South Carolina Governor Nikki Haley (R) proposed a 10 cent-per-gallon state gas tax increase during her annual State of the State speech January 21, 2015.

Haley’s plan to generate additional transportation funding over three years hinges on decreasing the state’s income tax rate from seven percent to five percent. The Governor stated her proposal would also require the elimination of the South Carolina Department of Transportation’s (SCDOT) legislatively-elected board. She vowed to veto a state gas tax increase if the bill does not include these additional components.

“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.”

Haley’s announcement is a reversal from past statements in which she expressed opposition to an increase in the state gas tax. A report released by the SCDOT August 2014 found South Carolina is facing a $42.82 billion transportation funding gap over the next 25 years.