Gov. Nikki Haley said today she has entertained the possibility of lowering her demand for a full 2 percent decrease in the state income tax to offset a proposed gas tax increase to fix roads.
The governor spoke with reporters after a luncheon at the Embassy Suites in Greenville hosted by the Greenville Chamber of Commerce.
Haley said the possibility of a 1.5 percent decrease in the income tax has been part of recent negotiations with House members working on infrastructure legislation. But she said any roads funding plan must include a “massive tax decrease” to avoid her veto.
Haley also said she would not approve any plan that raises the gas tax more than 10 cents. She said representatives and senators have met with her to discuss roads legislation.
“We’re discouraged because both sides are pushing for a big, strong tax increase,” Haley said.
A House committee approved a bill Thursday that tacked an income tax decrease onto a bill created by a House ad-hoc committee that would restructure SCDOT, lower the consumer gas tax, raise the wholesale tax and raise the vehicle sales tax cap from $300 to $500. The State newspaper reported that the income tax decrease would save taxpayers about $48 per year.
A Senate committee has also approved a bill that would increase the gas tax by 12 percent and raise other fees.
Haley has threatened to veto either plan if it passes the General Assembly, but legislators have called on members to ignore the governor’s threat and pass legislation that fully addresses the roads problem. Some lawmakers have expressed fear that a major income tax cut would reduce needed revenue to the General Fund.
Haley said, “If we come to a veto, it’s not going to be about me anymore. It will be about the people of this state, and it’s going to be about how hard they fight to make sure that we don’t get tax increases in this state.” Haley referenced Greenville’s failed tax referendum plan as evidence that South Carolinians don’t want to see tax increases without a substantial tax decrease.
Rep. Tommy Stringer, whom Haley praised at the luncheon, is the primary sponsor of the House bill reflecting the governor’s plan. That plan would restructure the state Department of Transportation (SCDOT), raise the gas tax by 10 cents and decrease the state income tax to 5 percent from its current 7 percent. The bill is expected to raise about $400 million a year in extra revenue for state roads and bridges.
Stringer’s bill has not yet been discussed in committee.
