Gov. Haley proposes more tax cuts as she prepares to leave

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Tuesday, Jan. 10, 2017

COLUMBIA, S.C. (AP) — South Carolina Gov. Nikki Haley launched the legislative session Tuesday by again asking legislators to cut taxes.

Haley's roughly $8 billion proposal for state taxes, expected to be her sixth and final executive budget, calls for cutting both income and corporate taxes over the next decade.

Her proposed phase-in would reduce revenue coming into state coffers by $89 million in 2017-18.

The cuts "will spur growth across the state and lead to even more jobs for the people of South Carolina," Haley wrote in her budget letter, released ahead of the session gaveling in.

Legislators have rejected her previous proposals, arguing that they would force cuts to essential services.

Once fully phased in, her goal of cutting income taxes by 1 percentage point across all tax brackets would reduce revenue by $950 million annually, while cutting corporate taxes in half — to 2.5 percent — would reduce revenue by $194 million — for a total of more than $1.1 billion a year.

That's less than last year's proposal, when she told legislators she could agree to a gas tax increase only if they agree to income tax cuts that would slash $1.8 billion yearly from state coffers once fully phased in over 10 years.

Legislators called it a nonstarter in the road-funding debate. Once again, fixing South Carolina's roads is at the top of legislators' agenda.

Haley isn't making any road-funding suggestions this year. Instead, she insists legislators first need to change the Department of Transportation's governance model to give the governor complete oversight. Haley criticized last year's "so-called reform," which has the governor appointing DOT commissioners approved by legislators, as preserving the status quo.

But she's not expected to remain governor much longer to fight for any proposal outlined in her budget.

The Republican governor will appear before U.S. senators next week as they consider confirming her as President-elect Donald Trump's pick for United Nations ambassador. It's unclear whether her would-be successor, Lt. Gov. Henry McMaster, would continue Haley's policy positions — or to what extent.

MEDICAL MARIJUANA

Also on opening day, a bipartisan group of legislators touted the latest proposal legalizing medical use of marijuana, indicating support for the previously rejected idea is growing in the GOP-controlled Legislature.

Supporters said it's time for politicians to allow people who are seriously ill or suffering from chronic pain to benefit from a plant that is a far better option than additive prescription opioids.

"I'm tired of seeing people suffering," said Rep. Eric Bedingfield, R-Belton, whose 26-year-old son died last Easter after a years-long battle with opioid addiction that began with a high school soccer injury.

If doctors could prescribe cannabis instead of OxyContin and other addictive opioids to treat pain, or instead of methadone to help people trying to get sober, lives could be saved, he said.

Twenty-eight states already have medical marijuana laws.

Law enforcement officials have opposed previous bills, saying marijuana supposedly for medical use would instead be used socially.

Sen. Tom Davis, R-Beaufort, said he hopes this year's bill addresses their concerns with seed-to-sale tracking, lab testing and patient registration.


LOOMING QUESTIONS

The session begins amid uncertainty over who else may face corruption charges and how long Haley will remain governor.

After last month's 30-count indictment of GOP Rep. Jim Merrill, prosecutor David Pascoe has made clear his investigation into Statehouse corruption continues.

Merrill, majority leader from 2004 to 2008, is accused of illegally profiting from his position. The 16-year veteran was suspended from the House after the indictments announced Dec. 14. He adamantly denies doing anything illegal.

Haley is expected to be confirmed as ambassador, but how long the process may take is unknown.

Also unclear is how the job of lieutenant governor would be filled. If Haley resigns, McMaster would automatically become governor. The state Supreme Court may decide whether he gets to appoint his successor.

(Copyright 2017. The Associated Press.)

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