South Carolina bill would more than double fuel tax

By Keith Goble, Land Line state legislative editor | Wednesday, December 18, 2013

South Carolina lawmakers could revisit a possible fuel tax increase as soon as next month. A related effort didn’t get far at the statehouse earlier this year.

Sen. Ray Cleary filed a bill on Tuesday, Dec. 17, that can be considered during the upcoming regular session. It would address a nearly $30 billion transportation funding shortfall during the next two decades.

His bill, S891, would more than double the current 16-per-gallon fuel tax rate. Specifically, it would increase the tax rate by 20 cents over 10 years.

The tax would be increased by 2 cents each year through 2023. The new revenue could only be applied to the state’s highway fund.

The South Carolina Department of Transportation estimates that the state needs $48 billion over the next 20 years to address all road and bridge repairs. Revenue from fuel taxes is estimated to raise $19 billion, which is less than half of the amount needed.

Gov. Nikki Haley is opposed to increasing the state’s fuel tax. The tax at the pump, which hasn’t changed since 1987, raises about $500 million annually.

Instead, the governor signed a bill into law earlier this year to use a mix of new revenue, sales taxes and borrowing to raise as much as $1 billion during the next decade to improve roads and bridges throughout the state.

Haley described the bill as “historic.” She said at the time that the infrastructure bill allows the state to set priorities without increasing taxes.

The new law routes $50 million to the State Transportation Infrastructure Bank to be used to borrow $500 million for major work. About $40 million a year from the state sales tax on vehicles is designated for secondary roads, which aren’t eligible for federal money. Another $50 million in one-time funding can be applied to bridges.

Another bill prefiled for the session that begins Jan. 14, 2014, would raise money for local governments to improve roads and bridges. H4356 would let voters decide if their county should raise the local fuel tax rate by as much as two cents per gallon to pay for repairs.

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