Another Gas Tax Increase

H.3445 would impose two new 7 cent per gallon taxes on motor fuels including gasoline. Combined these two new taxes would nearly double the current state gas tax. All of the revenues from these new taxes would be credited to the state highway fund. Each of the new taxes have the potential to expire in 2020 if the Revenue and Fiscal Affairs Office (RFA) determines the current average wholesale price of motor fuel is higher than the average wholesale price of motor fuel over the past 5 years. If the taxes don’t expire in 2020 the RFA will make the same determination in 2025 and every five years thereafter, with the taxes expiring the first time the RFA determines current wholesale prices are higher than the preceding 5 year average.

As the policy council has said in response to other attempts to raise the gas tax, the state doesn’t need more revenue to fix its roads. In order to fix South Carolina roads state government must explicitly prioritize road maintenance work over expansions, and fix its broken road governance structure. Attempts to raise revenue before addressing these issues is throwing good money after bad.

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Category: Legislation, Tax Reform · Tags: