Raising the Gas Tax by 10 Cents

H.3262 would impose two new “user fees” of 5 cents each to increase the overall state gas tax by 10 cents. The revenues generated by these new taxes would be credited to a “county road transfer fund”. The fund in turn would apportion monies to the various counties based on the “ratio of non-federal aid state road miles contained within (a) county divided by the total miles of all non-federal aid roads under state control as of July 1, 2015.” Once a county transportation board certifies it has enough funds to maintain or upgrade a non-federal aid state road to good condition, the Department of Transportation (DOT) will transfer that road to county control.

The bill would also allow taxpayers to claim a state income tax credit for the new “user fees” worth $50, provided the taxpayer drove at least 5,000 miles in South Carolina over the past year.

Transferring some state roads to county control is a sound policy proposal, but the state doesn’t need to impose new taxes to enact this policy. South Carolina has the money it needs to maintain its roads, but much of it wasted on unnecessary road expansions incentivized by federal funding formulas, and approved by unaccountable DOT and Infrastructure (STIB) Boards. The state should transfer some of the roads it controls to counties but it should do so along with a portion of the revenue it generates from the current gas tax. Increasing the gas tax without addressing South Carolina’s road governance problems is akin to pouring water into a leaky bucket.

(Related H.3263)

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