Sanford proposes suspending gas tax

JIM DAVENPORT

Associated Press

WEST COLUMBIA, S.C. - Consumers could save a couple of dollars every time they fill their gas tanks in South Carolina this fall if lawmakers pass a proposal to suspend the state's gas taxes.

Temporarily cutting the state's 16.8 cent-a-gallon tax would help pocketbooks after gas prices this spring have hovered near $3 per gallon, said Gov. Mark Sanford, who also supports the idea.

A typical family will save $63 by not paying gas taxes for three months, Sanford said. The governor had wanted state gas taxes cut this summer, but the House decided Wednesday afternoon to suspend taxes from Oct. 1 to Dec. 31. The Senate must also pass the proposal.

Rep. George Bailey, R-St. George, led the push to move the gas tax holiday back because he said it didn't make sense to give tourists a break on paying the taxes that maintain and build state roads.

Suspending tax breaks later in the year could also put more money in people's pockets around the holidays, Bailey said. "If we're going to give anybody a break in this state, this would be a good time to give it to them," Bailey said.

A gallon of regular unleaded gas in South Carolina now averages about $2.71, according AAA's Daily Fuel Gauge Report. That's a relative bargain compared with the national average of $2.88. The only states reporting lower average gas prices were Missouri at $2.65, Oklahoma at $2.68 and Wyoming at $2.70.

In West Columbia, Ray Smith, 73, stopped at a Shell station to pump a few gallons into his Ford truck. He likes the idea of saving any money on gas.

"It's really high," Smith said. "It's squeezing your pocket."

The break would cost $134 million, Sanford said. That money would normally go to highway construction and maintenance, but the governor and lawmakers say the state's economy is growing fast enough that there should be no impact on roads.

"We think it would have real bottom line benefit to a lot of working families who are struggling with the price of gas," Sanford said at a Statehouse news conference.

The plan also fits Sanford's philosophy on getting tax breaks to the people. "I think what this is simply saying is, that in some form or another, there are lot of us, in both the House and Senate, that are not willing to go home until there is some form of tax relief for people in South Carolina," Sanford said.

Other attempts at tax breaks, like property tax relief and a Sanford plan to send a rebate check to taxpayers are in danger of not passing this session.

In an election year, some people are questioning why the governor and others want to suspend the gas tax now, when gas prices were just as high right after Hurricane Katrina struck the Gulf Coast last fall.

"This is nothing more than election year pandering," said Sen. Brad Hutto, D-Orangeburg. "Where was Mark Sanford last year following Hurricanes Rita and Katrina?"

South Carolina isn't the only state considering reducing or suspending gas taxes. For instance, North Carolina Gov. Mike Easley, under pressure from tax groups, is asking the legislature to quash a tax increase that was to go into effect in July. The groups also want taxes rolled back.

In Georgia, legislators are calling on Gov. Sonny Perdue to bring back the one-month break put in place last fall when gas prices spiked after Hurricane Katrina.

Breaks are being discussed elsewhere, too, including Massachusetts, New Hampshire, Nevada and New Mexico.

In South Carolina, legislators started suggesting cutting the tax last month. For instance, Sen. Darrell Jackson, D-Hopkins, asked his colleagues to seek a reduction as the Senate began its budget debate three weeks ago.

In the House, Rep. Alan Clemmons has been trying to get House Republicans to go along with a gas tax cut.

"That would be great," Jeremy Brewer, 26, of West Columbia, said as he pulled into a Shell station. "Two dollars a gallon would be great."

Brewer has to drive 20 miles each way to work and is now spending about $40 a tank to fill up his green Saturn.

The House discussed the proposal for hours Wednesday afternoon as it made final amendments to the state's $6.5 billion budget for the fiscal year that begins July 1. One amendment passed requires gas wholesalers to pass on the entire 16.8 cents saved with the tax suspension to stations and convenience stores.

But it could hit a snag as the Senate and House wrangle about a final version of the spending plan and how to pay for property tax cuts the House has in its proposal and the Senate doesn't.

Senate Finance Committee Chairman Hugh Leatherman doesn't oppose the break, but worries about who will reap the benefit.

"What assurance do we have that the gas tax cut will be passed onto the consumer and that we're not just giving another tremendous windfall to big oil companies," said Leatherman, R-Florence.

Sen. Greg Ryberg, R-Aiken, made his fortune with a chain of convenience stores. He says there are plenty of honest retailers that won't cheat consumers on the break.

"We have across the state of South Carolina some very, extremely honorable retailers and wholesalers," Ryberg said. "I believe they are committed to their customers and that they will drop the prices 16 cents a gallon."