Politics & Government

Fights loom on gas tax hike, income tax cut

If senators use the last six days of this year’s legislative session to debate a road funding proposal that is on deck in the Senate, there will be big fights.

▪  One fight will be over proposed tax increases, including a 12-cent-a-gallon gas tax hike.

While some Democrats and Republican senators are OK with the roughly $800 million-a-year proposal to pay for road repairs, others, including libertarian-leaning GOP senators, vehemently oppose the tax increases.

For example, state Sen. Tom Davis, R-Beaufort, is filibustering a proposal to spend $85 million from a state savings account because it does not send any of that money to roads.

Davis’ filibuster is blocking debate on the roads bill, which also would double fees for 10-year driver’s licenses to $50, levy a $60 fee on hybrid vehicles every two years and a $120 fee on electric vehicles, and double the cap on the state’s sales tax on vehicles to $600.

Davis has said those increases are unnecessary when the state has $400 million in additional revenues that are expected to be added formally to its $7 billion general fund budget Friday.

▪  A likely equally large fight will come on the income tax cut that a group of Republican state senators plan to add to the road repair plan.

GOP senators will propose a 1 percentage point cut across the state’s income tax rates, the highest of which is 7 percent.

State Sen. Vincent Sheheen, D-Kershaw, said last week that cut should not be part of a roads plan. “This tax cut for the wealthy … is massive.”

When fully implemented, the Senate Republican plan would save the state’s highest earning taxpayers — those who make more than $2 million in taxable income — an average of $62,066 a year, according to projections by the state Revenue and Fiscal Affairs office.

Meanwhile, 1.1 million S.C. residents would not get any tax cut because they do not make enough taxable money to pay income taxes. That includes the working poor and some retirees, who would pay higher gas taxes and fees related to driving a vehicle.

Sate Sen. Sean Bennett, R-Dorchester, said Sheheen’s criticism of the tax cut is just “typical political rhetoric.”

The proposal will be an across-the-board cut to every income tax-paying citizen, Bennett added.

“Will some people get (a) bigger dollar amount break? Sure, that’s how percentages work on whole numbers,” Bennett said. “It’s certainly not targeted for a few select people.”

After it is fully phased in, in five years, the income tax cut plan would cut $709 million a year from the state’s general fund. Sheheen called that cowardly, saying the plan would force future elected to make the tough choices of what to cut from state government “instead of (lawmakers) having the guts to do it today.”

“People have to have time to adjust to a new tax policy,” Bennett countered.

Sheheen, who ran against Gov. Nikki Haley in November and lost by nearly 15 percentage points, blamed the Republican for making it difficult to pass a roads proposal.

In her State of the State address, Haley proposed cutting income tax rates by 2 percentage points while endorsing a 10-cent-a-gallon gas tax increase.

“The passage of a roads bill was made unlikely in January when the governor endorsed an income-tax cut for the wealthy above focusing on a roads bill,” Sheheen said.

Haley press secretary Chaney Adams said Sheheen would “be better off if he finally realized that South Carolina’s economy is helped by lower taxes rather than higher ones.”

▪  While the gas tax hike and income tax cut debates will be heated, they might not be the most explosive debate of the week.

Bennett said he expects debate of proposals to reform the state Transportation Department – Haley wants control of the agency, which some senators are loathe to relinquish – will end up being the most contentious.

The Ks go together

State Sen. Katrina Shealy, R-Lexington, says anyone who knows her knows how much she loves children.

The first-term Lexington Republican – the sole woman in the state Senate – cut her legislative teeth on a Senate oversight panel for the state’s embattled child welfare agency.

Now, Shealy is putting her energy toward a new project, aimed at helping children in the state's child welfare system have normal childhood experiences.

Shealy has formed a nonprofit, called Katrina's Kids, that will raise money to help children in foster care and group homes attend summer camps and art programs, take part in athletics and have access to other experiences outside of school.

“It was important to me that every kid gets to do as much as they can,” said Shealy, who already has received $16,000 in donations or pledges after the nonprofit's first fundraiser Wednesday.

Shealy came up with the idea after Facebook friends kept asking her to give them a way to get involved in helping children. The nonprofit’s name is the same as a backpack program, supplying school supplies and toiletries, that Shealy started while a member of a juvenile justice support group.

“The Ks kind of go together.”

SC Republicans at odds over Export-Import Bank

After the U.S. Senate moved toward reauthorizing the Export-Import Bank last week, U.S. Rep. Mick Mulvaney, R-Indian Land, a critic of the bank that helps companies including Boeing do business overseas by guaranteeing loans, told Roll Call: “Just because the Senate votes on a piece of crap doesn’t mean we have to vote for it.”

That reauthorization was backed by Mulvaney’s fellow congressional Republicans – U.S. Sens. Lindsey Graham and Tim Scott and pushed by the business community, including the S.C. Chamber of Commerce.

Chamber chief executive Ted Pitts, a former Republican state representative, said Mulvaney's comments were disappointing to the S.C. business community. "Being against reauthorization of the Ex-Im Bank is bad for South Carolina jobs. The reality is the bank is a loan program that makes money.”

Critics, including Mulvaney, say the Export-Import Bank is corporate welfare that allows government to pick winners and losers in the private sector and amounts to a taxpayer subsidy.

Greenville representative to help crown next Miss South Carolina

State Rep. Chandra Dillard, D-Greenville, will be on the panel of five judges choosing South Carolina’s next Miss South Carolina from among 55 contestants.

Dillard will represent the field of service, in part, because of her nine years on Greenville City Council and six years in the S.C. House.

The Miss South Carolina finale will be Saturday, June 27, at 7 p.m. at Columbia’s Township Auditorium.

Clemson suit? Traffic cones? (Dueling banjos?)

“Just as a programming note: The ETV broadcast (of the Senate) will be in black and white today. Senator (Ray) Cleary’s coat blew a fuse,” said Senate Majority Leader Harvey Peeler, R-Cherokee, remarking on the bright peach attire of the George Republican.

“He said he was a Clemson man, and I’ve just outshone him today,” said Cleary, an Ohio State grad.

“You’re not foolin’ anybody. That’s in honor of those orange cones you’re going to get in that road bill,” Peeler said.

Staff writer Jamie Self contributed.