The Transportation Department’s 10-year plan to repair South Carolina’s crumbling roadways is ahead of schedule, the agency said on Tuesday.
But opponents to a 12-cents-a-gallon gas tax increase, implemented through a law that took effect last summer, say those funds may not solely be maintaining existing infrastructure, as promised. That tax is set to be phased in by two cents annually.
The cost of the amount of road work in progress on S.C.’s highways is more than $3 billion—three times that of normal levels, according to a news release by the SCDOT.
“We are now one year into a strategic 10-year repair and reconstruction program designed to start the long journey to improve and repair our 42,000-mile highway system that includes just over 8,400 bridges with new and sustainable funding that we have not had for 30 years,” agency secretary, Christy Hall said in a statement.
The now-18.75 cents-a-gallon gas tax had not been raised, prior to 2017, since the 1980s.
That funding stream—a law to draw an extra $625 million annually upon full implementation—is facing a legal challenge over whether it relates to more than one subject, a violation of state law.
At an April SCDOT Commission meeting, Hall told commissioners, “The SIB (State Transportation Infrastructure Bank, or STIB) has expressed concerns over the ability to actually bond any of those Act 275 or Act 40 revenues in this whole unresolved lawsuit issue.”
“There’s questions over the real availability of being able to bond those revenue streams, which calls into question our ability to service that planned debt load through the infrastructure bank,” she said.
Act 40—the 2017 gas tax package that also raised several motor vehicle fees—was hailed as a stable funding solution to S.C.’s infrastructure problems. Legislative leaders promised it would be used solely for repairing existing roads. Act 275 is a 2016 law that leverages projects costing more than $25 million through STIB loans.
An SCDOT spokesman was unavailable for an immediate comment on Tuesday afternoon. The spokesman did not respond by Thursday morning to an email sent on Tuesday with several questions, including one following up on Hall’s April comments.
The conservative think tank, the South Carolina Policy Council in June questioned where the new gas tax funds are actually going, citing Hall’s comments at the commission meeting.
“During the year since the bill took effect, the gas tax hike has raised over $219 million, according to reports by the Comptroller General’s office. However, only a fraction has been spent, most of which was passed on to the counties. As of April 2018, only $537,110 has been used for actual road project disbursements,” the group’s analysis stated.
“That would make sense in the context of the plan to put new tax dollars into the STIB instead of directly toward road repair. The STIB can leverage that money into ten times the amount – which means that the more revenue accumulates, the more STIB can then generate via bonding.”
A trust fund that tax-hike supporters said would be reserved solely for maintenance now contains roughly $233.8 million, according to the SCDOT’s May statement. The agency has distributed more than $19 million, most of which local governments have received.
A project’s implementation can take years, making it seem like long-neglected road maintenance is lagging.
But that explanation doesn’t satisfy tax-hike critics, who think the 2017 law created a slush fund for the STIB to create new infrastructure.
In fact, according to the law, the SCDOT may commit debt “into a special fund to be used for the sole purpose of paying the principal and interest, as it comes due, on bonds issued for the construction or maintenance of state highways, or both. This special account will be designated as the State Highway Construction Debt Service Fund.”
The agency is using a combination of federal and state funds, including funds from the tax increase, to complete its 10-year plan. That plan targets several programs, including a Rural Road Safety Program. The state’s rural roads are notoriously deadly. The agency said it has contracts targeting 187 miles of rural safety improvements.
Hall said in the Tuesday statement that the projects categorized under the 10-year plan were ranked by agency engineers, instead of being determined by politics, as tax-hike critics have warned.
Secretary Hall’s comments are between minutes 21 and 24 on part two of the April meeting.