SC House approves bill that would raise gas tax by 10 cents

COLUMBIA, S.C. (AP) — A bill that would generate more than $400 million in extra funds annually for road and bridge work passed the South Carolina House overwhelmingly Wednesday.

The 87-20 margin could become especially important down the road, because it is big enough to override a possible veto from a governor who has said before she isn't sure the bill provides enough income tax relief to offset the extra taxes on gasoline.

Under the measure, drivers would pay the equivalent of 10 cents more per gallon for gas. The bill offsets that increase by giving most taxpayers a $48 savings on their personal income taxes.

The real fight Wednesday was over the income tax cut and not the road funding. Gov. Nikki Haley and some Republicans want a bigger income tax cut, and they introduced two amendments. One increased the income tax cut to more than 1 percent over 10 years, costing the state about $900 million. A second provided about $220 million in tax relief.

The amendments were easily defeated. All the lawmakers speaking against them were Republicans who said the state simply ignored roads for so long that it can't afford to both improve highways and give taxpayers money back.

"As much as I would prefer to cut taxes and fix our roads, my priority at this point is fixing our roads," said Rep. Kirkman Finlay, R-Columbia.

Rep. Gary Simrill has been in charge of the roads bill. He noted he held his first committee meeting nearly seven months ago.

"The House vote today is serious about infrastructure funding and reform. Those votes back that up," said Simrill, R-Rock Hill.

But any roads bill still has a long way to travel. The Senate has its own bill that raises more money through more taxes and fees, but has no Department of Transportation reform or income tax cut in it. And looming over it all is a veto threat from Haley unless the bill finds new revenue for roads without raising taxes too significantly along with a deeper income tax cut and changes that allow her more control at the DOT.

Simrill said he has talked to Senate President Pro Tem Hugh Leatherman, who has indicated the Senate may be closer to the House's thinking than it might appear. He also thinks the governor will eventually come around to supporting the House plan.

The taxes in the House bill are tied to the price of gas. So Simrill said if gas increases to $3 a gallon, the amount raised for roads could be closer to $600 million a year. The bill also provides $50 million that the state can use for a one-time borrowing plan of $500 million to fix the highways in the worst shape.

The Department of Transportation has said it needs an additional $1.5 billion yearly over 20 years to bring roads to good condition. South Carolina's highway system of 41,400 miles is the nation's fourth largest, partly because it includes a vast number of short, limited-traffic roads. Half of the miles the DOT is responsible for maintaining doesn't qualify for federal funding.

Business leaders say funding roadwork must be legislators' top priority for the rest of the session, which is set to end June 4. The South Carolina Chamber of Commerce, Manufacturers Alliance and Palmetto Business Forum have sent legislators letters urging action.

House members defeated about two dozen other amendments, including one that would have raised the gas tax by 21 cents a gallon but exempted drivers who showed proof of residence in the state; and another that would completely abolish the DOT commission.

WSOC