The Palmetto Insider

The blog of the South Carolina Policy Council

How to Eliminate the State Gas Tax

with 3 comments

As discussed previously on The Nerve, the proposed House budget raids state highway funds to balance the General Fund budget.

The transfer in question is curious for two reasons. First, it shows how state lawmakers are using federal stimulus dollars to keep spending high on other – non-essential – programs. Thanks to the stimulus, federal funding currently accounts for 55 percent ($800 million) of transportation spending ($1.4 billion for FY09-2010) in South Carolina. This number is about 80 percent higher than usual because federal funds ordinarily account for about 30 percent of overall highway funding.

Second, it raises questions about recent calls to increase the state’s gas tax. As reported today, former SCDOT Commission Chair Henry Taylor believes the tax should be increased. This is hardly newsworthy, though – akin to saying: “Former state bureaucrat thinks his agency needs more money.”

Of more interest are two comments made by Taylor:

1)      That state lawmakers might consider a usage tax based on miles driven.

2)      That Florida has better roads than South Carolina.

As it turns out, these two ideas are connected. A new fact sheet issued today by the Policy Council looks at how public-private partnerships (PPPs) could be used to save millions in road construction costs, as well as complete undone road projects. One of the key reforms envisioned by the program is to shift financing of roads away from the gas tax (forget raising the tax – experts think we should eliminate it) – and rely instead on asking consumers to only pay for the roads they use.

As for Florida, our neighbor to the south (along with 25 other states) is already using such PPPs to great effect – saving millions, reducing time and cost overruns, and completing previously undone projects. The lesson: free market reform beats tax increases any day.


Written by Jameson Taylor

March 22, 2010 at 2:56 pm

3 Responses

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  1. Yes, that has worked so well with the Southern Connector….great idea.


    March 22, 2010 at 8:16 pm

  2. Dick,
    Thanks very much for your comment. You raise a point of concern that is often stressed about PPPs. But there is a vital difference between the Greenville project and the new bill. The Southern Connector was established as a non-profit project. In these circumstances, the private partner has no risk or stake in the project — and if projections are too risky upfront, this results in defaulting on the project. All of the privatization projects setup under this model have failed. Read more here:

    I’d encourage you to read our legislative fact sheet listed above on best practices for PPPs and the advantages they can offer. Please don’t hesitate to contact if you have any further questions.

    Geoff Pallay

    March 24, 2010 at 9:32 am

  3. Purpose of partnerships
    The expansion of United Nations partnerships is expected to avert the failure experienced by the League of Nations — the forerunner of the United Nations. As Melinda Kimble, Senior Vice President of the United Nations Foundation said in her June 29, 2004 “Public-Private Partnerships and the United Nations” statement: “It is currently popular to talk about public-private partnerships as a new mechanism to advance the work and support the core goals of the United Nations.

    This assumption, like many others, ignores the number of public-private partnerships that supported this institution since the inception. At the outset, there was broad recognition that civil society, especially in the Western democracies, needed to be actively engaged in building this new institution, if it were to withstand potential political attacks that contributed to the failure of the League of Nations. The concept of national United Nations Associations (UNAs) was born.” (ECOSOC 2004 High Level Segment, HLS Plenary Debate, 6-29-2004)

    International developments place education input beyond the reach of parents, educators, and elected officials. The citizens who fund education and send their children to public and private schools are being stripped of decision making as UNESCO and UNESCO’s partners set global education standards and content for courses, assessments, and teacher training.


    April 6, 2010 at 6:50 am

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