At first blush, lawmakers' plan to pay for repairing the state's roads and bridges looks like a big leap forward.
An optimistic spin says we'll see $800 million available for the work — $41 million from the state tax on vehicle sales to pay for secondary road repairs; up to $50 million in surplus money to repair bridges; and $50 million in recurring general revenue money, which will go to the State Infrastructure Bank to use to borrow up to $500 million. Federal matching money also is expected.
But on closer inspection, you can see pitfalls ahead. While $800 million is a lot of money, it still might not be enough. The state needs $29 billion over the next 20 years to get its 41,000 miles of roads and 8,000 bridges in good condition, according to a year-long study by the Transportation Infrastructure Task Force, a group created by the state Transportation Commission. That's more than $1 billion a year for 20 years.
A consortium of business groups proposed the state spend $6 billion over the next decade for the most critical projects — $2.8 billion to widen interstate highways; $2 billion on bridges and $1.2 billion on resurfacing roads. That's $600 million a year.
And the plan lawmakers approved last week does nothing to boost the user fee dedicated to building and maintaining the state's roads — the state's gasoline tax, which has been stuck at 16.75 cents a gallon since 1987. If the tax had been adjusted for inflation, it would be at 33 cents a gallon by now.
Legislative leaders and the governor adamantly oppose raising taxes to pay for the roadwork. But is that sustainable for the long haul? What happens if we don't have a budget surplus, if the economy isn't as strong as projected? What do we do after the Infrastructure Bank spends the $500 million, and we're paying off those bonds for the next 10 years, but we still have billions of dollars in work to do?
Some people didn't like the idea of putting the State Infrastructure Bank in charge of paying for road and bridge repairs. The group has been criticized for its decisions on new roads, the job it was created to do.
Lawmakers say they've taken care of that by requiring the state Department of Transportation to send to the Infrastructure Bank a list of projects, which would be based on the state's priority criteria (criteria the Department of Transportation has a hard time following, too). The Infrastructure Bank's decisions also would be reviewed by the Legislative Joint Bond Review Committee.
The money can't be spent on any projects approved before July 1. That's because some lawmakers don't trust the Infrastructure Bank not to spend the money on its own pet projects. The Infrastructure Bank was chosen as the vehicle because it can borrow up to 10 times the amount it gets.
A bipartisan Senate panel came up with a more balanced, sustainable approach: Borrow up to $1.3 billion and increase fees to raise about $75 million a year. The fee increase includes tying the state's gasoline tax to inflation. The idea is to get roads and bridges repaired and have money to maintain them through the increased fees. The sales tax collected on vehicle would become a “vehicle registration fee” to be used for roadwork. The senators' proposal was expected to increase the gasoline tax to 20 cents a gallon by 2023.
But it was not to be, at least not this year. South Carolina needs an adequate, sustainable source of money that also taps the people from out of state who drive our roads and bridges and contribute to their wear and tear. A flat tax that hasn't been raised in nearly 30 years isn't doing the job. The legislature's plan proves it.