AASHTO Journal

South Carolina Legislature Overrides Veto, Enacts Fuel Tax Hike to Boost Project Funding

Both chambers of the South Carolina Legislature voted May 10 to override a veto by Gov. Henry McMaster of a road projects funding bill, enacting a measure that starts raising motor fuel taxes and vehicle fees starting July 1.

In all, it will reportedly generate more than $600 million a year in additional funding for road and bridge needs.

The governor, who has maintained his opposition to raising fuel taxes, had vetoed the legislation May 9 soon after it reached him.

watertraffic.jpgLawmakers explained their reasoning for increasing project funding in the opening lines of the measure, noting that "our transportation infrastructure system has begun to deteriorate, causing safety and economic problems. It is time to focus the resources of our state in an efficient, effective manner to stop that deterioration and to set our state on the path toward building a first-class road network that is the envy of the nation."

They also said the additional investment would pay economic returns, writing that "this act strikes an appropriate balance between the needs of our transportation infrastructure and the needs of the taxpayers by providing targeted tax relief that will stimulate economic growth, which, in turn, will generate revenue growth from the sales of motor vehicles, from the sale of fuel for motor vehicles, and from other provisions contained in this act."

The new law levies a 12-cent hike over six years in what it calls the "motor fuel user fee" on gasoline, diesel and other motor fuels, with the increase adding two cents a gallon each year through 2022.

It will raise fees on driver's licenses and vehicle registrations, increase vehicle sales taxes, set a new one-time fee for vehicles bought out of state and later registered in South Carolina, assess new fees on electric or hydrogen-powered vehicles that do not contribute to the motor fuel tax and new fees on hybrids that use less motor fuel, and levy a new "road use fee" on large commercial vehicles starting Jan. 1, 2019.

Questions regarding this article may be directed to editor@aashtojournal.org.

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