I’ve been hearing a lot over the past few days about Governor Haley’s “plan” to fix our roads but the “plan” that was sent out via email seems to be more of an “idea” or “summary” rather than an actual plan. Maybe there’s more somewhere, but based on what little information is provided in this email, she wants all of us to call our legislators and insist the pass a gas tax immediately. Forgive me for my confusion, but didn’t we see the Upstate of South Carolina littered with these signs less than 90 days ago?

HaleyNoTaxSign

Here is the meat of the email Haley sent out:

We proposed three things that, if we do them all at once, will be a win-win-win for South Carolina.

1) Cut our state income tax rate from 7% to 5% over the next decade. That’s a nearly 30% reduction in state income taxes. It will put more money in the pockets of every South Carolinian, letting them keep more of what they earn and put our rate back below those of North Carolina and Georgia.

2) Change the way we spend our infrastructure dollars and get rid of the legislatively elected transportation commission so the condition of South Carolina’s roads is no longer driven by short-sighted regionalism and political horse trading, and we stop wasting our tax money.

3) Increase the gas tax by ten cents over the next three years and dedicate that money entirely toward improving our roads. That will keep our gas tax below both Georgia and North Carolina, and we can do it without harming our economy, because when coupled with the 30% income tax cut, it still represents one of the largest tax cuts in South Carolina history.

This is a three-part package deal.

Again… and maybe its just me… and I admit I’m always a bit leery of a politician proposing tax swaps… but I’m also confused by the sense of urgency and the statement “if we do them all at once” directly followed by the tax cut portion taking place “over the next decade.”

It then occurred to me that she hit on this same topic the previous year in her State of the State address, so rather than paraphrasing, we pulled her speech and found she had this to say just 12 months ago:

“Last year, using revenue we already had, we were able to pass into law the largest investment in South Carolina’s roads and bridges in more than two decades. A billion dollars. And we did it without raising taxes.

South Carolinians are about to see orange cones popping up all across our state. It’s a beautiful thing.

And I want to thank Chairman Brian White and Senator Harvey Peeler for helping make that happen.

But we know there’s more work to be done.

You might ask the question, “How do we pay for it?”

And my answer will be, “Not by hiking taxes.”

We proved last year that we can invest in our roads and bridges with the dollars we already have. Raising the gas tax — forcing our people and our businesses to pay more for the simple act of getting around — is not an option for me.

I will veto any bill that reaches my desk that raises taxes on gasoline.

Unlike during the recession, this is a good budget year, with enough revenue coming into Columbia that will allow us to make smart new investments in education, roads, and public safety.”

The thing is, we would support lowering income taxes as a means of spurring growth and economic development, but that needs to happen first and happen immediately, not have something drag out over ten years which could be overridden or discarded somewhere along the way. We have already seen how the legislature chooses to suspend mandatory funding laws when it comes to the budget.

We would also support a consumption tax over an income tax, but that doesn’t mean swapping out for a gas tax is a good idea. With a consumption tax everyone gets to pay in regardless of where or how they get their money which is far better than continuing to punish those who work and earn. BUT, even in moving to a consumption tax, if I were to argue any exemptions from taxation, I would argue in favor of exempting food and fuel/energy. I know some want to go with a flat tax that has subsidies, but if food and fuel are the exempted then we should be able to take the subsidy argument off the table. SO, an increase in a gas tax is just a bad idea any way you slice it.

Also, if the governor simultaneously asks for hundreds of millions of dollars more each year for Medicaid expansion by her HHS department and tens of millions more in K-12 education spending for her legislative initiatives, then she needs to show us how that balances out.

If we correctly understand what her plan would actually do, it appears it only raises a little more than $300m per year for roads. But, SCDOT tells us that they $1.4B per year. So it would help if Governor Haley can show us why her SCDOT is asking for over four times more than she says that they need as that is quite a discrepancy.

Bottom line; Haley needs to offer details of reform. It would also be nice for her to explain why she doesn’t fully fund Education in her executive budget since it is required by statute. If the penny raised for EFA in 1984 is being spent elsewhere, and she condones it, how can she trust her plan to be carried out years from now after she is gone? None of what she proposes seems realistic…