Dear Members of the South Carolina General Assembly,
On behalf of National Taxpayers Union’s (NTU) South Carolina members, I strongly urge you to pass Governor Haley’s transportation and tax reform package contained in her 2016-17 Executive Budget. As you return to work in the General Assembly, a number of high profile issues confront you this session, perhaps none more consequential than fixing the Palmetto State’s crumbling roadways. Last fall’s “once in a century” rains that ravaged the Midlands and Low Country further exacerbated the decline of the state’s infrastructure. Following former White House Chief of Staff and current mayor of Chicago Rahm Emanuel’s famous exhortation to “never let a serious crisis go to waste,” certain political leaders in South Carolina want to use the recent tragedy to grow the size and costs of government. This would be a mistake.
Despite the constant drumbeat of those clamoring for a simple gas tax hike to solve the infrastructure problems in the state, there is a more sensible approach available to legislators. In her 2015 State of the State address, Governor Haley laid out three part plan that is worthy of your support.
First, the Governor’s plan cuts the income tax by two percentage points over the next decade. South Carolina is burdened with extremely high marginal tax rates, especially compared to its southeastern neighbors, the states with whom it competes for jobs and capital. The Governor’s Fiscal Year 2016-17 Executive Budget estimates that the first of a ten year phase down of the income tax would provide over $131 million in tax relief to hand working South Carolinians. Concerns about the state’s ability to pay its bills in the future are overblown and recent revenue projections belie opponents’ positions. With a $1.2 billion surplus this year, it is clear that taxpayers deserve relief.
Next, the Governor’s plan would eliminate the outdated Transportation Commission, the commissioners of which are appointed by legislators. This prioritizes parochialism over statewide needs. Though the Governor nominates the Secretary of Transportation, the Commission sets policy. The Secretary’s role is ministerial – executing policies established by the Commission. The Commission ought to be abolished and the Governor should appoint a Secretary who would be confirmed after proper vetting by the Senate. This would improve the efficiency and accountability of the system while being consistent with the proper functions of the legislative and executive branches of government.
The final prong of the Governor’s plan is a 10 cent per gallon tax increase phased in over a period of three years. It is estimated that this increase would bring in $49 million in additional revenue for a revitalized transportation system. But increasing the gasoline tax alone should not be an option; the gas tax hike must be contingent on cutting the income taxes.
The General Assembly has a golden opportunity to grow the economy and modernize its transportation system as part of the package laid out by the Governor. Accordingly, NTU strongly urges you to pass the Governor’s plan as presented.
Policy and Government Affairs Manager