I-73 has a funding plan. But will Horry governments be able to foot the bill?
$350 million.
That’s the amount of money the South Carolina Department of Transportation says the local governments in Horry County will need to contribute to Interstate 73 to make the highway a reality.
The problem? It’s not yet clear if the local governments will be able to come up with that sum.
To date, local leaders have discussed contributing between $200 and $250 million to the project, but not the greater amount SCDOT has said will need to come from the local governments. That’s left a question that mayors and council members around the county are now working to answer: How will the local governments in Horry County pay for their portion of I-73?
According to SCDOT’s new funding outline, which the agency prepared earlier this month, I-73 is expected to cost $1.6 billion to run from I-95 near Latta and Dillon to its end point at SC-22 near Conway. The project phases and funding sources break down like this:
- Phase 1: A 6-mile portion connecting I-95 to a section of US-501. Estimated cost: $260-$300 million. Funding source: State funds ($300 million).
- Phase 2A: An 8-mile portion connecting US-501 to a section of SC-41. Estimated cost: $215-$295 million. Funding source: State funds (55% of total cost, or $160 million) and federal grants or earmarks (45% of total cost, or $135 million).
- Phase 2B: An 11-mile portion connecting SC-41 to the Little Pee Dee River. Estimated cost: $350-$480 million. Funding source: State funds (70% of total cost, or $335 million) and federal grants or earmarks (30% of total cost, or $145 million).
- Phase 3: An 18-mile portion connecting the Little Pee Dee River to SC-22. Estimated cost: $365-$500 million. Funding source: Local funds (70% of total cost, or $350 million) and federal grants or earmarks (30% of total cost, or $150 million).
That means the portion of I-73 that will run through Horry County could cost as much as $500 million, with up to $350 million coming from the local governments.
SCDOT Secretary Christy Hall said in an email that the agency arrived at those figures based on what funds have already been allocated to the project, and restrictions on other pots of money that may be used for the project.
“The estimate was derived from reviewing SCDOT’s updated project estimate ($1.6B) by phase, the likely funding partners for each phase based on their financial wherewithal, an analysis of historical federal grant/earmarks and an understanding of the ARPA funding restrictions,” she said.
Asked if county governments or municipalities outside of Horry County would be asked to contribute to the $350 million local funding portion, Hall pointed to the agency’s outline. The outline only includes local funds for the portion of I-73 that runs through Horry County.
SCDOT estimates that the federal and state governments have already contributed $117 million to the project over the last several decades.
Could Horry County raise more money?
Though local leaders are still debating the details, one local funding plan would have Horry County, Myrtle Beach and North Myrtle Beach each use a portion of the money each municipality receives from the hospitality fee each year to raise around $200 million. Horry County would use $4.2 million of it’s roughly $13 million annual receipt of hospitality funds and issue a bond to pay for $80 million of the total. Leaders from Myrtle Beach and North Myrtle Beach have yet to release specifics of their funding plans, though North Myrtle Beach Mayor Marilyn Hatley has said the city is considering using its hospitality fee money as well. Myrtle Beach Mayor Brenda Bethune has said the city is still determining what funds it will use for I-73.
Asked about the gap between SCDOT’s and local funding plans, some leaders said they think the municipalities will be able to come up with the extra funds.
“I do think there’s ways to come up with the shortfall and I think everyone’s got to kick in a little bit and maybe the federal government comes up with more,” said Horry County Council member Dennis DiSabato, who helped put together the county’s portion of the local funding plan. “The federal government and state government portions might increase as well, you never know. What we’re trying to do here is advance the ball.”
DiSabato suggested that Horry County might be able to increase its contribution by factoring in expected in the hospitality fund, which is collected from a 1.5% sales tax on hotel stays, event tickets and restaurant meals in the unincorporated areas of the county. While that fund might collect around $13 million for the county now, it could bring in $15 million or more in future years, meaning that the county could borrow against the expected increase, DiSabato said. Rather than being able to borrow and pay back $80 million, the county could borrow and pay back $120 million or even more, he said.
“There’s projected growth revenue in that fund so we if took all of that growth revenue and added it to the $4.2 million it might increase our bonding capacity,” he said.
DiSabato asked county finance staff to crunch the numbers on such a plan, he said last week.
“What we’re trying to do right now is dedicate the funding source and then we can work out the fine points of who’s going to contribute what to get us to the numbers we need,” DiSabato added. “It’s going to be incremental.”
In Myrtle Beach, Bethune said she couldn’t provide specifics on how the city would raise additional dollars to reach SCDOT’s funding goal, but said city leaders should have a plan put together soon.
“Council has not yet decided what our level of funding will be,” she said. “I do expect that we will have a plan soon.”
Could Conway contribute?
It’s possible, too, that other local municipalities could contribute to the $350 million total. Conway Mayor Barbara Blain-Bellamy said city administrators have attended meetings about funding I-73 but that the city has yet to make any concrete plans or commitments to the project.
“I know that the leadership in the City of Conway … has more questions than answers about our commitment to supporting I-73 either in word or in our funding,” she said.
Blain-Bellamy added that she worried local roads in and around Conway may not be able to handle additional traffic from visitors if I-73 is completed. She said such a scenario, in which thousands of additional cars crowd onto already-burdened roads “gives (her) pause.”
“This is really early for us,” she said. “It hasn’t come up in a city council meeting yet, and ... we’re overwrought with questions.”
On Horry County Council, Chairman Johnny Gardner, too, said he has his doubts about local governments being able to come up with $350 million. He said he supports I-73, but only once state and federal money is committed to the project. To date, Gov. Henry McMaster has pledged $300 million to I-73, though that funding plan must win approval in the state legislature next year. Federal leaders have yet to announce funding for constructing I-73.
He also said he has concerns about the total price tag of I-73. Previously, SCDOT estimated that the highway would cost $1.2 billion, or $400 million less than its current estimate.
“If the current local senators, the federal delegation if you will, if they could tell us they’re going to give us $500 million and if the state legislature could give us $500 million then I would be the first one to lead the charge to make up the balance,” Gardner said. “That’s if it’s at $1.3 billion.”
He added: “We’ve got some on County Council who want to allocate millions of Horry County money for something that’s not even close to what we have to do and where’s the balance at? This is October. We’ll know more in January. And the prudent course, the wise course, would be to wait until January.”
