Gov. Nikki Haley probably feels like she’s stepped into the crossfire of a circular firing squad with her plan for road funding.
Her pals in the far, far right corners of the Republican Party are yelling and screaming about a “new tax” and the governor’s promise to veto any such thing.
Many legislators and just plain folks who now understand our state’s highway system crisis consider the governor’s idea of raising the fuel tax by 10 cents a gallon over three years as too little and very late.
That she leveraged any fuel tax increase to lowering the state income tax and to a termination of the Department of Transportation Highway Commission probably means her plan per se is politically dead on arrival at the House and Senate.
For sure, the governor’s proposal, measured against the crisis it addresses, seems like pennies when dollars are needed, all bundled in political cover formats, like the curious linkage to income tax reductions.
But we South Carolinians should see this for what it is — a giant leap for a governor who pretty much swore she’d veto any “new taxes” and specifically any increase in the fuel tax.
And I say, good for Gov. Haley!
She did what she said she would do — propose a plan by the end of January. And it had to be difficult for her.
But the roads and bridges crisis has grown steadily during her first term, and started to aggravate the state’s economic development initiatives. When Michelin North America President Pete Selleck last fall publicly described South Carolina roads as a “disgrace,” he connected the dots of economic operations in our state with the imperatives of a modern highway system.
And South Carolinians over the past year have reacted to the insidious and terrible costs of inadequate highways and bridges — time lost on congested highways, dollars lost in vehicle repairs related to potholes, etc, and lives lost on poorly designed rural and interstate roadways.
We’ve come to realize that we can do better — and that we need better roads and bridges and transit. In 2014, the political dynamics changed and the highway system crisis finally evolved past the “no tax” political dogma that had hijacked it for decades, and into a hot button issue with a grass roots demand for fixes and reforms. No responsible elected leader can continue to ignore the realities of a crumbling highway system in our ambitious state.
And, with her State of the State messaging, Gov. Haley stepped out of the political corner she had painted herself into and offered a starting point proposal for adequate funding and policy and management reforms in the systems that build and maintain highways and bridges.
Now if legislative leadership and the governor are serious about resolving this crisis, they’ll start matching the best of all proposals and give road funding and reforms the priority these policies demand.
There are questions aplenty that should generate constructive debates.
The S.C. Department of Transportation has consistently projected an annual funding shortfall of about $1.4 billion.
Is that a good number? Or could a stepped process to adequate funding target a lower annual deficit?
A penny of fuel tax generates about $31 million annually. Gov. Haley’s plan thus projects $300 million more annually after a three-year implementation.
Clearly, that’s not enough for even a bare bones funding program. Where will the balance come from?
Shouldn’t incremental general fund revenues be off limits? The highway system can be funded by its users — and not subsidized by tax dollars taken from colleges and technical education and law enforcement.
How about vehicle-related taxes and fees like driver’s licenses and vehicle registration fees? Shouldn’t these revenues be reserved for road system funding?
When will the $300 sales tax limits on vehicle purchases end? This huge sales tax exemption has been in place since 1984 when Georgia and North Carolina had similar exemptions. Georgia now applies its 7 percent sales tax on vehicles, and North Carolina assesses a flat 3 percent highway user fee. This cap means that someone who buys an old pickup truck in South Carolina for $6,000 pays the same as someone who buys a $130,000 Mercedes. While we’re pondering the illogic of that, our legislators should consider that adjusting or eliminating this exclusion could generate up to $150 million annually.
Gov. Haley’s starting point falls woefully short of a long term fix for the highway system funding crisis, but the governor is a good negotiator. Having taken the noble political step toward user-pay funding reforms, she likely sees the ball in the Legislature’s court.
The key to resolving this crisis always has been the governor’s position. Her plan may seem small and leveraged, but her political step toward the realities of users-pay funding could be a huge turning point toward assuring a road system befitting our ambitious state.
Let’s hope so.
Ron Brinson, a former associate editor of this newspaper, is a North Charleston City Councilman. He was president/CEO of the American Association of Port Authorities from 1979-1986 and president/CEO of the Port of New Orleans from 1986-2002. He can be reached at email@example.com.