The secretary of the South Carolina Department of Transportation is recommending a 5.5 cent increase in the state’s gasoline tax, which is among the lowest in the country.
SCDOT Secretary Buck Limehouse proposed the tax hike, in a report to the legislature, to cope with lower fuel tax revenue. The agency’s revenues have declined during the recession, forcing it to close rest areas and delay repairs.
Most of the state’s transportation revenue comes from a 16.8-cent tax on gasoline and diesel. The taxes rank fourth-lowest among states and have not been raised since 1987, according to the report. South Carolina relies on its fuel taxes for more than 90% of its transportation budget.
In other Southeast states, about half of transportation revenue comes from fuel taxes with the rest coming from sources like the general fund or sales taxes.
Revenue from fuel taxes fell 4% through fiscal 2009 from fiscal 2007, report said. To balance its budget, SCDOT has reduced expenses by $50 million. In fiscal 2010 it received $285 million from the American Recovery and Reinvestment Act.
Limehouse has floated the idea of a gas tax increase before. Earlier this year, he said lawmakers should consider increasing the tax by 10 cents over three years.
The state last issued bonds for transportation in September 2009 when the South Carolina Transportation Infrastructure Bank sold $88.59 million of revenue refunding bonds.