Comments Off on Net Tax Increase not Necessary to Fix SC’s Crumbling Infrastructure

Net Tax Increase not Necessary to Fix SC’s Crumbling Infrastructure

Recently, there’s been a discussion in our state about raising gasoline taxes in an effort to repair our crumbling roads and bridges infrastructure. We’re being told that if counties don’t raise their sales taxes, and the state doesn’t hike the gasoline tax per gallon, our state will fall further behind in road repairs and maintenance. Like all South Carolinians, I am deeply concerned about the current state of our state’s transportation infrastructure, but we think there are other ways to address this need than a net tax increase on South Carolina families. In my years of being involved in public policy, I have learned that there is more than enough revenue coming through Columbia to address our state’s roads crisis. The question isn’t whether or not our government has enough money to spend; it’s a question of how well our state government spends the money it already collects.

That is why I would encourage policy makers in Columbia to reject the siren song of more state spending, and higher state taxes, and look at innovative ways to address our infrastructure crisis while keeping our state’s tax burden low. For starters, South Carolina must end its politically-driven roads funding scheme. The South Carolina Department of Transportation ranks road projects on the basis of need, and requests funding according to a criteria based on the most urgent issues. One of our state’s primary funding vehicles for roads and bridges projects is the State Infrastructure Bank, known as the SIB. While the SCDOT uses something called Act 114 criteria to rank road projects based on need, there is no legal requirement that the SIB fund the projects the SCDOT recommends. This means that politicians have priority in road funding decisions, even over SCDOT recommendations. This must end.

Additionally, there are other ways to raise additional revenues for infrastructure, without a net tax increase on South Carolina families. The first way does allow for an increase in South Carolina’s lowest-in-the-nation gasoline tax, but offsets this gasoline tax increase with a reduction in the state income tax on every individual. Offsetting an increase in our lower-than-average gasoline tax, by reducing our highest in the Southeast individual income tax, is a net win for South Carolina families. In fact, a recent analysis of such a plan indicates that this increase in gasoline taxes would raise over $600 million in new tax revenues specifically designated for infrastructure spending over the next decade, while income taxes would decrease by more than $1.2 billion over the same period. This means that we would raise an additional $600 million for roads, while reducing overall state taxation by a net of approximately $600 million on South Carolina families.

The other option that funds our infrastructure needs, while maintaining our state’s low overall tax burden, is to leave gasoline and income taxes at their current levels and designating a percentage of all new state revenue to infrastructure each year. This was a plan first outlined my by friend SC State Senator Larry Grooms. As South Carolina’s population and economy continue to grow, revenues to the state continue to increase without raising tax rates. Instead of allowing these new funds to go into the state’s general fund, to be allocated through annual legislative wrangling, we would like to designate a percentage of this new money for infrastructure. Like a family’s savings plan, we would just take a percentage off the top of all new state revenues for the next ten years. This would allow South Carolina to raise the necessary money to repair our transportation infrastructure without a single tax increase on a single South Carolinian.

I recognize that recent polling indicates that a large number of our fellow South Carolinians are signing onto the idea that a net tax increase is necessary to fix our roads. I also believe that this polling support is because they have been told the only way to repair roads and fix the potholes is to raise their taxes. Once our fellow citizens learn that our state spends $22 billion per year, and still wants to raise taxes to fix our transportation infrastructure, I believe they are going to be looking for common sense, conservative reforms like the ones I have outline above.

We do need to repair South Carolina’s infrastructure, but I believe the state has enough money to do it now if it acts with greater stewardship. South Carolinians can have both: smooth roads and a low state tax burden. Let’s work together to make sure this happens.

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