A news analysis
By Andy Brack, editor and publisher | There’s a growing skepticism that the General Assembly, now in its second year of trying to figure out how it can fix crumbling roads, will reform transportation spending.
Cynics predict a “kick-the-can” approach in which lawmakers will dedicate some recurring general tax revenues to repair of roads and bridges, but won’t pass a reform package that raises a gas tax or makes structural changes at the state Department of Transportation and State Infrastructure Bank.
“There’s a growing sentiment that the Senate will send the House a pared-down version of the highway bill,” one key House legislator said. “I wouldn’t be surprised if nothing came of it — that they put a stopgap measure in and waited until next year.”
This week, the House Ways and Means Committee essentially provided for that stopgap alternative by including $287 million in road funding in the $7.5 billion budget bill for 2016-17. The bill, which will be debated on the floor in three weeks, includes an extra $135 million in funds for county highway departments to fix roads, $50 million in funding from last year, $65 million in monies from an automobile sales tax and $37 million to reimburse the DOT for flood-related costs from the fall, sources said.
Highway funding is looming problem
A couple of years ago after a study showed the state faced billions of dollars of needs for years of deferred maintenance on highways and bridges, leading lawmakers promised they would steer major resources into fixing transportation infrastructure. But by the end of the session in June, nothing major had happened. Then after the fall floods hammered roads and undercut dozens of bridges, public outcry grew for transportation action.
These days, the Senate, which has been working on a roads bill for weeks, is in a holding pattern due to recalcitrant Republicans filibustering a transportation reform bill. Earlier this week, state Sen. Tom Davis, a Beaufort County Republican, continued a filibuster with spirited and substantive discussions that encouraged steering more than $750 million in recurring revenues from a $1.3 billion surplus to pay for more roads. He gave up the floor, but state Sen. Lee Bright, R-Spartanburg, took his place in holding up the bill, saying that he and five colleagues would thwart its progress in the weeks ahead.
Insiders say even if the filibuster is broken, there are scores of amendments to the bill that likely would hold it up until late March when the Senate is expected to begin work on the annual budget.
“In an effort to become democratic, the Senate has become dysfunctional,” one insider noted, dispirited by endless debate.
General tax revenue versus a user-based gas tax
Perhaps the biggest challenge for dealing with road funding is for lawmakers to determine the type of funding that should be used to pay for road improvements.
The House’s “kick-the-can” approach calls for General Fund revenues — money from the pot of revenue that pays for everything from public schools and colleges to health care to prisons to social services. Normally, paying for road maintenance does not come from general tax revenues. Instead, fixing roads comes from “user fees” on fuel paid by those who use the roads — drivers of cars and trucks. South Carolina’s “gas tax” is 16.75 cents per gallon, the third lowest in the country. It hasn’t been raised in 27 years. Polls indicate a large majority of South Carolinians are in favor of raising the gas tax by as much at 20 cents a gallon — in part because some of it is paid by people who are traveling through the state.
Many budget writers say using general tax revenues for road needs is risky because of how it impacts the overall budget. It puts an added burden on the rest of state government because it undercuts funding for all of the other agencies, many of which remain at levels below what they got before the Great Recession.
In effect, using general tax revenues for roads shifts the tax burden from drivers to every taxpayer — especially those in the middle — and it has the effect of reducing services across state government because needs that should be funded are not being met.
Hope on the horizon?
State Sen. Joel Lourie, the Columbia Democrat who has co-authored a comprehensive roads package with fellow retiring GOP Sen. Ray Cleary of Georgetown County, says he believes there’s a 50-50 chance of a roads bill passing this year. The package includes an increase in the gas tax, a cut to personal income tax, and reform at the state DOT and Infrastructure Bank.
“The Senate is on trial right now in the court of public opinion,” he said in an interview. “It’s a test of whether our system of government can work.”
President Ronald Reagan, Lourie pointed out, was a “king of compromise” who often was fine with getting 70 percent of what he liked.
“Everybody [in the Senate] has got to like two out of three” of the big things in the roads package, he said. “There’s a little bit in here for everybody, but the question is can we get enough to forge a compromise.”
Also hopeful? The S.C. Chamber of Commerce. Spokesman Genevieve McGroarty told Statehouse Report, “We are optimistic and let’s get to voting on the amendments.”
The fallback if the measure dies? Kicking the can down the road until next year, but using $200 million or so of recurring general fund dollars to get more road projects started now.
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