THE HOUSE PLAN HAS THIS IN COMMON WITH THE
GOVERNOR’S: IT ASSUMES WE HAVE A REVENUE PROBLEM.
Nearly a week after the governor released her plan to fix South Carolina roads, the House Ad Hoc Infrastructure Committee, chaired by Rep. Gary Simrill (R-York), unveiled its own proposal. In some small ways the plan is superior to the governor’s, but in other ways it’s worse. The committee’s actually specifies what restructuring the DOT Commission would mean – unlike the governor’s vague gesture at “reforming” the Department – and it provides for the devolution of some state roads to counties.
The committee plan also addresses the State Transportation Infrastructure Bank (STIB). Unfortunately, however, its proposed changes would primarily serve to increase the power of an unaccountable body whose main purpose is to issue new debt in order to finance unneeded road expansions in select counties.
The key components of the committee’s proposal are these:
- Allowing the governor to appoint the eight DOT commissioners, and in turn allowing the commission to appoint the DOT secretary.
- Expanding the STIB board from 7 to 13 members. Of the 6 new members, 3 would be appointed by the House Speaker, and 3 would be appointed by the Senate President Pro Tem.
- Lowering the minimum cost for a project to qualify for STIB funding from $100 million to $25 million, thereby increasing the number of projects STIB can fund.
- Forcing the STIB to use DOT’s official list of infrastructure priorities, but allowing the General Assembly to override these priorities with a joint resolution – thus defeating the point, which ought to be to take road funding decision-making out of the hands of lawmakers.
- Beginning a 3-stage process of transferring 18,000 miles of roads from state to county control, 6,000 miles at a time.
- Providing an initial grant of $1 million to each county for road maintenance.
- Increasing the amount of C-funds (transportation funds given to counties) until the total amount is more than doubled. This would be accomplished by increasing the percent of gas tax revenue dedicated to C funds.
- Lowering the gas tax to 10.75 cents, but then creating a new 6 percent excise tax on fuel at the wholesale level. According to Rep. Simrill, the net effect of this change at $2 a gallon would be about a 4 cent per gallon increase in tax. That would produce about a $200 million increase in revenue. At $3 a gallon this would produce about $350 million in revenue.
- Raising the automobile sales tax cap from $300 to $500. This – again according to Rep. Simrill –would produce about $60 million in revenue.
- Transferring the remainder of vehicle sales tax revenue not already committed to DOT to DOT. Currently these funds are dedicated primarily to education. This change is also expected to produce about $60 million annually.
Discussion of the proposal was not encouraging for proponents of reform who oppose the idea of tax increases. Unlike the governor’s plan, the new committee proposal doesn’t even pretend to offset its proposed tax increases with tax reductions elsewhere. Despite this fact not one committee member openly objected to any of the proposed tax hikes. It’s long been known that there’s little will for tax reform in the General Assembly, and the governor’s proposal doesn’t seem to be changing that. What the proposal may very well do, however, is provide lawmakers with the will and/or political cover they need to propose tax increases.
No committee members objected to tax increases, but many took issue with one of the few positive components of the plan, saying they were either outright opposed to devolving roads to counties or that they didn’t believe counties were being granted enough funds to maintain the roads they would be given. Some committee members also remarked that reforming the DOT commission would be a non-starter in the Senate. Thus the few components of true reform were objected to, and the plan didn’t even pretend to address other needed reforms such as prioritizing maintenance and eliminating the STIB.
So far, then, it’s the Haley plan, without the empty gestures at tax relief and structural reform.
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