The Easy Answer to Fixing Our Roads: Raise Taxes

November 13, 2014

Inside Insight

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fix roadsWHY BOTHER WITH STRUCTURAL PROBLEMS
WHEN WE CAN JUST GIVE GOVERNMENT MORE MONEY?

When we sit down to work out our individual or family budgets, and we find expenditures outstripping income, we’d all like to solve the problem simply by increasing income. And sometimes we can: We can get a second job or sell more widgets or whatever. But boosting income is usually the most difficult option – you don’t take a second job without placing a lot of additional stress on yourself and/or your family.

For elected officials writing the state budget, by contrast, boosting income is the easiest option. You just raise taxes. Sure, voters might get mad about it – temporarily anyway – but you can always claim it was necessary for some vital state need. Twenty years ago the vital state need was almost invariably something to do with education (and a lot of good all that new education money did).

Lately the vital state need – the important thing that won’t get done unless you, the taxpayer, gives government more of your income – is road maintenance.

Never mind that this treats roads as an afterthought rather than a priority. If state government has a core responsibility, surely it’s road maintenance. Yet somehow state lawmakers, working with a roughly $25 billion budget, can’t come up with enough for roads. There’s plenty for arts funding and corporate welfare and the latest higher education boondoggle, but somehow roads get shortchanged.

So lawmakers are already gesturing toward the easiest answer: boosting revenue – specifically a hike in the gas tax.

I watched a recent House ad hoc committee hearing on transportation funding, and you could sense lawmakers cozying to the idea of hiking the gas tax. Several expressed keen interest in the fact – relayed by a representative from the National Conference of State Legislatures – that South Carolina has one of the lowest gas taxes in the nation.

Characteristically, our low gas tax isn’t seen as a good thing by our allegedly “conservative” policymakers. For many of them, it doesn’t signify anything positive about South Carolina that working families pay slightly less for gas than their counterparts in other states. No, it’s a bad thing, or at least a good excuse for the state to raise more revenue.

One or two lawmakers expressed interest in the fact that the state owns far too many roads: 60 percent of South Carolina’s road miles, or about 40 percent more than the average in other states. Rather than simply neglecting thousands of miles of rural roads, the state should cede many of these roads to local authorities. Whether that idea can compete with a fuel tax hike seems doubtful, but I’m hopeful.

Similarly, the structure of South Carolina’s road funding system favors new construction and unnecessary expansions over maintenance of existing roads. But again: why bother with that complicated problem when you can just extract more money from the taxpayer?

Local governments see what’s happening, and they’re taking action. Many of them correctly reason that the state isn’t going to meet its core responsibility of road maintenance any time soon. Rather than pay for it themselves out of their existing budgets, though, these local governments are putting it before the voters. If voters can be hoodwinked into believing their governments somehow “can’t afford” to repair their roads unless they pay a bit more in sales tax, then the local politicians bare none of the blame for the tax hike – it’s the voters’ fault.

Accordingly: Lexington, Greenville, Berkeley, Georgetown, and Lancaster all tried to pass transportation-related tax hikes by referendum. (The first two failed; the latter three passed.)

What’s desperately needed is for lawmaker to reject the false assumptions (a) that a comparatively low gas tax is inherently a bad thing, and (b) that raising it is the only way to address the problem of South Carolina’s crumbling roadways.

That’ll take more work than voting “aye” on a tax hike, but it can be done.

Shane McNamee is a policy analyst at the S.C. Policy Council