Category Archives: Taxes

Could we finally get comprehensive tax reform?

One of our perennial hobbyhorses on The State‘s editorial board over the years was our demand for comprehensive tax reform.

We wrote about it a lot, whether you remember it or not. Which you probably don’t. It’s not the sort of issue that makes most people’s hearts go pitter-pat — even those interested in tax changes. (Readers would complain, “All you ever write about is the Confederate flag!” Or video poker. Or the lottery. Or whatever they didn’t want us to write about. To which I would say, “No we write about a lot of issues.” “Like what?” “Like comprehensive tax reform.” “Comprehensive what…?”)

Our point was this: Instead of making more and more piecemeal changes to tax policy, further distorting the tax burden in the state, how about if we act like we have some sense and do this: Figure out what it costs to do the things we agree state government should do, figure out how much it costs (that is to say, budget reform), and then come up with the fairest, least burdensome, most reliable ways to raise the money to pay for it.

Instead, year after year, lawmakers came charging into Columbia, determined to give this or that tax break to this or that constituency group — whoever was yelling the loudest at a given moment (say, people who owned homes that were rapidly appreciating) — without any regard to the system overall. Increasingly, that led to such things as relying less and less upon such stable and rational revenue sources as real property, and more and more reliance on such volatile — and oppressive to the economy — sources as sales taxes.

Years ago, I could have given you a list of specific things that needed addressing, but I’m not as up-to-date on the details today. Of course we should do away with the sales tax cap on cars. In fact, we should take all sales tax exemptions and throw them onto the table. Let the constituency for each have its say, but in the end, spread the pain around. You can’t make everybody happy.

(This is Doug’s cue to say, “Why don’t you start by calling for doing away with the sales tax on newspapers?” To which, as usual, I say, “Why? That’s not one of the more egregious ones, like the auto cap. It’s pretty average. Throw it on the table with the rest, and let only the most rational exemptions, if any, survive.” I’d be surprised if the newspaper one was allowed to stay.)

Trouble is, there’s little appetite for the holistic, good-government approach. Until maybe now:

Speaker Lucas Appoints House Tax Policy Review Committee

Member panel tasked with offering suggestions to reform outdated tax code

(Columbia, SC) – House Speaker Jay Lucas (District 65-Darlington) today appointed fourteen members of the SC House to serve on the House Tax Policy Review Committee.  This ad hoc committee will be responsible for reviewing South Carolina’s current tax code and submitting suggestions for reform to the Speaker before the beginning of next legislative session. The group will hold its first meeting next Tuesday, August 30th, 2016, at 2 P.M. in room 516 of the Blatt Building.

Speaker Jay Lucas

Speaker Jay Lucas

“Our outdated tax code needs a dramatic transformation in order to promote economic competitiveness and increase the size of our citizens’ paychecks. Achieving this difficult task is long overdue, but necessary to ensure our tax code is fair for our taxpayers. A broader and flatter tax code will help continue to spur job growth and provide greater opportunities for South Carolina families,” Speaker Jay Lucas stated.

Speaker Lucas selected Speaker Pro-Tempore Tommy Pope (District 47-York) to serve as Chairman of the House Tax Policy Review Committee. Additional members include: Rep. Todd Atwater (District 87-Lexington), Rep. Bill Bowers (District 122-Hampton), Rep. Mike Burns (District 17-Greenville), Rep. Joe Daning (District 92-Berkeley), Rep. Chandra Dillard (District 23-Greenville), Rep. MaryGail Douglas (District 41-Fairfield), Rep. Shannon Erickson (District 124-Beaufort), Rep. Joe Jefferson (District 102-Berkeley), Rep. Jay Jordan (District 63-Florence), Rep. Roger Kirby (District 61-Florence), Rep. Mandy Powers Norrell (District 44-Lancaster), Rep. Bill Taylor (District 86-Aiken), and Rep. Anne Thayer (District 9-Anderson).

“Representative Tommy Pope and the bipartisan members of this ad hoc committee were individually selected because of their leadership abilities and knowledge of the tax system. I am confident that this diverse group will successfully begin laying the groundwork for significant tax reform,” Speaker Lucas concluded.

Will this group come up with something based on reason instead of which wheel squeaks the loudest? The odds have always been against it, but I’m going to allow myself to hope…

Your thoughts about a TIF for Finlay Park?

This doesn’t move me much either way, but I was just wondering whether any of y’all have strong opinions about this proposal floated by the Columbia mayor:

A multimillion-dollar renovation of Finlay Park and a pedestrian-friendly remodeling of parts of two major downtown streets might be within reach if local governments will agree to a controversial financing plan being floated by Columbia Mayor Steve Benjamin.Steve Benjamin Twitter

Benjamin said last week that he’s working on a proposal to create a small taxing district that would capture property taxes on buildings along Assembly Street stretching north to Laurel Street, west to just behind the rundown park and south to Washington Street.

