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SC Gas Tax Predictions




For the past three years, many South Carolinians have been demanding that their elected leaders “fix their roads.”  And as we’ve noted in years past, that’s not an unreasonable request.

Somehow this simple message got distorted, though …

“Fix our roads” has been interpreted by members of the S.C. General Assembly to mean something quite different.   Specifically, they’ve taken the request to mean …

Raise our taxes and hike our fees (whether we can afford it or not) and dump every penny of this money into unaccountable bureaucracies and corrupt slush funds that further explode our debt and blow our money on political projects and crony capitalist giveaways – all while denying us a direct line of accountability over how this money (our money) is being spent.

Because that’s exactly what happened in Columbia, S.C. this week.

It’s not just that “Republican” lawmakers raised taxes – or that they did so during a budget year that has continued state government’s recent trend of explosive spending growth.  It’s that they raised taxes in the worst possible way – rejecting long-overdue structural reforms while inviting additional deficit spending.

Seriously, we’ve seen email offers from princes in Nigeria likely to produce a better return on investment than this new law.

This website has spent the last three years opposing various iterations of this tax increase, arguing ad nauseam that the “more money, no reform” route was not the way to go.  Lawmakers didn’t listen, though.

So now it’s time to lay down some markers …

To be clear: Every single one of the 127 members of the S.C. General Assembly who voted for this tax hike now owns it.  In other words, each one of these lawmakers are directly responsible for what happens next.

What happens next, you ask?  Here are our predictions …


(Via iStock)

1. MORE CORRUPTION … Powerful legislative leaders will continue to game the system and profit from the proceeds of our poorly prioritized infrastructure delivery system.  Want to know why S.C. Senate president Hugh Leatherman was smiling so broadly after this tax hike was passed?  Here’s a hint …

2. MORE WASTE … Taxpayers will continue to subsidize interchanges to nowhere, unnecessary big-ticket projects and political pork.  And these projects will continue to drain hundreds of millions of dollars from critical infrastructure needs.

3. MORE DEBT … By flouting the state’s constitution and referring to the gas tax as a “user fee,” lawmakers have opened the floodgates to tons of new deficit spending (on top of previous borrowing bills).  Even worse, this new debt isn’t going to be incurred on behalf of long-overdue paving and maintenance projects – it will go instead toward new projects of dubious public benefit.

4. MORE LAWSUITS … The last borrowing bill to play fast and loose with the constitution drew a court challenge – and with good reason.  Our guess is this one will, too.

5. MORE TAX HIKES … Despite huge increases in new recurring funding for the S.C. Department of Transportation (SCDOT) and billions of dollars borrowing from the State Transportation Infrastructure Bank (STIB) … and now a $600 million a year gas tax increase to boot … make no mistake: The drumbeat for additional revenue is never far off.  Our guess is it will begin to be heard once again as early as 2019, with a target date of 2021 for the legislature to try and impose additional fees and taxes.

6. BETTER ROADS? … Again, you would think the imposition of such a massive tax increase would translate immediately into widespread, noticeable improvements in the roads and bridges South Carolinians traverse on a daily basis.  Unfortunately, recent spending increases and debt hikes didn’t do that – nor is this new law likely to accomplish such improvements given its failure to address the root problems with our state’s infrastructure funding mechanisms.  We’re not saying it won’t fix some roads, but it’s not going to make the sort of impact its supporters are promising their constituents.

7. ECONOMIC HARDSHIP … We’re hopeful that the national economy (which is currently stuck in a rut) will begin bouncing back sooner rather than later.  Even if it does, though, South Carolina has consistently lagged behind the rest of the nation in employment and income levels – and this tax hike will hit people who can’t afford it the hardest.  That will create a corresponding drag on the consumer economy, which will only be compounded in the event the national economy enters another recession.

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