DALLAS -- South Carolina became the fifth state this year to raise its gasoline tax to boost infrastructure spending after the General Assembly rejected Gov. Henry McMaster's Tuesday veto of a bipartisan road funding bill that passed both houses with significant majorities.
The House overrode the governor’s veto Wednesday morning by a 95-18 vote. The Senate followed with a 32-12 override vote. The 2017 legislative sessions ends Thursday, although lawmakers will return May 23 for the official adjournment.
McMasters, a Republican, vetoed H. 3516 just hours after the state House approved the measure, 90-20, to raise South Carolina’s state gasoline tax by 12 cents. The state Senate passed the bill on Monday by a 32-12 margin.
In his veto message, McMasters said the higher gasoline tax and other road fees will be a burden on the poor and working classes. The bill also did not properly address the reforms needed to overcome a dysfunctional state highway department, he said.
“Requiring South Carolinians to pay more than 70% in additional taxes at the fuel pump is not reform,” McMasters said. “Rather, it is an oversimplified, misguided, and ineffective solution to systemic problems of long standing which require thoughtful analysis, restructuring, transparency and prioritization.”
A motorist who drives 15,000 miles a year in a car getting 25 mph would pay an additional $1.40 per week with the full 12 cent per gallon increase, according to legislative auditors.
The measure raises the maximum sales tax on a vehicle to $500 from the current $300, and levies new annual fees of $60 to register an electric vehicle and $30 for hybrid vehicles.
South Carolina last increased its state gas tax in 1987, according to Carolyn Kramer, manager of the Transportation Advocacy Center.
The override means that South Carolina joins Tennessee, Montana, California and Indiana, in raising taxes on motor fuels to support needed transportation investment this year and is the 22nd state to do so since 2013, she said.
The phased increase of the gasoline tax by 2 cents per year for six years, along with other road fees in the bill, is expected to bring in in an additional $630 million per year. The first increase will go into effect July 1, with increases every year on the same date.
South Carolina’s current gas tax brings in about $600 million a year, according to the South Carolina Department of Transportation.
The gasoline tax of 16.75 cents per gallon is the second-lowest in the nation, according to the American Petroleum Institute. Only Alaska’s gas tax of 12.25 cents per gallon is lower.
The average state gasoline tax is 22 cents per gallon, the API said.
About a third of the gas tax revenue in South Carolina, which totaled $167 million in fiscal 2016, is distributed to county road projects, and to the State Infrastructure Bank, which helps cities and counties fund new or expanded roads. Approximately $45 million goes to non-road state agencies.
The SCDOT has estimated it needs an additional $1 billion a year to maintain state roads and bridges. Highway officials said 54% of the state's roads are in poor condition and in need of rebuilding at a cost of $8 billion.
Both chambers passed versions of the road funding bill earlier in the year. The conference committee reported a compromise that reconciled the two measures late last week.
Rep. Gary Simrill, the leader of the Republican majority in the House and primary sponsor of the gas tax legislation, said the state is at an “infrastructure crossroads.”
"We had a choice between inaction, thereby passing the monumental cost of doing nothing and safety problems down to the next generation or we could provide leadership by fixing our roads and bridges by upgrading our infrastructure,” he said.