The largest source of income would come from a proposed $60 million to $70 million, 15-story apartment building called The Edge that a Chicago-based company wants to construct near the Richland County library, Benjamin said….

Mayor Steve may propose this at an August council meeting, so you’ve got time to either encourage him or head him off with a tidal wave of protest…

This was the only picture of Finlay Park that I could find in my archives -- it's from a rehearsal of "Pride and Prejudice" in 2012.

This was the only picture of Finlay Park that I could find in my archives — it’s from a rehearsal of “Pride and Prejudice” in 2012.

Penny Tax leads to… a sidewalk! So all you critics shut up, OK?

sidewalk

Yikes!

I got an email announcement from the Penny Tax program (maddening tagline, “Pennies Impacting People,” which I am not making up) trumpeting a triumphant milestone in the tax’s transformation of our local infrastructure:

A new sidewalk in the county has officially opened thanks to funding by the transportation penny sales tax. Richland County and the Richland Penny Program held a ribbon-cutting ceremony Friday, May 20 for the Windover Street Sidewalk Project.

“Completing projects and improving the quality of life for our residents is what the Transportation Penny Program is all about,” said County Councilman Torrey Rush. “The sidewalk may seem like a small project compared to the road widenings we have on the list, but this project is a big deal to the surrounding community.”…(read more)

Yeah, it kinda does. Seem small, I mean. Yeah, I know, if you live on that road and have to get around in a wheelchair this is a great improvement for you. But if you’re one of the taxpayers wanting some answers on what benefit you’re getting… it’s not so great.

At least Paul Livingston had the good sense to list some larger projects that are getting built…

No, wait. He didn’t. He referred us to the website, which touts…

Yikes again…

pedestrian bridge

An exchange regarding county’s handling of the Penny Tax

Richland County Council’s Paul Livingston stepped out into the line of fire today with an unabashed defense of the county’s doings with an op-ed piece headlined, “Facts show Richland penny tax is a success.”

If I’d been standing near him at the moment the piece hit the Web, I’d have moved away quickly. (But I’d have been cool about it, acting like I’d suddenly remembered something I need to run home for or something. Wouldn’t want to look cowardly or anything.)

An excerpt:

livingston3

Paul Livingston

What began as a welcome audit of the program has morphed into an effort to undermine one of the best hopes Richland County has of reaching its full economic potential while providing a consistent, quality transit and transportation network that enhances the quality of life for all citizens.

I have not seen any evidence to support claims of illegal activity and corruption on the county’s part. Integrity is extremely important to me, and I take it personally when someone attacks my integrity.

County Council has only followed the will of the people. We haven’t done anything different than what voters requested and approved….

The fact is that a solid foundation has been laid to deliver on the promise of a modern bus system and better roads, bikeways, sidewalks and other special projects that will improve transportation.

The fact is that the COMET, crippled by a 45 percent reduction in service a few years ago, is now flourishing: It has restored lost service, introduced new routes, improved bus stops, adopted new technology to enhance riders’ experience, and more. Ridership has increased 150 percent.

And our roads and sidewalks are being fixed. Already, 76 roads have been paved or resurfaced, and other dirt road paving and resurfacing projects are underway….

But go read the whole thing at thestate.com.

An alert reader has pointed me to a tough rejoinder posted by Susan Quinn, a Facebook friend of mine (and, a quarter-century back, a student of mine that one semester that I taught a newswriting course at USC).

Here’s what Susan said:

Susan Quinn

Susan Quinn

While Mr. Livingston basks in the glow of a few dozen county road getting their potholes patched thanks to the Penny Transportation Tax, let’s recap some of the facts he evidently doesn’t wish to deal with.
FACT 1: The Penny Tax Development Team LLC has never obtained the required city or county business licenses and could be required to repay fees and possibly fines.
FACT 2: Millions of taxpayer dollars have been filtered to numerous outside PR firms when the County itself has a full-service PR department. I’m referring to Banco Bannister and Campbell Consulting (which, BTW, provided no documentation for work performed). I’m also referring to other businesses who have been awarded (using the phrase, “allowed to steal” has such a negative connotation) thousands of taxpayer dollars for alleged PR services (including one business …Strategic Business and Politics, LLC…which received $169,687 and which has its office in a UPS Store…sound fishy?)
FACT 3: The Penny Tax Development Team LLC has submitted exorbitant monthly invoices for items such as cars, cell phones, computers, internet services, printer paper and gourmet coffee. They’ve even submitted invoices for pest control services! And those pest control services did nothing to control the pests robbing us taxpayers! These expenses totaled over $35,000 FOR ONE MONTH, according to information obtained under a Freedom of Information request. And these are just some of the expenses the county will actually admit to!
FACT 4: Let’s not forget the $300,000 deals to people paid who had no training to do the work they were hired for, like the former City Councilman attorney who needed training on doing title searches and the former USC cheerleader turned real estate agent.
FACT 5: And let’s also recall the hundreds of thousands of dollars filtered to select individuals through the “Mentor-Protégé” program…a phony program that never even existed!
These are just a few facts that have come to the surface in the cesspool that is Richland County government. There are bound to be more as our county leaders get away with their multi-million (billion?) dollar blatant fleecing of us tax payers.

