Haley ties tax cut in roads plan to South Carolina’s competitive edge

The poor condition of roads in South Carolina has lawmakers and Gov. Nikki Haley proposing alternate plans for raising money, including raising the gas tax.

COLUMBIA — Gov. Nikki Haley brought reinforcements to a news conference Wednesday to help push her proposal to raise money for fixing the state’s aging roads and bridges through a gas-tax increase coupled with a cut in the income tax.

But House Democrats, who held a counter conference immediately after, noted that the support was coming from Haley’s hand-picked Cabinet members: Secretary of Commerce Bobby Hitt, Department of Transportation chief Janet Oakley and Department of Parks, Revenue and Tourism Director Duane Parrish.

“We are now the state with the highest income tax in the Southeast,” Haley said. “We are now a state that is not going to look as competitive.”

Haley’s plan has been met with mixed reactions. It would raise the tax on gasoline by 10 cents over three years while reducing the state income tax from 7 percent to 5 percent over 10 years. It also calls for restructuring the Department of Transportation.

Hitt said an income tax cut would bring South Carolina a lot of attention, while Oakley said the gas tax increase would be a first step toward restoring the state’s roads. Haley’s plan, combined with revenue from the sales tax on vehicles, would generate about $400 million a year, while DOT has said it needs an additional $1.4 billion a year to maintain and improve the state’s roads.

Haley said DOT has a lot of wants and needs, and her plan addresses the agency’s needs.

“This is not the last time we’re going to talk about roads,” Haley said. “That’s always going to be a conversation.”

Afterward, state Rep. James Smith, D-Columbia, dismissed the proposal, labeling it “not a roads plan,” and adding that’s why “she now wants to consider this a tax reform plan.”

Smith said Haley’s plan is “ill conceived” and claimed it is not being given serious consideration by the Legislature; it hasn’t been filed as a bill and her proposal has not been taken up by any committee.

On Tuesday, the House Transportation Infrastructure and Management Ad Hoc Committee advanced a proposal that combines reducing the state’s 16.75-cent-per-gallon gas tax with an increase in the sales tax on gasoline at the wholesale level.

“I think it is wrong for this governor to hold a roads plan hostage in favor of some tax scheme that clearly favors the wealthiest of South Carolina at the expense of those working families who would see an increase in their gas tax and really get no benefit from what the governor purported to do,” Smith said.

Reach Cynthia Roldan 708-5891.