Changes coming to South Carolina road funding?

By Keith Goble, Land Line state legislative editor | Tuesday, January 20, 2015

Plans to pay for transportation work in South Carolina are plentiful at the statehouse. State lawmakers are hopeful that they can work out a deal soon to address the additional $1.4 billion needed each year to cover the existing shortfall for road and bridge upkeep.

One option expected to be considered during the five-month session would increase the state’s 16-cent-per-gallon fuel tax rate by 10 cents.

Rep. B.R. Skelton, R-Pickens, sponsored a bill that would raise the tax rate all at once. However, residents would get a state income tax break for the first two years. Afterward, they would pay the same 26-cent tax rate as truckers and other non-residents.

H4563 would raise $335 million a year for roads, but the tax rebate would remove $211 million in new revenue the first two years, leaving the state with about $124 million more a year for roads. After the tax rebate sunsets, the state would get the entire $335 million a year.

Advocates say the switch would raise revenue overall.

However, the plan faces a steep uphill battle. Gov. Nikki Haley has said she would veto any fuel tax increase. Instead, Haley said she will offer a plan to lawmakers by the end of January to help the state address the funding problem.

A related option would lower the state’s existing fuel tax rate to as low as 8.65 cents per gallon. In exchange, the state’s 6 percent general sales tax would be added to fuel.

Supporters say the combination could raise an extra $300 million annually.

Sen. Larry Grooms, R-Berkeley, is the sponsor of another bill that would authorize fuel tax increases of two cents each year for the next decade. In exchange, S27 would reduce income tax rates by 0.2 percent annually during that time.

He says the change would raise $600 million each year for roads. At the same time, the state’s General Fund would have revenues reduced by about $1 billion.

Also up for consideration is an effort to authorize counties to raise taxes for local road work. Sponsored by Sen. Greg Gregory, R-Lancaster, S244 would give voters the final say on adding up to a 5-cent-per-gallon tax on fuel purchases, including diesel, to pay for repairs and fixes.

Another option offered to state lawmakers calls for putting toll booths on a portion of Interstate 95 to pay for road widening and repairs. Sen. Brad Hutto, D-Orangeburg, wants to require the state Department of Transportation to charge highway users to access I-95 where it crosses Lake Marion in either Orangeburg County or Clarendon County.

A separate option calls for asking voters whether they want to add a statewide, one-cent general sales tax for road funding. It is estimated to raise $650 million each year.

Another plan would reduce the number of secondary roads the state is responsible for maintaining by putting them under the control of local governments. H3263 would set up a county road transfer fund that would receive 5 cents from each gallon of fuel sold.

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