Perhaps you’d like to weigh in as well…

Graham gets award that won’t help him with the base, but really should

This just in from Lindsey Graham:

Graham Named ‘Fiscal Hero’ For Work To Address National Debt

WASHINGTON – U.S. Senator Lindsey Graham (R-South Carolina) was named a ‘Fiscal Hero’ by the Campaign to Fix the Debt for his work during the 114th Congress to improve the nation’s fiscal future and address the core drivers of the national debt.fixthedebt

“Senator Graham has worked through a variety of channels to draw attention and find solutions to the nation’s fiscal challenges,” said Maya MacGuineas, Head of the Campaign to Fix the Debt. “While many lawmakers have chosen to bury their heads when it comes to these issues, Senator Graham has shown courage and leadership and has been willing to stand up for what is right for the country – even when it’s not easy to do so.”

“The longer we wait, the more severe and difficult the choices will be to fix the debt,” MacGuineas continued. “Yet very few Members of Congress take this problem seriously. Those who do, like Senator Graham, deserve our thanks and praise.”

Honorees included 26 members of the House and 21 Senators from both parties, covering a range of political views.

To be named a Fiscal Hero, lawmakers distinguished themselves by casting fiscally responsible votes; pushing their party leaders to make addressing the debt a priority; leading bipartisan policy efforts; and engaging and educating constituents.

The Campaign to Fix the Debt is a nonpartisan movement to put America on a better fiscal and economic path.  More information on the group can be found on its website:http://www.fixthedebt.org/

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The nice thing about this organization is that, unlike too many other groups these days, it is transparent about who is behind it.Ballentine - Warthen Ad

Here’s the steering committee of Fix the Debt. Starting with Erskine Bowles and Alan Simpson themselves, the list includes such luminaries as Ed Rendell, Michael Bloomberg, Pete Domenici and Sam Nunn. I see a list like that and I think, I may not automatically agree with everything these guys come up with, but I’m certainly going to give it a respectful listen.

But these are just the kinds of folks that the great populist mass is rising up against these days, isn’t it?

So Lindsey Graham should be proud to have the praise of such a group, but it’s not going to do much to heal the divisions between him and the restive members of his base…

Speaker Lucas is right to trash the Senate GOP roads plan

SCRoadsBandaidAriailW

I understand from various sources that the Senate today is debating, and plans to vote on, the “roads plan” that I excoriated last week. Here’s hoping it’s not going well.

As Cindi wrote the other day, the GOP proposal has its good parts, including real reform in governance of DOT. But it also contains an absolute dealbreaker, ladies:

If the legislation skipped over Section 4, Gov. Nikki Haley would be correct to say it’s “exactly what we need.” We would have the reform we need, and the Legislature could devote some one-time money to roads again this year and adopt a long-term funding plan next year that befits the reformed Transportation Department.

Unfortunately, it doesn’t skip Section 4, which commits not just this General Assembly but every General Assembly in perpetuity to siphoning $400 million out of our state’s general budget fund and giving it to the Transportation Department.

The result is a bill that promises to break trust with the voters and strangle out other state obligations and, at bottom, isn’t worth the paper it’s written on.

For as long as we have been paving roads, we have collected a gas tax and driver fees to build and maintain those roads, on the theory that people inside and outside of South Carolina who use our roads the most should pay the most for them.

We have collected sales and income taxes to pay for our schools and courts and state police and child protection and economic development and environmental protection and most other state services.

The Senate plan changes that, dramatically. It diverts $400 million in sales and income taxes — more than 5 percent of the state budget — to pay for roads. That means we have $400 million less — not just next year but every year going forward — to pay teacher salaries, including extra pay to reward and attract the best teachers for the neediest students, to pay cities and counties for holding elections and performing other duties the state requires them to perform, to hire caseworkers to protect vulnerable children from abusive parents, to employ the judges who lock up the bad guys and the prison guards who keep the bad guys from escaping and the scientists who test our water to make sure it’s safe to drink, and everything else.

The roads diversion breaks trust with voters, in much the same way lawmakers do when they raid trust funds….

Make no mistake: A proper roads bill includes both proper reform and a gas tax increase. And it most assuredly does not include an open-ended raid on the funding for everything else the state of South Carolina does.

