The state needs to diversify its transportation revenue, and one way it might do that is by raising the $300 cap on vehicle sales taxes, according to S.C. Chamber of Commerce President and CEO Ted Pitts.
“I won’t say who told me this, but the House may be looking at going from $300 to $500,” said Pitts at a meeting in downtown Greenville Friday morning. That change could generate an additional $75 million per year. Combined with other sources of revenue, it could be a way to generate a portion of the $1.9 billion per year needed by the Department of Transportation in additional road funding, he said.
“If we could get $600 to $800 million a year in the system, that would be a good plan and would be considered addressing some of the need,” he said. “There’s a way to get to $600 million.”
Pitts spoke to a crowd of around 40 people this morning about the state Chamber’s two agenda priorities for the year, workforce development and infrastructure.
“We’re falling further and further behind in maintaining our system and maintaining capacity,” he said. “We believe it’s at that boiling point. Something’s going to be done. Something has to be done.”
The South Carolina Department of Transportation is facing a $42 billion shortfall in funding for state transportation needs. Deteriorated and infrequently maintained roads cost Upstate drivers more than $1,200 more per year due to higher vehicle operating costs, traffic crashes and congestion-related delays, according to a recent report from The Road Information Program.
The state of infrastructure also significantly impacts business within the state, such as forcing transport vehicles to reroute around unsafe bridges and causing congestion-related delays.
Pitts said transportation and infrastructure has been high on the priorities list for several years now. The problem isn’t awareness or support, he said. It’s funding.
“If you look nationally, our revenue for roads is one of the least diverse revenue streams in the country,” he said. “It’s totally dependent on the gas tax with a little bit of sales tax.”
The increasing popularity of hybrid vehicles and generally more fuel-efficient cars has been pushing gas tax revenues down for years, however. The solution needs to be more comprehensive and long-term, he said. “If you just raise the gas tax, we’ll be back here in five years.”
Other options might be increasing drivers license revenues and tolls, but Pitts said he didn’t think those were likely to be significant parts of the solution. Pitts said the Chamber is hopeful that legislation will be introduced and put through conference committee by the end of the year.
S.C. Gov. Nikki Haley is expected to release an infrastructure and transportation plan by the end of the month. Her $6.9 billion executive budget – announced earlier this week – lacked any major increases in spending on infrastructure. Haley said the executive budget would add $61.4 million a year to pay for road repairs.
