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Sunday, April 16, 2017


The free lunch bunch

By Tom Sullivan

Image via Lexington County Chronicle.

When the subject is how to pay for new or expanded social safety net programs, fiscal conservatives enjoy schooling liberals that there is no free lunch. In South Carolina, the Republican-led legislature has spent two years trying to find one.*

On January 10, the Charleston Post and Courier opined on this object lesson in non-governance:
Today opens a new session for the S.C. General Assembly, but much of its business dates from previous years, even previous decades. The longest running debate is over the state’s gas tax, which hasn’t been increased for 30 years. And the state’s roads show it.

The Legislature has acknowledged highway funding shortcomings in past years with half-measures, including last year’s $2 billion, 10-year repair plan aimed primarily at substandard bridges. But that would meet only a fraction of the highway funding shortfall, estimated at more than $1 billion a year.

A hike in the 16-cent gas tax would provide a regular, dedicated source of increased funding. South Carolina’s gas tax is the second lowest in the nation, even though we have one of the largest state-maintained road networks.
South Carolina's House Speaker Jay Lucas, a Republican, described the roads as "the most dangerous roads in the country."

South Carolina had hopes for an infusion of federal money in December. In early February, Gov. Nikki Haley's replacement in the governor's mansion, Henry McMaster, sent a letter to Donald Trump asking for $5 billion in federal money for roads. He's still waiting. A House subcommittee passed a measure the same week that would raise the gas tax by 10 cents over 5 years, saying they were "this close" to getting the job done. One of the state's outnumbered Democrats spoke for the reality-based community:
While a lot of people hate the idea of a tax increase, Sen. Thomas McElveen, D-Sumter, says, “There’s no way to get this done in a revenue-neutral way. And so I ask people all the time, if there’s something that we can cut to come up with these sorts of funds that we know we need to have, tell me what it is. Tell us all what it is, because we sure can’t find it.”
Gov. Nikki Haley promised to veto a gas tax increase that did not include an even bigger tax cut.

The bills still come due

Everyone knows the roads desperately need fixing. None of these fiscal wizards want to pay for it. Because that means taxes. Taxes, if you haven't heard, are bad. Heretical, if you are a Republican raised on conservative anti-tax catechism, no-new-taxes pledges, and charged with upkeep of a single state or an entire country.

Rather than biting the bullet and paying the bill that finally has come due, McMaster wants to avoid running for re-election as the governor who raised the gas tax for the first time in 30 years. He wants the state to borrow $1 billion dollars instead. That would pay for one year's worth of 20 years of needed repairs. His colleagues don't like the idea:
“The fact that we would borrow the funding to pay back on a later date is somewhat problematic,” says House Majority Leader Rep. Gary Simrill.
Paying at a later date is how loans work, Simrill thinks you should know. Meanwhile, McMaster threatens to veto any bill that raises the gas tax.

To recap, loans: bad. Taxes: bad. For two years South Carolina's Republican leaders have been looking for a way to fund repairing roads they let fall into disrepair since the Reagan administration. They still can't find one that doesn't include someone in South Carolina paying for lunch.

Republican State Sen. Greg Hembree introduced his better idea last month: get somebody else to pay for it.
“You’ve got a net tax cut to South Carolinians,: Hembree told reporters. “You fix the roads permanently. You restore money to the general fund and you increase funding to education.”

Hembree said the gas tax increase by two cents per-year until 2025 would target a large number of out-of-state drivers who use South Carolina roads. “So we capture those out-of-state taxpayers, the ones using our roads and not paying their fair share, we scoop them up with the gas tax,” he said.
And if you order before the next bridge collapse, you also get a set of steak knives. No wonder Donald Trump is so popular there.

* I spend my work week in South Carolina and hear local news there.

Update: Left out a "not" ahead of Haley's "even bigger tax cut."