get to the position of being one of the fastest-growing economies by sticking it to the taxpayers.”

Haley announced during her State of the State speech in January that she would support a fuel tax increase as long as other changes are made as well. In return for her backing the tax increase, the governor said the Legislature must vote to trim the state’s income tax rate from 7 percent to 5 percent over 10 years and scrap the current highway commission.

She told lawmakers the 2 percent reduction in state income tax would be a “massive draw for jobs and investment to come to our state.”

The House plan provides about $50 savings on most personal income taxes. In addition, the governor would get more control over the state DOT.

Haley has said the change would end “short-sighted regionalism and political horse trading” at the agency.

A competing $800-million-a-year Senate plan would raise the fuel tax rate by 12 cents and increase certain vehicle fees. However, it does not include any DOT reform or income tax cut.

Other funding plans include:

S142 would route all General Fund revenues in excess of general appropriations and supplemental appropriations to the state highway fund for work on existing state and local roads.
S406 would create a fuel surcharge adjusted annually that could not increase more than 10 cents per gallon in any one year. A tax credit would also be available for residents.

To view other legislative activities of interest for South Carolina, click here.

Copyright © OOIDA