If Harvey Peeler manages to ram through this awful mess today, it will be up to the House to kill it. And Speaker Jay Lucas said it best last week:

1126136229“For 323 days, the Senate has had every opportunity to show leadership and propose a real, long-term solution for road repair in South Carolina. The current Senate amendment simply kicks the can further down the road and frankly, into a pothole. The General Assembly has been using general fund dollars to slap a band-aid on roads for years with very little to show for it. I urge the Senate to give this issue the attention that it requires and rally around a proposal with a long-term solution that keeps our families safe and our economy thriving.”

 

 

 

That’s no roads deal. It’s a cut-everything-else deal…

I’m running from meeting to meeting today, but here’s a topic to get y’all started:

The “good” news is that they don’t cut income taxes — which, of course, was always an insane, utterly irrelevant condition imposed by the governor.

So basically, it’s a wash. It’s a deal that does nothing to address the need for an adequate revenue stream for roads…

Newman and Washington face tax charges

Both Richland County Councilman Kelvin Washington and former Columbia City Councilman Brian Newman have turned themselves in to authorities in connection with a tax investigation, and Newman’s attorney says he will plead guilty today.

Here’s The State‘s story, which I assume will soon be updated:

A former Columbia city official and a current Richland County councilman turned themselves into law enforcement Tuesday to face tax charges stemming from an ongoing investigation by the S.C. Department of Revenue.

Former Columbia City Councilman Brian Newman, 33, a local attorney who owns his own practice specializing in criminal defense, will plead guilty to two counts of willful failure to file timely tax returns for a total of $201,179 and be sentenced at a hearing scheduled for 2 p.m., his attorney Bakari Sellers said.

“He wants to get this wrapped up,” Sellers said. Already Newman has filed his back-tax returns and has paid his back taxes, which total about $9,800, Sellers said.

Richland County Councilman Kelvin Washington, 51, is charged with three counts of failing to file income tax returns for 2012, 2013 and 2014 for a total $426,000 in alleged unreported income. He is represented by attorneys Mike Duncan, Tim Rogers and Rep. James Smith, D-Richland….

It’s somewhat unclear at this point whether there’s any direct connection between these charges and the county’s penny sales tax, the handling of which the state Department of Revenue is investigating, except in this sense: “In a detailed audit such as the…  one DOR has done of the penny sales tax program, it is routine for auditors to check the income tax records of top people involved.”

But who knew Newman was even involved in that? The big shock in today’s news (to me, anyway), is the name of Brian Newman. The voters of District 2 just can’t seem to catch a break — first E.W. Cromartie, now this. Here’s hoping they fare better with Ed McDowell

The Senate, as is its wont, resists reforming DOT

While I think it’s great the Senate is trying to come up with even more money to fix our roads, I have to agree with Speaker Lucas on this one:

State senators passed their own version of a plan Tuesday to raise money to repair the state’s crumbling roads, setting up a crash with their counterparts in the S.C. House.

The collision came as the Senate Finance Committee voted 14-8 to replace a House road-repair plan with a Senate proposal. The Senate plan would raise more money for roads — roughly $800 million a year versus $427 million — but also increase the gas tax more — by 12 cents a gallon versus 10 cents….

House Speaker Jay Lucas, R-Darlington, said he was “extremely disappointed” the Senate committee did not debate the various parts of the House bill, instead substituting its own proposal.

Lucas called the House’s 87-20 passage of its own roads plan two weeks ago a “courageous vote,” adding senators focused only on “dollar signs,” not the other reforms in the House plan.

State Rep. Gary Simrill, the York Republican who sponsored the House bill, said the resounding House vote — enough to withstand a promised Haley veto — was because that proposal also included reforming the State Infrastructure Bank and S.C. Department of Transportation.

“The Senate bill … has nothing for reform. It has nothing for right-sizing DOT,” Simrill said. “It is just a funding (proposal).”…

Funding the roads without fixing DOT is almost as bad as reforming DOT without funding the roads — as Cindi pointed out today.

We need to do both, and we’ve needed to do both for a long, long time. It’s time lawmakers move away from the past two decades of failing to do either.

At long last, the House stands up to the governor on roads

Finally, the House has done what it always had to do if it were to act rationally on financing road construction — raise the tax designed for that purpose, which had been kept ridiculously low:

The South Carolina House passed a bill Wednesday to pay to repair the state’s crumbling roads by increasing the state’s gas tax by 10 cents a gallon.

The proposal, which would raise roughly $427 million a year, passed 87-20, a large enough margin in the GOP-dominated House to survive a veto threat by Republican Gov. Nikki Haley.

State Rep. Gary Simrill, R-York, said the “strong vote” shows House members are serious about fixing S.C. roads….

Here’s hoping House members continue to stand up against the governor’s nonsensical stance, and that the Senate acts reasonably as well.

