Statehouse Update: Gas Tax Hike in the Senate
Today the Senate continued yesterday’s debate of the gas tax bill, which raises the gas tax by twelve cents per gallon (up from the ten-cent hike passed by the House) to “fix roads.” While the House version included some elements of reform, the Senate Finance Committee stripped everything but the tax and fee increases.
The debate today centered on an amendment that would add tax cuts to “offset” the gas tax increase. How will that work? In a nutshell, the amendment tweaked the income tax brackets, but those adjusted brackets kick in only if government revenue grows. The amendment also includes an earned income tax credit, ostensibly to provide relief to low-income South Carolinians who don’t pay income taxes. Whatever form they end up taking, these tax offsets will work about as well as tax-swap schemes usually do. They may be revenue-neutral to government, but they are never cost-neutral to the taxpayer.
Of all the amendments debated today, only one attempted even a partial reform – but even that amendment kept the tax hike. What we didn’t see today was a real focus on the things that matter most to the people of South Carolina – reforming the broken, corrupt transportation system and shifting the power from lawmakers to the people. So far there have been no efforts on the Senate floor to eliminate the unaccountable DOT commission and make the DOT a cabinet agency accountable to the governor or to eliminate the notoriously wasteful and corrupt State Transportation Infrastructure Bank.
What you did hear today if you tuned into the debate was a lot of rhetoric. For instance, one Senator argued that the tax hike is so small citizens will hardly feel it at all – about the cost of one soft drink per week. On the other hand, Senators also claimed that the tax increase is possibly the largest economic development project the state has had in years. Why? Because apparently this tax hike is going to rebuild the road industry. Which makes sense when you think about it, because the most powerful lawmaker in the state and more than one DOT commissioner (plus many of the lobbyists pushing for the tax hike) are a part of that road industry.