Gov. Nikki Haley's Roads Plan: Raise gas tax, lower income tax, reform DOT

COLUMBIA, SC (WIS) - For months, Gov. Nikki Haley has gone on record opposing a gas tax increase, but Wednesday night's State of the State from the second-term governor revealed she has softened her stance a bit.

Calling her plan a win-win, the governor says she'll give her thumbs up to a gas tax increase only if two other options are passed along with it: reforming the state Department of Transportation and lowering the state's income tax from 7 percent to 5 percent over the next 10 years.

Lowering the state income tax appears to be a particular sticking point for the governor and her fellow Republicans. Haley says lowering the income tax rate will put the rate below neighboring states of Georgia and North Carolina.

"It will be a massive draw for jobs and investment to come to our state," Haley said.

As for reforming the Transportation Department, Haley's hope is to scrap the legislatively elected transportation commission so that the state's roads needs are "no longer driven by short-sighted regionalism and political horse trading."

"Simply shipping more money into the current bureaucracy would be like blasting water through a leaky hose," Haley 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."

Finally, Haley reiterated her general stance on a gas tax increase, saying she would veto any straight up increase to the 16 cent tax that has not been raised since 1987.

"That's just not going to happen while I'm governor," Haley said. "It's the wrong thing for South Carolina."

Haley's three-pronged approach was a big hit with fellow Republicans. Democrats? Not so much.

State Rep. Bill Taylor, R-Aiken, applauded the governor's plan.

"Roads is the number one issue in this state," Taylor said. "I hear it all the time from constituents. They don't talk about other issues. They talk about the pathetic roads that we have."

For Taylor, bad roads are bad problems.

"On the roads issue, I couldn't agree more on the three-pronged approach," Taylor said.

State Sen. Shane Massey, R-Edgefield, said the plan to reduce the state's income tax is a good start.

"We're really out of kilter with where we need to be at our income tax," said State Sen. Shane Massey, R-Edgefield. "If we could have some reduction there in exchange for a gas tax increase -- I think long term that is a really good win-win situation."

House Minority Leader Todd Rutherford, D-Columbia, sees Haley's plan very differently.

"This was the most disappointing, almost embarrassing, speech that I've heard," Rutherford said. "Every penny of a gas tax increase comes to about $33 million, so that's $333 million that she would add, but a 2 percent decrease in income tax would come out to about $417 million, so it's a net loss to South Carolina of about $117 million."

Rutherford says there's no room for compromise either.

"She's threatened veto if we don't do all three things at once," Rutherford said.

Rutherford proposes using 2 percent of the income tax strictly for roads.

Meanwhile, one Republican said she'd even support a temporary 20-cent raise in the gas tax to jump start road repairs.

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