COLUMBIA, S.C. (AP) - Gov. Henry McMaster suggested Wednesday a way to fix South Carolina’s crumbling roads is to let the Department of Transportation keep more of the state gas taxes currently paid at the pump.
McMaster said raising the 16.75-cents-per-gallon tax is not the answer.
“Most citizens and taxpayers would be surprised to learn that less than half of the gas tax money, to date, actually goes to fixing roads and bridges,” McMaster told reporters. “I think the people of South Carolina are taxed enough.”
According to data from the DOT, much of the required diversions actually do go toward roadwork.
McMaster’s taking a more emphatic tone than last month, when he called an increase a last resort and said he was unconvinced it’s needed. But, unlike his predecessor Gov. Nikki Haley, he issued no veto threat. McMaster declined to say Wednesday what he’d do if proposals advancing in the Legislature reach his desk.
A plan approved last week by the House includes a 10-cent hike over five years. Another that could move to the Senate floor next week includes a 12-cent increase over three years. Once fully phased in, the plans would respectively raise an additional $600 million or $800 million annually.
The House plan specifies the DOT would keep all of the additional money the law would raise.
DOT Director Christy Hall has said an additional $28 billion is needed over the next 25 years to bring the state’s existing highway system - the nation’s fourth-largest - up to good condition. It is primarily funded by the nation’s third-lowest gas tax - unchanged since 1987 - and the federal match money that provides.
The state uses 4 cents of its per-gallon tax to get those federal highway dollars, which on average cover 84 percent of the cost of resurfacing, widening, bridgework and other improvement projects. However, half of the state’s 41,400 miles of roadway aren’t eligible for federal aid.
Laws passed in 2013 and last year provided some funding for those secondary roads, by transferring to DOT $130 million annually in existing vehicle sales taxes and $84 million in Department of Motor Vehicle fees and fines.
McMaster has suggested paying DOT employees’ salaries out of other tax collections, freeing up that portion of the gas tax for roads and requiring cuts to other agencies.
“We’re going to have to go on a diet,” he said last month without proposing specific cuts.
According to the DOT, the salaries and benefits of roughly 3,000 highway maintenance workers are funded by 4 cents of the per-gallon tax - roughly $140 million. Half of that is directly due to increases since 1994 in health care premiums and pension benefits, Hall said. Since the agency isn’t funded by the state’s general fund, it must come up with any legislatively required increases in benefits on its own.
But even if all of the agency’s employees worked for free, their salaries would pave just 2 percent more of the roadways annually, Hall told a Senate panel.
Of the remaining 8.75 pennies, state law requires the DOT to distribute 2.7 cents to counties for local roads. One penny must go to the State Transportation Infrastructure Bank, the agency that borrows and doles out money for large highway projects.
Roughly 3 cents pays for materials and contracts for daily maintenance such as pothole patching, signal repairs, and mowing, according to the DOT.
Over a penny of the per-gallon tax is distributed to other agencies. The budget to be debated on the House floor next week lets the DOT keep some of that, by using other state taxes to directly provide those agencies $5 million for gas pump inspections, welcome centers and DOT auditors.
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