So far, the governor has reacted in a predictable manner, demagoguing on Facebook rather than engaging lawmakers.

Should we move toward a consumption-based tax system?

You may or may not recall that our own Fritz Hollings has long been an advocate of a VAT tax on the federal level.

Well, Fritz is probably pleased by this story in the WSJ today:

U.S. lawmakers on both sides of the aisle increasingly are finding appeal in an ambitious concept for overhauling the nation’s income-tax system: a tax based on consumption, a tool long used around the world.

The tax-writing Senate Finance Committee is giving new consideration to the consumption-tax idea with the hope that its promised boost to economic growth would ease the way to a revamp.

As lawmakers have examined a tax overhaul, “it becomes extremely difficult to see a political path to accomplish it” within the confines of the current income-tax system, said Sen. Ben Cardin (D., Md.), co-chairman of a Finance Committee working group negotiating a possible overhaul of business taxes.

As a result, the idea of a consumption tax “is getting a great deal more respect, and it is in the discussions,” he said.

Mr. Cardin introduced legislation last year to create a type of consumption tax known as a value-added tax and at the same time lower business taxes and scrap income taxes completely for lower-income Americans….

What do y’all think?

Both ends of the political spectrum attacking the GOOD part of Haley’s tax-swap plan

This does not bode well for responsible policy-making in South Carolina. (Now, if there’s an “Understatement of the Year” contest somewhere, and there’s a cash prize, I want one of y’all to enter that statement for me, on account of the fact that I’m too modest to do it myself. If there’s more than one such contest, enter it in the one with the biggest cash prize. I mean, duh.)

I had an oh-so-brief, and oh-so-ill-founded, moment of optimism last week when I read this:

Competing state roads-funding plans from the GOP-controlled S.C. House and Republican Gov. Nikki Haley appear to be on a collision course unless a compromise can be reached by next week….

Because I thought, for that brief second, contrary to all past experience, that maybe it means they’re willing to raise the gas tax without a much-bigger cut in the income tax that would more than wipe out any overall advantage to the gas tax.

Silly me. I have these Panglossian moments from time to time, but they pass quickly enough when I run head-on into reality. This particular fit was fully over by the time I was done reading this bit:

Some GOP lawmakers, wary of opposition to Haley’s plan by the limited government Americans for Prosperity group, are hesitant to back a direct gas-tax increase….

Because, you know, that’s what’s important: Slavish devotion to the agendas of out-of-state groups that don’t give a tinker’s dam about South Carolina, rather than whether our state’s needs are attended to.

So basically, the problem with Haley’s “roads” plan isn’t the much-greater tax cut that has nothing to do with paying for roads. The problem, for our solons, is the very modest part that would benefit roads.

But surely, surely, there are some lawmakers who are neither automatons for Washington interest groups nor sensible folks who fear meeting such automatons in a primary.

Which is to say, there still ARE some Democrats in the Legislature, right? I mean, they’re too few to be effective or anything, but at least they can stand up for a needed, sensible tax increase when no one else will, just so somebody is standing up for wise policy. Right?

Wrong. Here’s what the Democrats are saying:

COLUMBIA, S.C. (AP) – Democratic legislators say Gov. Nikki Haley’s plan to cut income taxes by $9 billion over the next decade is nothing but a tax hike for more than a million South Carolinians….

Haley announced last month she’s willing to support increasing the gas tax by 10 cents over three years to pay for road and bridge work, but only if legislators cut income taxes by 2 percentage points over 10 years….

The office’s economic advisers project that 1.1 million people who file income tax returns – or 46 percent of filers – would see no benefit because they would pay no personal income taxes anyway, due to previous cuts to the bottom brackets.

Democrats note those taxpayers would, however, pay the gas increase.

“One million people will only see a tax increase,” said Rep. James Smith, D-Columbia….

So basically, no one is articulating the case for what actually ought to happen. Which is that we should increase the tax (the ridiculously low tax) that already exists specifically for the purpose of paying for roads, since we don’t have enough money to fix and build roads. We can’t even get folks to stand up for it at a moment when it would cost so little politically, because gasoline prices are so low that no one would notice the increase.

Welcome to the State House.

What Haley proposed isn’t a ‘road plan.’ It’s a tax cut plan

In the sake of clarity, The State‘s editorial Sunday about Nikki Haley’s “Let’s Make A Deal” proposal on paying for roads maybe what should have been an obvious point, although I had not yet thought of it this way:

WHEN MARK Sanford ran for governor in 2002, he proposed to increase our tax on gasoline and eliminate the state income tax. He didn’t claim it was a plan to save our roads. It was a plan to cut our taxes, plain and simple.

And that’s what Gov. Nikki Haley offered us in her State of the State address on Wednesday: a plan to cut taxes. Oh, she called it a plan to address what most businesses and lawmakers and many citizens consider our most urgent problem: our crumbling roads and bridges.

