House Road Plan Debate – Snatching Defeat from the Jaws of Victory

An edited version of this piece originally ran in The Greenville News last Sunday. The following has been expanded over the newspaper version.

In spite of being firmly in the 21st century, South Carolina’s political history remains contemporary and constant with us.

Our compulsion to stumble over our past becomes magnified in the actions of the General Assembly. To the political novice, some elected members seem almost bit players on a stage set by regional conflict and directed by an ancient fealty to an older one partyism. Ideological belief makes little difference, except to a few character actors, and to others, Republican Party membership means little more than belonging to the guild.

Our legislative session started in January with new House leadership and a Governor fresh from a decisive second-term election. Some in state politics thought that an era of good feelings might emerge. An era where the age-old rivalries between the Governor and General Assembly would be banished for a season and long overdue promises of Republican solutions might finally be delivered.

Instead, we have endured weeks of public rancor between the General Assembly’s leadership and Governor – all Republicans. They have disagreed over issues as varied as ethics reform, bond indebtedness and, most important to the average citizen, a plan to fix our roads.

The rancor culminated with a suggestion from our Governor that anyone dealing with the General Assembly should take a good shower afterwards. Some members felt the honor of their positions had been insulted. Maybe we should refer those members to the 1838 edition of The Code of Honor written by former South Carolina Governor John Lyde Wilson. At least the old code duello might keep comments off of Facebook.

In this self-inflicted political tension, the South Carolina House will begin debating legislation to repair our roads. Using the plan developed by the bi-partisan House transportation study committee, the debate will cover several important areas – who will oversee our Department of Transportation (SCDOT), how much new revenue does SCDOT really need, who will pay the additional revenue, and will our workers receive any offsetting income tax relief.

Though better late than never, the General Assembly should have found a solution to this crisis before our roads fell into such disrepair and before we accumulated a significant unfunded liability in the form of deferred road maintenance. The SCDOT estimates that $21 billion in additional tax revenue will be needed over the next 20 years – or $1 billion per year – to bring our roads up to a good condition.

The bi-partisan plan does not adequately reform the oversight of SCDOT. Effective oversight cannot be accomplished using a commissioner-influenced system. The Governor should have the authority to appoint a Secretary of Transportation who reports directly to her and who can reform SCDOT into a 21st century transportation agency. A group of legislatively controlled commissioners can only muddle the reforms.

The Governor should be held accountable by the General Assembly for all revenue, including any new taxes, spent by SCDOT. Our roads crisis demands some increase in revenue to reverse our slide into complete decay. SCDOT may need more in the future, but it would be fiscally foolish to give them an additional $1 billion per year before the Governor presents a reform plan. Our current Secretary of Transportation has said that an increase of $400 million per year would allow SCDOT to bring our current system up to an acceptable condition without initiating any new projects.

The bi-partisan plan cuts the gas tax and shifts the difference to a sales tax based on the wholesale price of gas. In effect, it shifts revenue from a stable, fair and visible revenue stream to an unstable, unfair and hidden revenue stream. Our roads system receives the vast majority of funding from our gas tax. It was last increased 25 years ago to 16.75 cents per gallon. Inflation and an expanded road system have devalued the effectiveness of the current tax rate. Increasing the current gas tax by an additional 10 cents per gallon tax would raise around $400 million per year. It would be politically foolish to pass a confusing tax swap when a simple increase in the gas tax would yield an adequate amount of revenue.

The bi-partisan plan offers a nominal amount of income tax relief – about $48 per filer – to offset the road tax increase. We have an unfair and antiquated tax system. Our sales tax system has over 80 exemptions for various groups and industries. We actually exempt more revenue than we collect. The income tax structure allows 40 percent of those who file an income tax return to pay zero taxes. These two systems shift most of our overall state tax burden to our working population. The tax swap provision in the bi-partisan bill forces our workers to shoulder even more of the tax burden and further confuses our tax system. Having never benefited from any meaningful income tax relief, our workers deserve more than a $48 reduction.

During her State of the State address our Governor communicated a simple plan to repair our roads. It included a gas tax increase, meaningful income tax relief and a governance plan to increase oversight of SCDOT. She promised to work with the General Assembly, and more pointedly, members of her own party, toward finding common ground and to not veto the final bill if common ground was reached. As the House considers amendments to the bi-partisan plan, we should remember that success will be much easier if we work with our Governor to create that Republican era of good feelings that has eluded us so far.

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