South Carolina Legislature Says “Yes” to Gas Tax Increase

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For the first time in 30 years South Carolina will increase its gas tax.  With a resounding veto override South Carolina joins California, Indiana, Montana, and Tennessee as the 5th state to raise the gas tax in 2017 and 22nd state since 2013.

The package was a few legislative sessions in the making and the result of the swift work of a late-session conference committee. Upon receiving the gas tax bill on May 9, Governor McMaster issued a veto expressing his belief that the state had sufficient funds to maintain its roads.

The South Carolina Department of Transportation recently estimated it needs nearly $1 billion annually to effectively repair and maintain its roads. As approved by the legislature the bill has the potential to raise an estimated $640 million annually in recurring revenue for road repair and maintenance.  While this does not fully meet the existing funding gap it is a step in the right direction towards improving South Carolina’s roads.  The details of the roads plan are as follows and are further explained on the Transportation Investment Advocacy Center blog:

  • Gradually increasing the state’s fuel tax by 2 cents-per-gallon annually over the next six years, beginning July 1 (12 cents-per-gallon total, resulting in a state gas tax rate of 28 cents-per-gallon);
  • Instituting a $120 fee for vehicles powered by anything other than motor fuel and $60 fee for hybrid vehicles;
  • Increasing biennial registration fees for passenger motor vehicles by $16;
  • Creating an ‘Infrastructure Maintenance Fee’, charged on the purchase of motor vehicles and capped at $500 (replacing the current $300 sales tax on motor vehicles);
  • Instituting a $250 one-time fee for motor vehicles transferred from another state; and
  • Charging out-of-state commercial truckers a fee based on miles driven annually within the state.

As means of easing the increase in price at the pump, the bill also included a number of tax cuts. Among those included are an earned income tax credit, two-wage earner tax credit, tuition tax credits, and manufacturing, business, and personal property tax reductions.

ASCE applauds the legislature for approving the additional funding necessary to operate, maintain, and improve the South Carolina’s transportation system.

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