South Carolina joins movement to raise gas taxes



Posted on 06/20/2017 by David Radke

Gas

Sales taxes on gasoline taxes are levied in most states, with the funds usually being directed to road maintenance and infrastructure spending. But in many states including South Carolina, these taxes haven't increased in decades, putting a strain on already beleaguered finances.

The Charleston Post and Courier reported that South Carolina Governor Henry McMaster vetoed a bipartisan bill to increase the state's gas tax by 12 cents per gallon over the next six years. But after the bill passed both the state's House of Representatives and Senate with a strong majority in favor, the governor's veto is expected to be overturned.

If the legislature moves forward with that plan, it would be South Carolina's first gas tax increase in 30 years. The state's current tax rate of 16.75 cents per gallon is currently the second lowest in the U.S. Lawmakers said the tax hike would help the state raise an additional $600 million per year, with the funds earmarked for road and bridge repairs. The bill also cut taxes and introduced rebates for earned income, college tuition and manufacturing expenses, which The Post and Courier explained was a key factor in earning the support of legislators from both political parties.

A growing trend

Assuming the veto is overturned, it would mark the latest piece of evidence in a nationwide trend toward gas tax hikes, which The Wall Street Journal noted was formerly considered a politically dangerous move. But lawmakers and their constituents may be coming around to the idea due to the dismal shape of many roads and interstate highways. In South Carolina, supporters of the tax increase argued that traffic congestion and accidents could be the result of poorly maintained roads. They also noted that businesses were less likely to create jobs and invest in states without a robust transportation network to support operations. Tire manufacturer Michelin was among the corporations supporting the bill.

The Journal reported that states like Tennessee, Alabama, Louisiana and Oklahoma had also recently approved gas tax increases, despite their generally tax-averse political climates. Tax hikes in these states were seen as well-timed for two reasons: Primarily, most of them already had some of the lowest gas tax rates in the nation. In addition, gas prices have remained low compared to the last decade. The Journal found that with a nationwide average price of $2.48 per gallon including taxes, U.S. motorists were paying nearly $2 per gallon less than in the summer of 2008.

Tax bills remain contentious, especially in Republican-led statehouses. Opponents of gas tax increases favor a fee-based system, usually involving toll roads. Others including Governor McMaster argue that the funding for road improvements is already there, but isn't being allocated properly.

"We have plenty of money in the system to do all the work on the roads if we would just apply it to the roads that need the work," McMaster said, according to The Post and Courier. "It's not necessary to put yet another tax on the people of South Carolina." 

Conservative advocacy groups also fought against the bill in South Carolina. Americans for Prosperity, the free-market political-advocacy group backed by billionaire brothers Charles and David Koch, said it would be useless to raise the gasoline tax without reforming the state Transportation Department by making its director a gubernatorial appointee.

If the governor's veto is in fact overturned, the first marginal fuel tax increase would go into effect July 1.

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