WHEN IT COMES TO GETTING YOUR MONEY, STATE SENATORS WON’T LET A LITTLE OL’ CONSTITUTION GET IN THE WAY

When a special Senate subcommittee met on Tuesday, the purpose was clear: raising revenue by increasing the gas tax and other fees. There’s just one problem – the constitution says they can’t.

In fact, Article 3 Section 15 of the constitution plainly states that “bills for raising revenue shall originate in the House of Representatives, but may be altered, amended or rejected by the Senate.” Senators are either unaware of, or consciously violating, this constitutional provision.

It’s clear that at least some senators are aware of the prohibition, and they’re (apparently) attempting an end-run based on semantics. This point was highlighted when Sen. Ray Cleary (R-Georgetown) introduced his transportation funding plan earlier this month. Among other highly questionable provisions, the bill eliminates several tax exemptions. The purpose of the bill, clearly, is to generate revenue, and so Cleary noted in his remarks that he thought the Senate had the power to eliminate exemptions: “Whether it raises revenue or not,” he remarked, “is secondary.”

The point was raised again in Tuesday’s subcommittee meeting. Cleary dismissed the problem by saying the Senate should draft and pass the bill, then allow the House to create its own bill, based on the Senate template. Whether senators believe House members are insufficiently competent to pass their own fee and tax hikes, we leave to others to decide.

In addition to Cleary’s proposal, a number of other Senate bills would raise “user fees” or eliminate exemptions in order to raise revenue. Here, for example, are three bills designed either to increase existing taxes and fees, or to create new taxes and fees:

  • S.23 would impose a new 16-cent per gallon user fee on liquefied natural gas .
  • S.27 raises revenue by increasing the user fee on gasoline by 2 cents a year until 2025 when it would reach 36 cents a gallon and remain for every subsequent year.
  • S.406, in addition to raising revenue, clearly violates the separation of powers. This bill allows the State Fiscal Affairs Authority (SFAA) to annually impose a new “motor fuel user fee surcharge” on motor fuels in addition to the existing gas tax. The bill allows a new tax to be imposed by an entity other than the legislature – the only constitutionally empowered branch with this authority.

Perhaps the most egregious example of this is Sen. Cleary’s bill (S.523), which raises and/or creates a plethora of taxes and fees. These include:

  • An increase in the gas tax by at least 10 cents initially, and by up to 2 cents every year thereafter.
  • An increase in DMV license fees.
  • An increase in biennial registration fees for private passenger motor vehicles and property-carrying vehicles.
  • A new licensing fee on boat, equipment, and other kinds of trailers.
  • A new $120 biennial fee on motor vehicles powered by any fuel other than motor fuel (electricity, hydrogen, and a new $60 biennial fee on hybrid vehicles.
  • The replacement of the property tax on motor carriers with a road user fee.
  • A new “road impact registration fee” on any person registering a motor vehicle, motorcycle, or RV.

Each of these bills violates the constitution, particularly S.523, which is simply a massive tax increase.

It’s important to note that there actually is a definition of a user fee in the code. It reads: “‘Service or user fee’ means a charge required to be paid in return for a particular government service or program made available to the payer that benefits the payer in some manner different from the members of the general public not paying the fee. ‘Service or user fee’ also includes ‘uniform service charges.’”

Gasoline is clearly not a government service or program. Citizens therefore shouldn’t have to pay the government for the privilege of their gasoline. Gasoline is a private good and is subject to taxation by the federal government and the state. These are not interchangeable terms. User fees and taxes both raise revenue, but they are different.

In short: some senators are attempting to arbitrarily swap the terms in order to circumvent the state constitution. Both the federal and state constitutions place hindrances on the government’s ability to tax citizens. Article 3, Section 15 is one of those hindrances. Senators should abide by it.

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By South Carolina Policy Council

Since 1986 the South Carolina Policy Council Education Foundation has advocated innovative policy ideas that advance the principles of limited government and free enterprise. The Policy Council is the state’s meeting place for business leaders, policymakers, and academics – as well as engaged citizens – who want to see South Carolina become the most free state in the nation. For questions or comments on the articles on this website, please email Research Director Jamie Murguia.