South Carolina’s state budget has millions of dollars of proposed additional spending for Horry County in beach renourishment, county and municipal road improvements, funding mandates on local governments, and kindergarten through grade 12 education.
On the cost side, Grand Strand residents, along with all S.C. motorists, will pay two cents a gallon more for motor fuel – 12 cents after increases over six years – to finance the long-sought solution for money to maintain and repair highways and bridges. The S.C. motor fuel tax (MFT) has been 16 cents a gallon for decades. Previous legislatures have taken money from other sources in a year-to-year way of funding repairs.
It was widely acknowledged that an increase in the gasoline tax was necessary, but it took time for legislators to garner enough votes to override Gov. Henry McMaster’s veto of the roads/gas tax legislation. The governor had proposed a bonds program to finance road maintenance, but he was not as hard-nosed as he might have been, or as previous governors, on the increase.
S.C. Sen. Greg Hembree of Little River acknowledges “the gas tax is the right way to pay for road maintenance and repair,” but he points out that the tax is regressive, having the same financial impact on working poor people as on those with high incomes. Hembree was among legislators who preferred more broad-based income tax relief, reducing income tax rates while increasing the MFT.
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The increase in the MFT is offset with increases in earned income tax credits and an odd system of rebates on some of the gasoline tax increases.
“We missed an opportunity to do tax relief for the middle class and the working poor,” Hembree said. “The tax relief in there is partly just squirrelly,” noting that tax credits for parents of college students is well short of broad-based.
The good part is that the Department of Transportation has “a predictable stream of funding dedicated to road and bridge maintenance and repair.” All revenue from the increases is “100 percent dedicated to repair roads and bridges, not administrative costs,” Hembree said.
The General Assembly-approved budget includes a $10 million-per-year increase in funding to county transportation committees, which leverage money from the state to pay for county, state and municipal projects, such as resurfacing or turn lanes at schools. Over five years, total state funding to the CTCs will increase over $40 million. Hembree said “dramatically increased funding is a big deal to counties,” and especially to Horry, the largest county east of the Mississippi River, with many miles of roads.
The local government fund was increased by $10 million, which will help cities and counties pay for under-funded mandates from the state. The legislative spending plan also included increasing $33 million to pay for half of a two percent increase in the employer contribution to the state pension system. Horry County government and schools employees are in the system.
Horry County Schools also will have more money from an increase of $75 per pupil in base funding, a total of $60.5 million statewide. McMaster has until midnight Monday to act on the budget. The governor has line-item veto power.