But it would cover barely a fifth of the need, and in reality it was just a warmed-over version of the Sanford plan. It should meet the same fate as the Sanford plan, which the Republican Legislature rejected, because lawmakers knew we could not afford a massive reduction in the money available to pay for schools and prisons and industrial recruitment and mental health and other basic services.

Gov. Haley did propose to spend the new gas tax revenue on roads: $3.5 billion over the next decade. But she also proposed to steal $8.5 billion from those core functions of government over that same period.

The governor says she’s making roads a priority (although really she’s making tax cuts the priority), and it’s true that we can fix a big problem in government by making it a priority. But if we aren’t careful, we create other problems, as we saw most recently with the cuts to our child-protection program that Gov. Haley now wants to reverse…

Yup. Instead of focusing on the problem under discussion, something of importance to everyone who cares about the state’s actual needs — the lack of funding for roads — the governor is really using that as a smokescreen to achieve an ideological goal that doesn’t address any actual problem.

That wasn’t fully clear to me until I saw the numbers: $3.5 billion for roads, but $8.5 billion for tax cuts…

Haley’s ‘solution’ for roads: Rob the general fund

On my way home last night, listening on the radio, I heard some things from our governor that sounded pretty good to me, including her continuing initiatives to try to help out poor, rural schools. It was refreshing to hear a South Carolina Republican say, in such a prominent venue, “for the first time in our history, we acknowledged that it costs more to teach those children mired in poverty than those born into a secure economic situation.”

I was less enchanted a moment later, when she announced, “And all of this will be done without spending a single new tax dollar.” In other words, any gains we make in education will be accomplished by cutting back on something else that state government does.

And that brings us to her proposal on paying for roads, which is essentially to take the money out of the general fund, underfunding some other state function.

She says she can go for doing the right and logical thing, the obvious thing we should do without any conditions or contortions — raise the gas tax. But only if we cut the unrelated income tax. (And restructure the transportation agency, which of course is fine — I’ve advocated it for more than two decades — although not necessarily a thing we should hold our breath on while roads and bridges fall apart.)

The foolishness of this would be immediately apparent to everyone if it were a one-to-one swap. If the income tax was dedicated to paying for roads, then no one could miss the idiocy of raising revenues for roads with the left hand while lowering them with the right.

But the income tax doesn’t pay for roads; it goes into the general fund to pay for the rest of government. And among the hate-the-government crowd, the Haley proposal will make sense. How do they get there? By clinging to the belief that most government spending is waste anyway. And to the even more absurd belief that if you just cut off the money tap, efficiencies will magically appear, and only the “waste” will be cut.

I’ll say to this what I always say to such proposals: If you believe the general fund can do without those revenues, then tell us what you want to cut. Make the cuts first, and then reduce the no-longer-needed revenues.

But they won’t do that. That would be hard. They prefer the magical-thinking approach — just cut off the money, and everything will work out OK.

The honest thing would be to say, here is the thing that I think is less important than funding roads. But that would incur a political cost. The governor, and those who will support her idea, just want the warm-and-fuzzy credit that comes from cutting a tax, any tax.

This is the kind of proposal you make when you’re more interested in staying in the good graces of the Grover Norquists than you are in governing.

I think our governor has matured in office in a number of ways. She used to call the discomfort of mainstream Republicans over her sudden rise “a beautiful thing,” with a twinkle of malice in her eye. Now, she uses that phrase in a more positive way:

Whether I’m in California or Connecticut, Montreal or Minnesota, the story of South Carolina’s success is front and center. Everywhere we go there is excitement – and frankly, not a small amount of envy – over who we are and what we’ve been able to accomplish. It’s a beautiful thing….

But the deal she is proffering on roads is a dereliction of responsibility.

Again, if we want better roads, we should dig into our pockets (and into the pockets of visitors who use our roads) and pay for them. Magic beans are not a solution.

Democrats walk back their awful casino proposal (a bit)

Two days ago, I said I hoped that when the SC House Democrats announced their legislative priorities on Tuesday, they would back away from their awful idea of legalizing casinos in order to pay for roads.

I didn’t have much confidence that they would, and I didn’t attend their presser.

