- Associated Press - Thursday, May 7, 2015

COLUMBIA, S.C. (AP) - Senate Republicans announced their own plan to fix South Carolina roads Thursday, which raises more money for highways and also cuts income taxes more substantially than the plan passed by the House.

Majority Leader Harvey Peeler was surrounded by 19 of the Senate’s 27 other Republicans as he announced the proposal, but conspicuously absent was the most powerful Republican in the chamber, Senate President Hugh Leatherman, although he later said he was busy trying to craft a budget deal. There were also no Democrats, who later seemed lukewarm to the plan.

The revenue side of the plan is quite similar to a bill on the Senate floor. It would raise gas taxes by 12 cents over three years, add a flat fee for hybrid cars owners and raise driver’s license and vehicle registration fees. Senators estimate it would raise about $800 million in extra revenue a year to fix and expand state roads.

The income tax cut proposal would reduce the tax brackets by 1 percent, and when fully implemented in five years would cut taxes by $709 million.

The proposal also would have the governor appoint all eight members of the Department of Transportation board - seven by the state’s congressional districts and one at-large - and those members would choose a leader for the agency. A joint House and Senate committee would decide whether the nominees were qualified, and the Senate would have to confirm them.

The Senate Republicans’ plan raises twice as much money each year as the roads plan passed by the House. The Senate income tax cut is also much bigger. The House tax cut would cost about $51 million.

Gov. Nikki Haley has her own road plan. It would raise the gas tax by 10 cents to raise $400 million for roads but would also cut 2 percentage points off tax brackets to roll back taxes by $1.8 billion when fully in place in a decade.

Peeler said he thinks there is still enough time to come up with a roads plan that all parties can accept with just four weeks to go in the Legislature’s session. “This issue is larger than any one state senator, House member or even the governor,” the Republican from Gaffney said.

And Haley and House leaders didn’t have anything negative to say about the plan immediately, asking for time to review it.

“If the Senate is proposing a plan, then obviously that is a step in the right direction,” said House Speaker Jay Lucas, who would be willing to consider a plan with rather minor differences from his chamber’s proposal.

The new Senate Republican plan covers all three of the things Haley wants.

Her spokeswoman said she was looking over the proposal. “As always, the governor encourages members of the General Assembly to continue to work toward these goals, and she will weigh in when she thinks it’s constructive to do so,” spokeswoman Chaney Adams wrote in a statement.

Later Thursday, the Senate hedged its bets in case the road funding bill gets detoured by putting a proposal in the budget that would suspend an item from a 2007 DOT reform law that allowed the governor to appoint the DOT secretary, but took away that ability this summer unless the Legislature extended it.

Business leaders are putting heavy pressure on lawmakers to approve some kind of extra funding for roads. The DOT has said before it needs an extra $1.5 billion a year for the next two decades to get roads into good condition. Supporters of the Senate plan point out an extra $800 million would get the roads at least to fair condition, and the governor and House leaders have said $400 million is enough to maintain the system in its current condition with some improvement to the most heavily traveled routes.

But there could be sticking points to the Senate’s new plan. Leatherman said he hasn’t looked carefully at it, but has said before the state can’t afford a big tax cut without cutting services too drastically, especially if there is an economic downturn.

Senate Democrats joined him in that idea.

“You may have addressed one problem,” said Sen. Darrell Jackson, D-Hopkins. “But you’ve created an even bigger one - a huge hole in the budget.”


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

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