South Carolina's GOP Governor Warms to Raising the Gas Tax

January 22, 2015

Gov. Nikki Haley is proposing fixing the state’s roads with an increase in the gas tax over three years, provided lawmakers also reduce the state’s income tax rate and restructure the state’s highway commission.

MORE: Text, highlights and video of every governor's annual address.

In her annual State of the State speech Wednesday night to a joint session of lawmakers, Haley unveiled her long-awaited roads plan promised last year during her re-election campaign.

The Republican governor has repeatedly vowed to veto any gas tax increase and repeated that promise in her speech, if the bill that comes to her is a stand-alone tax proposal.

But she said she will approve of a tax increase of 10 cents per gallon over three years if the Legislature first restructures the state Department of Transportation to get rid of the legislatively elected board and also reduces the state’s income tax rate from 7 percent to 5 percent.

“This is a three-part package deal,” Haley said. “In order to get my signature on any gas tax increase, we need to restructure the DOT, and we need to cut our state income tax by two percent. If we do all of those things, we will have better roads and a stronger economic engine for our people. That is a win-win.”

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