But I’m pleased and surprised by the release they sent out after yesterday’s event. No, they didn’t abandon the idea. But it was no longer the first thing they mentioned on the topic of paying for roads, and the first thing was now the one rational way to do it — by raising the tax that is intended for that purpose, a tax that hasn’t been raised since 1987:

SC House Democrats Announce 2015 Legislative Agenda
Highlights include road funding, education funding reform, equal pay, redistricting reform
Columbia, SC – South Carolina House Democrats announced their legislative agenda for the 2015-16 session at a press conference at the state house on Tuesday. Led by Minority Leader Representative Todd Rutherford, Democrats first stressed the need to tackle road funding this session.
“House Democrats are endorsing an ‘all of the above’ approach to road funding this year,” said Democratic Leader Todd Rutherford (D-Richland). “The time to be picky about how we fund our roads is over. Simply put, we will not stand in the way of a gas tax increase, nor will we stand in the way of new revenue through casinos. The only thing we’ll stand in the way of is kicking the can down the road. We have to plug our $45 billion infrastructure deficit before a bridge collapses and people die.”
Democrats also called on the Governor and Republicans in the general assembly to withdraw their “embarrassing” appeal to the Supreme Court ruling over K-12 funding.
“For twenty years, Republicans have ignored the issue of education funding in South Carolina,” said Representative James Smith (D-Richland.) “Instead of fighting the Supreme Court ruling calling on us to address the inequalities in school funding, let’s actually roll up our sleeves and do it. We owe it to the students, parents, and teachers of South Carolina. “
Democrats also called on Governor Haley to negotiate a South Carolina-centered alternative to Medicaid Expansion with the federal government to allow us to bring our federal tax dollars back to the state.
“It makes zero sense to continue to refuse to accept our own tax dollars just so Governor Haley can thumb her nose at the President,” said Rep. Justin Bamberg (D-Bamberg). “Fourteen Republican Governors have now come out in support of some sort of Expansion alternative that they negotiated with the federal government. Why shouldn’t we do the same?”
The other issues Democrats will focus on this session include equal pay for female state employees. South Carolina is one of just four states in the nation without a equal pay law. Representative Leon Stavrinakis has proposed a bill that would ban gender pay discrimination among state employees. His bill was modeled after a Louisiana bill that passed an overwhelming Republican General Assembly and signed into law by conservative Republican Governor Bobby Jindal.
House Democrats also endorsed a plan to establish a living wage in South Carolina. Currently, South Carolina is one of just five states in the country without a state-mandated minimum wage law. Representative Gilda Cobb-Hunter’s proposal would set the wage at $10.10 per hour.
Democrats also pledged their support for ethics reform this session. Though they said any ethics reform should also include reforming the redistricting process in South Carolina. Their proposal would install an independent panel to draw district lines instead of partisan legislators. In 2014, 100% of all incumbent legislators were re-elected in the general election.
“District lines are purposely drawn by legislators in order to create a safer political environment for themselves and their political party,” said Rep. Laurie Funderburk (D-Kershaw), the author of the bill. “Gerrymandering has created a polarized legislature that seeks to root out moderates and replace them with politicians who only have to worry about winning their primaries. Reforming our redistricting process is critical to a more functional General Assembly and regaining the trust of the voters.”
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Sure, I’d like to see them pick up the gas tax ball and run with it, but this indirect sort of endorsement at least marks progress.

Krauthammer bravely pushes the Energy Party line

Enjoyed this Charles Krauthammer piece over the weekend:

For 32 years I’ve been advocating a major tax on petroleum. I’ve got as much chance this time around as did Don Quixote with windmills. But I shall tilt my lance once more.

The only time you can even think of proposing a gas tax increase is when oil prices are at rock bottom. When I last suggested the idea six years ago, oil was selling at $40 a barrel. It eventually rose back to $110. It’s nowaround $48. Correspondingly, the price at the pump has fallen in the last three months by more than a dollar to about $2.20 per gallon.

As a result, some in Congress are talking about a 10- or 20-cent hike in the federal tax to use for infrastructure spending. Right idea, wrong policy. The hike should not be 10 cents but $1. And the proceeds should not be spent by, or even entrusted to, the government. They should be immediately and entirely returned to the consumer by means of a cut in the Social Security tax….

A $1 gas tax increase would constrain oil consumption in two ways. In the short run, by curbing driving. In the long run, by altering car-buying habits. A return to gas-guzzling land yachts occurs every time gasoline prices plunge. A high gas tax encourages demand for more fuel-efficient vehicles. Constrained U.S. consumption — combined with already huge increases in U.S. production — would continue to apply enormous downward pressure on oil prices….

Quixotic, yes. But I stand up and cheer whenever anyone has the courage to speak sense on the gas tax.

I don’t know whether his FICA rollback is the best thing to do with the money. I’d like to see some serious investment in infrastructure. But it doesn’t matter. Raising the gas tax and using the money unwisely is actually better than not raising it at all, for the reasons Krauthammer cites.

By the way, in praising Krauthammer for being so Energy Party, I don’t mean to claim he got the idea from me. As he says, he’s been pushing this uncommon sense idea for 32 years. The Energy Party has only been around for a fourth as long.

