South Carolina Gov. Nikki Haley will approve a tax on gas if state lawmakers will agree to a cut in the state's income tax,
Greenville Online reported.
Although Haley, a Republican, had steadfastly said no to a gas tax hike, she suggested a solution that would allow for one to fix ailing roadways while encouraging future business through an income tax drop, saying it would be "a massive draw for jobs and investment to our state."
Her proposal, offered in Wednesday's State of the State address, allows for a 2 percent income tax reduction, to 5 percent from 7 percent, in exchange for a 10-cent per gallon gas hike over three years. The whole deal is contingent, however, on a complete overhaul of the state Department of Transportation, removing its board, which is elected by legislators, Greenville Online said.
"This is a three-part package deal," Haley said. "In order to get my signature on any gas tax increase, we need to restructure the DOT, and we need to cut our state income tax by two percent. If we do all of those things, we will have better roads and a stronger economic engine for our people. That is a win-win."
She pushed back on selecting the state's DOT board by legislative delegations, noting the statewide divisions such a measure has created.
"Simply shipping more money into the current bureaucracy would be like blasting water through a leaky hose," she said. "Some of it would reach the right destination, but too much of it would end up in a mess on the ground. I won't do it."
Previously, Haley had strongly opposed a gas tax hike, which stands at 16 cents on the gallon — a figure in place since 1987,
The State reported. It is one of the lowest in the nation. Each penny increase would give the state about $34 million in extra revenue.
Democrats were angered by Haley's suggested tax swap, the State said.
"I'm a little concerned that we may be robbing Paul and Peter to pay Patrick," Democrat state Sen. Joel Lourie of Richland said of her idea, adding that lowering state income tax by 2 percentage points would slash "general fund money that we're going to need to fund education, to fund teachers salaries (and) to fund healthcare," the State reported.
Added House Minority Leader Todd Rutherford, also a Richland Democrat, to The State: "I don’t know how she’s doing her math. I’m confused, and I don’t know how that’s going to fix a single road."
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