S.C. business leaders support gas tax boost but not sure how much

COLUMBIA — South Carolina business leaders said Wednesday a gas tax increase is a necessary part of any legislative funding solution for crumbling state infrastructure.

S.C. Chamber of Commerce President Ted Pitts said the pro-business organization has not endorsed a specific increase to the current 16.75 cents per gallon tax on motor fuel that funds roads and infrastructure. But an increase is needed to boost roads budgets by $600 million a year, he said.

“We ask our leaders to make sure that they’re not solely dependent on gas taxes or recurring revenue,” Pitts said during a media conference in the Statehouse lobby. “Gas consumption is going to go down, so we think this revenue stream needs to be diversified.”

Instead of a gas tax increase, opponents say, using some of the additional $1.2 billion coming to state coffers will be enough to cover needs, which are estimated by the state Department of Transportation to be $1.5 billion annually. That number is disputed by gas tax opponents, who say reforms to the DOT Commission and its spending process need to occur before more money is sent to the agency.

A $400 million funding bill with a 10-cent gas tax boost, along with increases to some vehicle fees and a $48 income tax break, passed the House early last year.

In the Senate, a $700 million proposal still alive from last year would raise the gas tax 12 cents and significantly increase similar vehicle-related fees. The Senate bill didn’t include any DOT reforms or a 2 percentage point income tax reduction to offset the gas tax increase, as Gov. Nikki Haley has proposed.

A proposal by several Republican senators would add DOT reforms and a 1 percent tax cut in the income tax rate over five years to the current Senate bill. Reform and tax relief are seen as vital to the funding bill’s passage. The bill remains in a priority position for debate when session starts Tuesday.

The chamber supports a lower income tax rate but doesn’t include it as part of its proposal.

Other chamber members and business owners, such as Mikee Johnson of the Orangeburg-based Cox Industries, joined Pitts in rolling out the organization’s legislative agenda. Johnson backed up the contention that reform to the DOT is also a critical part of any legislation.

The Charleston Metro Chamber of Commerce is supporting passage of the House bill to help cover the $42 billion needed to repair and maintain the state’s roads.

“We are advocating for the Senate to pass that bill and come up with a solution,” said Mary Graham, the Charleston chamber’s chief advancement officer. Graham said the Charleston chamber has been working with other state and local chambers to lobby for the bill.

Johnson and some lawmakers say that governor appointments to the DOT Commission, which is the agency’s governing body, rather than by legislative delegations, will increase accountability. Such reform is part of a current proposal in the state Senate.

“If we don’t change that model, we’re not going to fix our long-term succession story on how to fix DOT,” Johnson said.

The Columbia-based chamber also wants better workforce development initiatives and a more streamlined business licensing process to be approved by lawmakers this year.