H.3948 would exempt large commercial motor vehicles (vehicles weighing over 2,600 pounds used for the transportation of property on a public highway) from property taxes. In place of property taxes the Department of Motor Vehicles (DMV) would impose a road use fee based on the fair market value of the vehicle and an assessment ratio of 9 and ½ percent. The bill also requires large commercial motor vehicles be registered annually rather than biennially, a change which entails paying registration fees every year instead of every other year.
Under this bill, the first $17 million in revenues from the combination of road use fees and existing trailer and semitrailer registration fees would distributed to counties under an existing formula, and the remainder of the revenues would be credited to the state highway fund in order to finance expansions and improvements of existing interstates.
There are two potential motivations behind this bill, both of them bad. The first obvious motivation is to raise more money for state roads, particularly interstates. As SCPC has explained numerous times, South Carolina’s road woes are due to a mismanagement, not a lack of revenue. Further, interstates are not the class of road that are most likely to be neglected by South Carolina’s current road funding system. The second potential motivation behind this bill, is to enable more bonding by labeling a tax (which faces bonding limitations) as a fee. Both the state and local governments in South Carolina are already facing billions in debt, lawmakers should be concentrating on reducing this debt, not adding more.
South Carolina has the money it needs to maintain roads, it just needs to manage it properly.