But of course, the odds against us are as great as ever. Too many on both the left and the right hate the idea of gas tax increases. But at least there’s something afoot in Congress…

This morning’s CRBR legislative panel

Sen. Joel Lourie, Rep. Nathan Ballentine, Rep. Beth Bernstein, and Otis Rawl of the state Chamber.

Sen. Joel Lourie, Rep. Nathan Ballentine, Rep. Beth Bernstein, and Otis Rawl of the state Chamber.

I went to this morning’s “Legislative Lowdown” breakfast sponsored by the Columbia Regional Business Report. I waited and let Chuck Crumbo go ahead and write about it, since he gets paid to, and here’s his report. Use that as a baseline.

The panel was the same as this one in 2010, only with Rep. Beth Bernstein in place of Rep. James Smith.

Here are a few random impressions I formed:

First, while I think these annual sessions have been highly informative and fair to all viewpoints, CRBR should probably make an extra effort to get more Republicans on the panel, just to more accurately reflect realities. I wouldn’t take any of the Democrats away; I’d add a couple more Republicans — maybe Kenny Bingham and John Courson, or Katrina Shealy.

Here’s the one thing I Tweeted out during the session:

Otis wasn’t saying we shouldn’t have ethics reform, but he certainly seemed to regard it as a distraction, as a plate of vegetables with no meat, saying, “I know they’ve got to do this,” but… His tone reminded me of the bank examiner in “It’s a Wonderful Life.” Remember George Bailey, all animated, telling him about the fact that his brother is going to the White House to receive the Medal of Honor from the president, and the bank examiner says, without a shred of interest, “Well, I guess they do those things….”

Well, that’s Otis being told about ethics reform. He supposes legislators have to get this ethics stuff out of their system, but he’ll be glad when they’re done and move on from it.

Now in his defense, he sees the urgent need for workforce preparation, infrastructure and other things that bear on our economic well-being, and he should be focused on those things. But he was really a wet blanket on the ethics stuff.

Others were more interested in the topic. Rep. Bernstein predicted that, again, the sticking point will be independent oversight, instead of lawmakers policing themselves. She said that was key, but signaled willingness in a pinch to accept a “hybrid” approach, with some lawmaker participation.

On Medicaid expansion, Sen. Joel Lourie said two things that interested me. First that Christian Soura, the guy Nikki Haley just appointed to replace Tony Keck at HHS despite his never having done anything like that, is a very impressive guy. I’ve gotta meet this guy, if Joel thinks that. Or at the least, hear an elaboration on what impressed Joel. Then, he said he appreciates the position of those who oppose Medicaid expansion because they’re worried about the state having to pay 10 percent of the cost after three years. I usually don’t hear Democrats say things like that.

As Chuck noted in the lede of his report, there was pretty much a consensus that for lawmakers to act meaningfully on paying for roads, there would have to be a lot of pressure on them from outside the State House. Sen. Lourie said there are three kinds of people in the Legislature on this — those who clearly see the need to come up with road funding, those who can maybe be talked into it, and “the not no, but ‘hell no’ group.” Republican Nathan Ballentine said that was accurate, and “The majority in the House, the majority in my party, are in the ‘hell no’ category.” He says he’s not afraid of raising the gas tax, and noted that he voted for the cigarette tax increase awhile back. But getting the rest to go along will take heavy lifting, especially with the governor’s veto threat. There was discussion of raising fees for driver’s licenses. Otis Rawl noted that we only pay about $2 a year for those, and certainly, he asserted, it’s worth more than that for our families to travel on safe roads (and for our goods to get to market, he was quick to add).

It was predicted that roads, ethics and one other matter — reacting to the Supreme Court decision saying the Legislature hasn’t done enough to educate children in poor, rural districts — will dominate the session. The general consensus among these suburban lawmakers was that whatever is done for the poor, rural districts, it not be taken away from the affluent suburban districts. Which to me indicates more money would have to come into state coffers, although I didn’t hear anyone say that overtly.

And of course, more than money is needed. After talking about how bad things are in Marion County, Sen. Lourie said, “Maybe we don’t need three districts in Marion County.”

That caused me to break my rule about not asking questions at such events. I rose to suggest that everyone talks about school district consolidation until it strikes close to home. I agree that there shouldn’t be three districts in Marion County, but I asked, “should there be three districts in Richland County, and five in Lexington?”

He actually had a good answer. As he said, if the state is going to help out Marion County in ways that Richland and Lexington districts aren’t asking it to do and don’t need it to do, then there’s an extra expectation that Marion should do some things it can do on its own — like getting rid of duplicative administration. Rep. Ballentine agreed, saying there’s a much greater imperative to consolidate in districts with fewer students total than you would find in a single school in the city.

Yes, they’re right. The case for consolidation is much more compelling in the rural districts. But that doesn’t mean it wouldn’t be a good thing in the big counties, as well.

Anyway, that’s my rambling report…