MY LAST NERVE: How That Tax Hike Happened

April 17, 2015

Inside Insight

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tax hike and roads

SORRY, PEOPLE, WE COULDN’T FIND ANY MONEY IN A
$26 BILLION BUDGET FOR A BASIC GOVERNMENT SERVICE

On Wednesday, the House took the pressure off the Senate by passing a $360 million tax hike. The Senate had tried to pass a similar bill several weeks ago but members found themselves having to explain why the move wasn’t flatly unconstitutional.

Recall that the Senate’s effort to raise taxes stalled after an Attorney General’s opinion – issued after the S.C. Policy Council first raised the issue – found that the measure raised revenue and thus had to originate in the House. Had the House not passed this tax hike, the effort to raise the tax on gas would probably have died.

And that wouldn’t have been a bad thing, either.

Perhaps it would have forced lawmakers to do what you and I have to do when we find we’re over budget: cut expenses. And I’m going to wager that somewhere in a $26 billion state budget lawmakers could have found $360 million for the core service of road maintenance.

Nevertheless, the House took the easy way out (raising taxes is usually easier than cutting spending) and voted to raise taxes and send even more money to the state’s highly unaccountable transportation system.

There was a procedural oddity along the way, though. When the bill came up, it seemed as if members were going to at least take their time considering the bill. It had just been reported out of committee and made publicly available the previous legislative day. As the bill came up on Wednesday, 19 representatives “requested debate” – a procedural maneuver to get the bill onto the “contested calendar.”

According to House Rule 5.17, “an objection or request for debate by five (5) members at any time prevents the consideration of the statewide bill or resolution and it then must be placed upon the statewide contested calendar and remain on it until one (1) or more objections or requests for debate are formally withdrawn from the floor, and if there are not further objections or requests for debate entered at that time so that the total number of outstanding cumulative objections or requests for debate is less than five (5) or more, the statewide bill or resolution shall then receive immediate consideration if there is any time remaining in the applicable period for that statewide day for that bill or resolution.”

None of the 19 objecting representatives withdrew their objection from the floor. Yet when the House moved to the contested calendar the bill was up for consideration. Rep. Rick Quinn (R-Lexington) raised a point of order that the bill had not been on the calendar for the required 24 hours prior to consideration. That point was sustained, meaning that again the bill should not have come up for debate.

Then Rep. Gary Simrill (R-York) moved that the rule be waived, allowing for immediate consideration, and the House agreed 103-0.

The House can certainly waive the 24 hour rule, but my reading of Rule 5.17 is that the bill should not have come off the contested calendar until at least 15 of those 19 objectors had removed their requests. We’ve already seen the House leadership engage in a highly questionable parliamentary move once this year. Was this another?

As far as the bill goes, of course, it doesn’t matter. It passed by a vote of 87-20. The highlights of the House bill include:

  • A reduction of the gas tax from 16.8 cents to 10, with an additional (and new) 6 percent excise tax on wholesale fuel.
  • An increase on the motor vehicle sales tax from $300 to $500.
  • Allowing the State Transportation Infrastructure Bank (the STIB) to fund more projects, while sending the agency $50 million more in annual funding.
  • Some tinkering to the way DOT commissioners are appointed, but legislative management of the whole process remains.
  • Making devolution of roads back to counties optional.

I can’t blame the House entirely for this massive tax hike – though they certainly were in control of moving the issue forward. The governor is just as much to blame for it as 87 House members are, and as a majority of senators will be if that chamber passes the tax hike. After having vowed in 2014 to veto any bill that came across her desk that raised the gas tax, Haley about-faced this year and proposed her own gas tax increase. Sure, she tried to lessen the hurt of the tax increase by saying it had to come with a minimal income tax cut and some form of restructuring at the Department of Transportation. The overall effect of her proposal, however, turned out to be a validation of hiking taxes as a way of dealing with roads.

That was the lesson lawmakers took from her proposal anyway, as many of us predicted. Several members took to their social media accounts after the vote on Wednesday night to defend their well-earned reputation as tax-hikers. A number of them defended themselves by citing the governor’s own willingness to raise taxes to pay for road and infrastructure repair.

At some point our legislators will have to act like grown-ups and accept responsibility for the deplorable condition of South Carolina’s infrastructure – a condition due largely to the state’s legislatively dominated transportation management system. For now, though, lawmakers have taken every opportunity possible to protect this system and simultaneously appeal to citizens’ desperation for better and safer roads by forcing those citizens to pay yet more for the most basic government service.

Jamie Murguia is Director of Research at the S.C. Policy Council, The Nerve’s parent organization