Paying for SC roads must take another route

info@islandpacket.comDecember 13, 2012 

It is simple arithmetic. The amount of money available to pay for improving and maintaining South Carolina's road system doesn't add up to the amount of money needed.

We're looking at a $29.3 billion shortfall over the next 20 years, according to a year-long study by the Transportation Infrastructure Task Force, a group created by the state Transportation Commission.

Here are some of the reasons:

  • We rely heavily on a fuel tax that hasn't changed since 1987 even as construction and material costs have increased. The tax brings in $451.5 million a year. If the state's flat 16.75 cents per gallon were adjusted for inflation since 1987, it would now be 33 cents per gallon. The fuel tax accounts for 71 percent of state funding.

  • The state is responsible for 63 percent of the public road miles in South Carolina. Nationally, that figure is 19 percent.

  • Federal aid makes up 31.4 percent of funding across the country, while in South Carolina, federal aid ($608 million) represents 45.5 percent of revenue for highways in South Carolina.

  • Local governments across the country account for 2.7 percent of highway funding, while they account for 6.7 percent of funding in South Carolina.

  • Anyway you add it up, we're falling further and further behind on maintaining our highway system.

    To add insult to injury on the state's fuel tax, revenue has declined because of improved vehicle fuel efficiency and higher costs for gasoline and diesel fuel. Collections stay flat even if fuel prices rise and can decline if high fuel prices prompt less consumption.

    Something has to give.

    South Carolina lawmakers are averse to raising taxes, but this dedicated funding source has fallen too far behind current costs and needs. In recent years, some have suggested a sales tax that rises and falls with the price of fuel or a combination of a flat tax and a sales tax. As fuel prices go up, the sales tax would go down.

    And the fuel tax isn't the only fee that has stagnated. The fee for a state driver's license is the lowest in the Southeast, the report states. The automobile registration fee of $12 hasn't changed in 25 years, when it was dropped from $17 to $12.

    The report suggests that raising the driver's license fee by $1 could raise an additional $3.3 million. An increase in the automobile registration fee could raise about $2 million.

    Other suggestions include a surcharge of $1 per month on each insured vehicle, which could bring in about $42 million a year.

    Hghway funding is a perennial debate. Lawmakers must weigh what a gasoline tax or any fee increase would mean to safety, improved mobiility and economic development. They shouldn't divert highway funding to the general fund. The report cites $25 million in highway funding used to pay Hurricane Hugo debt and $10 million shifted as a result of revenue shortfalls in 2010.

    The report also cites the $300 sales tax cap on vehicle purchases, no matter the price tag. Even capped, it generates about $100 million a year, but none of it goes to state highway funding.

    The report laments taxpayer misunderstanding about the fact that highway funding "user fees" don't grow with inflation. "Consequently, there is a belief amont some taxpayers that sufficient transporation funding is on 'auto-pilot' and that any lack of performance is simply the result of poor management. This public response can have political implications unless elected officials refute it," the report states.

    The department can be its own worst enemy on that last point. In 2011, it was plagued by cash-flow problems. At one point, it had $21 million in the bank, and $113 million in payables due. The agency cut $35 million from its road maintenance program that year despite the fact that South Carolina's state-maintained road system is in woeful disrepair. A department restructuring in 2007 was supposed to improve operations, but we still see complaints about how the commission prioritizes spending on new projects.

    Lawmakers should keep pressure on highway department officials to be better stewards of the money they get. But unless something changes, this problem isn't going to get any better; it's only going to get worse.

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