DALLAS – Business leaders in South Carolina called for an additional $600 million per year of transportation funding on Wednesday, along with more diversified and sustainable revenue sources to support the state's gasoline tax.
The South Carolina Chamber of Commerce is not specifying how much of an increase should be made in the state's 16.75 cent per gallon tax on gasoline and diesel fuel, but chamber president Ted Pitts said the tax must to be raised for the first time in 28 years to help fund the additional spending.
Some lawmakers have suggested transportation funding be increased by drawing on some of the $1.2 billion budget surplus that will be available when the General Assembly reconvenes next week. Pitts said a more sustainable revenue source is needed.
"We ask our leaders to make sure that they're not solely dependent on gas taxes or non-recurring revenues," Pitts said during the news conference at the state capitol in Columbia. "Gas consumption is going to go down, so we think this revenue stream needs to be diversified."
South Carolina Department of Transportation's $1.6 billion budget for fiscal 2016 includes $902 million of federal highway funding and $456 million from the state motor fuels tax, of which 77% comes from the levy on gasoline.
"Lawmakers should diversify the revenue stream in order to create a sustainable long-term funding mechanism instead of one that is excessively dependent on the gas tax," Pitts said.
Gov. Nikki Haley in January 2015 proposed an increase of 10 cents per gallon in the fuel tax to generate an additional $400 million of dedicated transportation funding, coupled with a 2% cut in the state income tax rate.
The South Carolina House passed a bill in early 2015 that adopted Haley's recommendations, but state Sen. Tom Davis of Beaufort blocked a Senate vote on the House bill with a three-week filibuster. Davis said Wednesday that he would continue to oppose the House measure and any other funding bill that does not change how the state allocates its transportation dollars.
The House proposal is still before the state Senate, as is a Senate plan that would raise the fuel tax by 12 cents and increase vehicle-related fees to bring in an additional $700 million per year.
The Senate proposal does not include the income tax break that Haley has linked to an increase in the gasoline tax.
Haley remains adamant that the higher gasoline tax that she proposed be offset by a reduction in the income tax rate, said spokeswoman Chaney Adams.
"The governor has been clear about her plan to invest in roads and bridges, and that hasn't changed," Adams said.
A recent Winthrop University Poll of likely South Carolina Republican primary voters found that 61% would support legislators who vote for a gas tax increase if the revenue were dedicated to "repairing roads and transportation infrastructure."
The state actually needs an additional $1 billion per year of transportation funding, not the $600 million proposed by the business group or the $400 million that the highway department said it needs, said Bill Ross, executive director of the South Carolina Alliance to Fix Our Roads.
"North Carolina and Georgia, our primary competitors for both economic development and tourism, have both passed legislation that would increase investments in their infrastructure system," he said. "Each of these states funds their highways at a much larger level than we do in South Carolina."