SC needs to face facts on paying for roads

info@islandpacket.comMay 2, 2013 

Lawmakers are looking for a route to sustainable funding for the state's road system, but they'll remain lost until they face the reality that big infusions of money are needed, not small annual doses.

A special bipartisan Senate subcommittee is trying to figure out how to pay for roads and bridges. A year-long study concluded South Carolina faces a $29 billion shortfall over the next 20 years to get the state's 41,000 miles of roads and 8,000 bridges in good condition.

That's more than $1 billion a year beyond what already comes in to pay for roads.

The six senators have come up with a plan to 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 gasoline tax has been at 16.75 cents a gallon since 1987. If it had been adjusted for inflation, it would be 33 cents a gallon today. The senators' proposal is expected to increase the tax to 20 cents a gallon by 2023.

Lawmakers should go a step further and look at a gasoline tax that would be a percentage of the sale. That would help combat a problem with the flat tax -- no matter how high gasoline prices go, the tax stays the same. With higher gas prices and more efficient vehicles, less gasoline is pumped. A percentage tax would allow the state to collect more money as the price goes up and would help offset lower use.

The timing also looks right for borrowing because $750 million in bonds issued in 1999 to pay for school construction will be paid off in 2015. That frees up about $70 million a year to pay for new borrowing.

And it would spread the cost of repairing our roads and bridges over many years, providing a way for those who will benefit from the projects years from now to help pay for them.

Implementing the subcommittee's proposal won't be easy. It calls for converting the sales tax collected on vehicle sales to a "vehicle registration fee," The (Columbia) State newspaper reports. The money would be put in an account to be used by the State Infrastructure Bank. That would allow the state to borrow up to 10 times the annual fee that it collects, which economists say would be about $80 million, bringing in $800 million.

The second step would be to use the money freed up when the school construction bonds are paid off to borrow another $500 million.

The increase in the gasoline tax is expected to bring in an extra $131 million by 2023, The State reports.

Some lawmakers don't like the idea of borrowing. Gov. Nikki Haley and House Speaker Bobby Harrell have said they don't want to borrow money for road repairs. But the solutions they've come up with fall far short of what's needed. And their refusal so far to consider raising the state's gasoline tax doesn't help.

The House has included about $100 million in its budget proposal. About $40 million of that money would come from sales taxes collected on car sales. By 2015, that would grow to $80 million a year for roads.

Earlier this year, Haley said she wanted to use $117 million in additional revenue forecast for the coming fiscal year to pay for the highway projects.

Multiply either of those by 10 and you'd be close to the projected amount needed.

It's difficult to see how we'll ever catch up unless lawmakers and the governor are willing to bite the bullet and borrow big to repair our roads and bridges and get more revenue coming in.

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