S.C. road efforts almost out of gas

Transportation reform is not likely to pass the Legislature this year.

BY JEREMY BORDEN and CYNTHIA ROLDAN

jborden@postandcourier.com croldan@postandcourier.com

COLUMBIA — The cry for transportation reform in South Carolina began with an enthusiastic roar this year, but lawmakers acknowledge that the Legislature’s three remaining days in Columbia are likely not enough to overcome paralysis on the issue.

Some hold out hope for a last-minute compromise, and an unexpected state surplus has injected some optimism that at least a few extra potholes could get filled this year. But the larger plans and compromises that could have given the state money for major new road projects and repairs years into the future have been sidelined by fundamental disagreements on the problem and how to fix it.

The reasons for the breakdown fall largely along three broken roads.

Gov. Nikki Haley’s proposal — coupling an income tax cut with a hike in the state’s gas tax — in her January State of the State speech surprised lawmakers, splintering two factions into three or more. Arguments that the Department of Transportation is ineptly managed and inefficient have taken root and held sway. And an effective anti-tax grass-roots campaign has helped successfully pressure senators into inaction.

With the GOP broken into several factions, Senate Democrats hold a particular key to breaking the impasse. A House plan passed in April, but it has gained little traction since.

Sen. Joel Lourie, D-Columbia, is among those looking for a compromise in the legislative session’s waning hours. He said he is encouraging senators to put politics and pressure aside.

“This has to be about doing your job, not keeping your job,” Lourie said. “It really needs to be about what’s best for the long-term economic, public safety viability of this state, not about whether I can survive a primary. And I think the public and the business community would be very disappointed if we don’t get it done this year, and will be outraged if we don’t get it done (next year).”

Haley came up with a solution that initially appeared to play well with at least some anti-tax conservatives.

The plan would raise the state’s gas tax, something she had previously said she would not consider, injecting millions of new dollars into transportation.

But it had a sticking point: That gas tax hike would have to be coupled with a phased-in 2 percent income tax cut for high-income earners and new reforms at the Department of Transportation.

If the three planks of the plan were not met, she would veto the result, she told lawmakers.

“The wheels came off the wagon when the governor mixed tax reform with road-funding reform,” said Rep. Leon Stavrinakis, D-Charleston. He said he’s not necessarily against the plan but believes it complicated the transportation debate. “At that point you had (everyone) on different pages and it increased the difficulty on getting consensus.”

It also meant different groups that didn’t necessarily care directly about transportation got involved. Those wanting money for education or other needs saw the income-tax cut as a threat to the state dollars they rely on.

It also landed like a thud with Sen. Hugh Leatherman, the Senate leader and perhaps the state’s most powerful politician. Lawmakers have said his opposition to Haley’s plan and support of a separate Senate plan, which includes a gas tax and other fee hikes with no income tax cut, has pushed the Senate into gridlock on transportation and nearly every other issue this year.

Leatherman, approached in the Senate chambers, had little to say about the impasse. He said the debate has been nearly all about tax relief — not a roads plan.

“Senators, generally, do in most cases what they think the people want in their districts,” Leatherman said. “I never look behind what the senators do.”

Haley was asked Friday at a news conference in North Charleston whether she was disappointed that lawmakers appear unable to pass a long-term plan for transportation.

“I’m disappointed that the Legislature just quickly assumed that they needed to raise taxes,” she said. “At some point they are looking for the easy way out, which is saying let the taxpayers pay for it.”

The state has a healthy surplus, Haley said, so it’s possible to have the largest commitment for transportation funding in state history, as well as the largest tax decrease.

“I’m saying if you’ve got this much revenue,” she said, “give back to the taxpayers.”

With the inside pressure coming from the business community for more money for roads, the outside pressure built from a grass-roots conservative campaign in the opposite direction.

Americans for Prosperity, the Arlington, Va.-based anti-tax group, has put ads on the Web, hosted phone banks, held a Statehouse rally and hung info on people’s doors. They’ve been consistently fed with information from the S.C. Policy Council, an anti-tax Statehouse voice that has galvanized its own supporters.

Early on, the campaign targeted transportation chairman Sen. Larry Grooms, R-Charleston. A door hanger encouraged people to sign their name to a letter with Grooms’ address on it.

“STOP THE GAS TAX HIKE,” the pre-written postcard said. “Before you ask my family and me for more money, I ask that you spend the money we gave you more efficiently.”

The campaign has been effective, Grooms said. A compromise plan he floated in recent weeks has stalled at least in part because legislators have been deluged with phone calls after he called a news conference to announce it.

Grooms had cobbled together what he hoped would be a winning coalition to unite Republicans and bring some Democrats to the table. The compromise plan would increase the gas tax by 4 cents a gallon every year for three years, raising $400 million initially and, eventually, $800 million. Increases after that would be tied to inflation with a cap so that South Carolina did not have a higher gas tax than neighbors Georgia and North Carolina.

It also would restructure the Department of Transportation and cut income taxes by 1 percent in years when economic growth was good, close to what Haley had asked for.

Grooms accused the group of floating “misleading” information, including failing to inform people that the plan called for the DOT changes many have been clambering for.

Dave Schwartz, South Carolina director for Americans for Prosperity, disagreed and said lawmakers aren’t used to being held accountable. He said dozens of activists across the state don’t want more money for roads when the Department of Transportation is viewed as dysfunctional, an argument frequently heard in the Statehouse recently.

“There are roads in serious need of repair,” he said. “But without reforming the way the Department of Transportation functions ... we’ll never see those repairs. We want to fix our roads. We just don’t think throwing more money at a dysfunctional system is the right way to do it.”

The promise of unexpected surplus funds in recent days has thrown yet another wrench into the push for a long-term plan.

Sen. Tom Davis, R-Beaufort, has led the anti-tax charge by staging a days-long filibuster in the Senate to block the transportation debate. Davis said the current system allows individual legislators to push projects too easily.

“We’ve got to cut off legislators’ fingers,” Davis said.

On Friday, the Board of Economic Advisers announced that the state would have $415 million in higher-than-expected revenue. About a quarter of that money is earmarked for certain expenses, but Davis wants to use as much as possible of the remaining $300 million surplus for roads.

Schwartz said it comes down to voters’ trust to break any impasse. People don’t trust their politicians, he said, so why should they let them raise their taxes?

“There is a total mistrust when politicians make promises,” Schwartz said. “That is the main problem that can only be solved in one way and that is to dramatically fix the way government does business.”

Prentiss Findlay of The Post and Courier contributed to this report