By Paul Gable
The S.C. House plan to fix roads is still in the planning stages, but the politics in it resembles the best thoughts of Niccolo Machiavelli.
Rep. Gary Simrill, R-York, will, reportedly, introduce the plan next week. Simrill chaired a special committee over the summer and fall that developed the plan.
Highlights of the plan include lowering the state’s gas tax at the pumps from its current 16.75 cents to 10.75 cents, but it would add a six percent sales tax to gas sales at the wholesale level. Not only would the wholesale tax be passed on to the consumer by being added to the price of gas at the pump, but it would increase overall gas taxes paid by the end consumer. (If you reduce a tax by 6 cents, but add back a 6 percent tax, any price over $1 per gallon results in a tax increase. Low as gas prices are right now, they are still considerably more than $1.)
The combined tax increase (retail gas tax plus wholesale sales tax) would be capped at 26.75 cents.
Why not just raise the gas tax and be done with it? Because this way the total amount of the tax increase can be hidden from much of the public.
In addition to raising the gas tax, the Simrill plan increases maximum sales tax on car purchases from the current $300 to $500. A maximum $500 sales tax on a new Mercedes, BMW or Lexus is still quite low, with respect to the purchase price of the car.
What it does though is increase sales tax on the low end used car buys. Under the S.C. House plan, the sales tax doesn’t max out until the cost of a car reaches $10,000, up from the current $6,000.
The S.C. House road plan, if passed as now proposed, increases taxes but shunts the effects of that tax increase toward the lower end of the income scale. What else would we expect from S.C. legislators?
But that’s not the most Machiavellian part.
The S.C. House plan seeks to shift maintenance costs from the state to the counties on nearly 50% of the overall miles of roads currently maintained (or not) by the state.
Because that proposal met with considerable ire at the county level, Simrill, reportedly, now wants to make the shift of roads to the counties optional.
The counties will be asked to assume maintenance costs for the same percentage of state roads, but they will have the chance to opt out.
To sweeten the deal, the S.C. House plan proposes to increase the amount of state gas tax returned to the counties who opt in and take over maintenance of current state roads.
Currently, the state returns approximately 2.66 cents per gallon of gas tax back to the counties based on a complex formula of road miles, population and the like. These are called “C” funds.
For counties who opt in to the S.C. House plan, “C” funds would eventually be increased from the current 2.66 cents per gallon to 6 cents per gallon with a proviso that all counties who opt in would receive $1 million in extra transportation funds in the first year of the plan.
But “C” funds are disbursed by County Transportation Committees in most counties in the state. The committee members are appointed by the county legislative delegation and have no obligation to give the money to county governments.
Through the years, CTC’s have given “C” fund money to those with the most political pull for special interest projects that don’t benefit most taxpayers.
For example, in the past those funds have been used to pave what are essentially private driveways to private hunting clubs, build sidewalks and bike paths in exclusive neighborhoods and build boat ramps.
Pity the poor county that opts in to the S.C. House plan, then, watches its CTC use “C” fund money for everything but road maintenance.
Any plan is a start, but the S.C. House plan needs to remove Machiavelli from this current proposal or it will be business as usual for S.C. roads.