- Associated Press - Tuesday, March 24, 2015

COLUMBIA, S.C. (AP) - Gov. Nikki Haley sent letters to the House and Senate on Tuesday, telling members she would veto each chamber’s different plan to get more money to fix roads because neither proposal cuts taxes enough.

Haley’s letters came the same day separate House and Senate committees started their work on roads bills. Members on both sides said they were unhappy the governor needed to issue a threat just as talks started.

House Ways and Means Chairman Brian White called the letter “disheartening” as his subcommittee passed a bill that would lower the gas tax by 10 cents a gallon, while raising the sales tax on fuel by 6 percent. The proposal would raise an additional $400 million a year for roads and White plans to merge it with his proposal to adjust the state’s income tax brackets that would cost about $51 million a year when fully in place in two years.

But Haley’s letter to the House said that income tax cut is too small. Her proposal would raise the gas tax by 10 cents and lower income tax rates by 2 percentage points that would cost the state $1.8 billion a year when fully implemented in a decade.

Haley called the House plan a “massive tax increase” in her letter. “I will veto this and any other proposal that increases gas taxes without a significant cut to income taxes,” Haley wrote with the sentence in bold print and underlined.

The Senate Finance Committee planned Tuesday to discuss Sen. Ray Cleary’s plan to raise an additional $800 million a year for roads by raising the gas tax 10 cents and tying further increases to inflation, cutting a number of sales tax exemptions and increasing fees on driver’s licenses, car tags and other items. But they delayed debate for a day after talking about Haley’s letter.

“It is our responsibility to forgo at least some future growth of government and return hard-earned wages back to the people who earned them,” Haley said in her Senate letter.

Cleary said with the governor’s position clear, it is time for senators to pass what they think is best and let her handle the fallout.

“We’ll never satisfy the governor unless we do it her way, and I don’t think her way would pass through the Legislature,” said Cleary, R-Murrells Inlet.

The veto threat comes as South Carolina’s business community is putting increasing pressure on the state to do something. South Carolina Petroleum Marketers Association Executive Director Michael Fields said his group is backing a gas tax increase for the first time because something needs to be done to roads.

A group of several dozen South Carolina businesses called the South Carolina Alliance to Fix Our Roads wants the House to find even more money for highways. Chairman Eric Dickey quoted a former state Department of Transportation director and said that money would only allow the state to manage the decline of its highway system.

“The numbers we are talking about today are not going to solve the problem,” Dickey said. “They may just stop the bleeding.”

White said it is obvious the business community wants better roads and Haley should be prepared to deal with the consequences if no road plan is passed.

One of those consequences might be reduced economic development. White, R-Anderson, brought back the word of Michelin North America Chairman Pete Selleck who called the state roads a disgrace and suggested the company might look elsewhere to expand unless something is done.

“He didn’t say he was not going to locate another plant in South Carolina unless we cut the income tax,” White said.


Associated Press Writer Seanna Adcox contributed to this report.

Follow Jeffrey Collins on Twitter at https://twitter.com/JSCollinsAP

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