I have been asked by many for my feelings about the State of the State address that was delivered by Gov. Nikki Haley on this past Wednesday evening. I will preface my remarks by saying that there is a difference in pointing fingers at or bashing someone as opposed to having philosophical disagreements.
As an elected official, I am aware that you are not going to agree with any one 100 percent of the time, regardless of political parties, geographical boundaries, etc. Differences of opinions has led to many great decisions and ideas over the years and decades.
Having said that, my immediate thought at the end of the speech was that it lacked substance. Many great ideas were mentioned without any mention of how to get them done and how to pay for them.
For any of us, myself included, it is good for us to have ideas and proposed solutions to the problems that our state faces and the issues that need to be addressed. In my opinion, the biggest issue that needs to be addressed is the horrible condition of our highways, roads and bridges.
The honest reality is that there is no way to rectify this situation without a new revenue source or an increase in existing revenue. The fact is that at least 40 Billion Dollars is needed over the next two decades to fully address this problem. Our general fund budget is about $7 billion and it takes every penny of that money to fund the core functions and responsibilities of state government.
Even with that we are not fully funding public education and local government to the extent required by statute. Keep in mind also that it is going to take additional funding to fix some of the issues that we have at some off our state agencies, particularly DSS. While more money is not always the proper fix, it has been well documented and everyone agrees that DSS will require more money and more full time employees to adequately address their problems.
Every year during budget deliberations we have to make tough choices in reference to competing demands for state revenue.
Anyway, many options have been and are being considered that will provide revenue for our highway infrastructure. A few of these options involve an increase in the gas tax and research has shown that most South Carolinians are in favor of this. From day one, the Governor has been consistent that any bill that increases the gas tax will be vetoed by her.
That has been her consistent position at least until her recent State of the State address where she now states that she is in favor of an increase in the gas tax based on two conditions. To me that presents a couple of concerns. I feel that our highway needs are so great that fixing them should be the result of an unconditional option. To tie this top priority need to anything will only delay this problem more.
The condition of our roads and bridges is a danger and safety issue, it’s costly to our citizens because of increased car repairs, and it is an economic development issue, especially if we listen to the comments of the CEOs of some of our major industry. This problem needs to be addressed now and we should seek a ‘straight up option’, one that is not tied to any other conditions.
Governor Haley also indicated that she would not agree with a gas tax increase without first having meaningful reform of S.C. Department of Transportation (DOT). I think that decisions that have been made by the DOT Commission is the reason why roads are much better in certain parts of our state as compared to other parts, especially the more rural region.
The Governor also requires a decrease in the state income tax from 7 to 5 percent. While I am sure that this sounds good to many, I don’t see how it is possible. I agree that we should always find ways to allow taxpayers to keep more of their hard earned money but when we discuss plans to do this we must also explain how we are going to pay for it.
Here are the facts. South Carolina has the 42nd lowest tax burden per capita in the United States. The decrease in the income tax plan that the Governor supports means that 379 taxpayers out of 2 million in S.C. will receive $145,000.00 annually. These are the folks whose taxable income is over $2 million.
About 150,000 citizens with taxable income between $30,000 and $40,000 will receive an average of $948. One million taxpayers, mostly senior citizens, will receive no benefit for the reduction in the income tax. Reducing the income tax from 7 to 5 percent and raising the gas tax by ten cents will result in a $1.8 billion loss in the state’s general fund according to the Chairman of the Senate Finance Committee.
How do we make up that amount of money, which is about 25 percent of our general fund dollars, especially since we will still have to fund other state programs including education, healthcare, mental health, public safety, etc.?
We have many important issues to deal with. We can’t plan on funding one at the expense of the other. Most people who have contacted me are in favor of increasing the gas tax (one of the lowest in the nation) in order to fix our roads. Research has shown that nearly 40 percent of this much needed revenue will come from residents of other states who travel on our roads on the way to their destinations.
While I agree with the Governor on a modest increase in the gas tax to address this pressing need, I respectfully disagree with the income tax swap because it will cause problems with funding for other functions of state government.
I am sure that all of us will also keep an open mind on any other option that is presented that will help improve the quality of our roads and bridges.
