Taxes on gasoline and other motor fuels are effectively user fees; motorists pay for using roads when they purchase gasoline or diesel fuel. In South Carolina, a healthy share of the total MFT revenue is collected from tourists.
One may reasonably argue the gasoline tax is regressive because all motorists pay the same rate, creating an economic burden on folks financially less well off, but the fact is all motorists pay their fair share. Increasing the rate per gallon for the first time in three decades should be as straightforward as the gasoline tax.
However, when gubernatorial politics are injected into an issue, the difficulty factor increases. Here’s the score on the 16-cents-a-gallon gasoline tax: The S.C. House of Representatives in March passed a roads bill, including a 10-cent gas tax increase, by an overwhelming, bipartisan vote of 97-18. The measure is pending in the Senate. Last week, Gov. Henry McMaster threatened to veto the bill if and when it reaches him.
So much for many legislators’ optimism that McMaster would be more reasonable, more likely to cooperate with legislators, than Nikki Haley. Now the nation’s ambassador to the United Nations, Haley as governor opposed increasing the gas tax – to the extreme of being personal toward Republican legislators – although she did approve borrowing money for highway construction and repairs.
House Speaker Jay Lucas properly notes that McMaster would continue a poor pattern of borrowing to fix roads, which places the cost solely on S.C. taxpayers “... and not on out-of-state motorists who use and deteriorate our crumbling roads. Borrowing more money ... will not serve as a permanent solution to our infrastructure crisis.”
Until last week, McMaster played coy about legislative priorities, saying, as one would expect from a candidate, that any tax increase should be an absolute last resort. Well, of course. Rather than increase the measly gasoline tax, borrow money – a whole lot – through a bond bill for overdue repairs to university and other state buildings. Fixing state buildings is “very important, but not urgent,” McMaster proclaimed, roads are urgent because of their link to commerce and safety. He wants to tell voters in 2018 that he stopped a tax increase.
Make no mistake, the 2018 gubernatorial campaign is in full swing. McMaster was in the Myrtle Beach area on unofficial (campaign) business the day before his veto threat. On the same day, Catherine Templeton formally announced her candidacy for the Republican nomination, opposing McMaster. Templeton was Haley’s appointed director of the Department of Health & Environmental Control and the Department of Labor, Licensing & Regulation.
In the Senate, other complications must be resolved, including a proposed 12-cent increase from the Finance Committee. Some senators are blocking debate, for no better reason than knee-jerk opposition to a tax increase. Some senate and all house seats have elections in 2018. That’s why a reasonable gasoline tax increase must be approved this year and sent to the governor – with a margin large enough to override McMaster’s promised veto.