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reprint or license thisDrivers may get gas tax break
House OKs 3-month suspension in fall of 16.8 cents a gallon levy
By JOHN O’CONNOR
johnoconnor@thestate.com
Drivers could gain a bit more mileage from their paychecks this fall.
The House on Wednesday approved a three-month suspension of the state’s gas tax. The measure, which critics dubbed election year pandering, still must be approved by the Senate.
The state’s 16.8 cents a gallon gas tax would be suspended in October, November and December under the plan.
The cut would save a driver filling up a 15-gallon tank about $2.50 each week.
A three-month suspension would cost the state about $100 million. Money from the state general fund will be used to offset the loss of revenue earmarked for road projects.
State leaders said higher general tax revenue projections would likely offset the need to trim the budget elsewhere.
“We’re expecting a huge increase in revenue at the end of the year,” said House Speaker Bobby Harrell, R-Charleston. “I can’t think of anything better to do with that than cut taxes.”
Approval of a gas tax suspension accelerated quickly in the House on Wednesday. The Senate’s failure to pass a statewide property tax cut plan this week, coupled with Gov. Mark Sanford’s public push for a gas tax suspension, seemed to provide fuel for the break.
House leaders had been informally discussing a gas tax break for two weeks. The proposal will head back to the Senate in the state budget, with a conference committee likely to work out the differences.
Senate Finance chairman Hugh Leatherman, R-Florence, said he will consider the idea.
“I really wonder how effective this will be,” Leatherman said. “I’ll keep an open mind.”
Nationally, fuel prices are projected to remain about $2.71 per gallon through September, according to the U.S. Energy Information Administration. That’s about 34 cents higher than a year ago.
The average price for regular unleaded in the Columbia area Wednesday was $2.70 per gallon, according to the Oil Price Information Service.
For East Lake resident Valerie Jones, any reduction in gas prices is welcome. Jones works at the Holiday Inn downtown, sometimes staying overnight at the hotel to save money on gas when a 6 a.m. shift follows one that ends at midnight.
She fills her sedan’s tank about twice a week, spending about $50. Saving $5 to $7 means more lunch money for her two children.
Business owners see greater benefits.
Shandon Florist spends $400 to $500 per month on gasoline, most of it consumed by Maggie, a 1994 Dodge Ram van, said owner Laura Bussey.
At $3 per gallon, the gas tax holiday would save Bussey about $22 to $28 per month.
“It doesn’t sound like a whole lot of savings, not for a business,” Bussey said.
Bussey said President Bush and other government leaders should pressure oil companies.
“When they keep piling profits on top of profits and the price keeps going up, there’s something wrong with that picture,” she said.
Still, the tax break almost did not pass the House, with several members saying the break would benefit out-of-state residents at the expense of in-state taxpayers.
“This is about the most cynical thing I have ever seen,” said Rep. Skipper Perry, R-Aiken, who noted Sanford’s criticism of House spending.
Sen. Brad Hutto, D-Orangeburg, called the move election year pandering from Sanford.
During a hectic afternoon, members quickly drafted and debated nearly a dozen amendments to the proposal. Some had to be rewritten after approval to correct errors.
The original proposal was amended to move the gas tax break from the summer to the fall to make sure state residents — and not tourists — get the most benefit.
Another amendment would require wholesalers to reduce the price of gas by 16.8 cents per gallon, though some doubted retailers would pass along the full savings.
“What assurance do we have that this would be passed along to the consumer?” Leatherman asked.
South Carolina isn’t the only state considering reducing or suspending gas taxes.
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.
Staff writer Jim DuPlessis and The Associated Press contributed. Reach O’Connor at (803) 771-8358.
