Ex-DOT Director Questions Need for Gas Tax Hike

May 18, 2015

Investigative Reports

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SCDOTB.K. Jones says he was clear about the direction the S.C. Department of Transportation should have taken when he became the agency’s director in September 1994.

“Maintenance always takes priority over construction,” said Jones, who spent 30 years with DOT, in a recent interview with The Nerve. “It always did with me.”

Asked about recent proposals by Gov. Nikki Haley and state lawmakers to hike the state’s current gas tax of 16.75 cents per gallon, Jones replied, “I’m not convinced we need a tax increase.”

“I have told more than one senator, ‘Not one more cent until you find and correct the problems that are currently there with contracting and maintenance, and get the funding right,’” said Jones, who retired from DOT in 1997 and lives in North Carolina.

“You have to maintain what you have before you build new roads and bridges,” he added.

The state is responsible for more than 41,000 miles of roads – the nation’s fourth-largest state-maintained road system – about 75 percent of which are secondary roads.

The Nerve earlier this month reported that average annual funding appropriated for DOT’s highway maintenance program dropped by more than $40 million, or nearly 16 percent – 25 percent when adjusted for inflation – during Haley’s first four years as governor compared to her predecessor’s administration. DOT currently has about 4,300 employees and a total annual budget of $1.6 billion.

Jones said he believes part of the problem with the current gas-tax-hike proposals is that cost projections he’s seen to fix existing roads aren’t realistic. Gerald Shealy of Lexington County, a former resident maintenance engineer who spent 37 years with DOT before retiring in 1999, agrees.

“The figure they are throwing out now is inflated beyond belief,” Shealy, who worked in Richland, Lexington, Newberry and Lee counties, told The Nerve last week.

Shealy contended, for example, that a cost projection of $250,000 to resurface one lane mile of a two-lane road likely could cover both lanes over a mile.

When he became the DOT director in 1994, Jones said he quickly found himself at odds with a newly appointed DOT Commission, led then by Buck Limehouse, father of current state Rep. Chip Limehouse, R-Charleston, because of his priority on maintenance and repair.

“What I told the commission when I first came in is that we needed to concentrate on the roads we have before we get into any advanced construction, but the commission nixed that,” he said. “Buck Limehouse wanted me to fire half the department. He wanted to privatize the department.”

By January 1997 – less than three years after being appointed director by the commission – Jones had left the agency. He said his replacement, Elizabeth Mabry, and Limehouse pushed the “27-in-7 Plan,” which called for squeezing 27 years’ worth of construction projects in seven years.

“Immediately after I left, that’s when the spending spree started,” Jones recalled. “It broke the highway department.”

Shealy said the “27-in-7 Plan” was “the end of the maintenance budget” for DOT.

Mabry, who was a longtime DOT lawyer before becoming director, retired from the agency in 2006 after the state Legislative Audit Council – the General Assembly’s investigative arm – said DOT had wasted $50 million under her leadership, including $32 million in construction management fees and another $8.7 million paid to contractors for projects that were not finished.

Limehouse, who was appointed to the DOT Commission by then-Gov. Carroll Campbell, served as the commission chairman from 1994 to 1999 and became DOT’s first secretary in 2007 when appointed by then-Gov. Mark Sanford after the department was reorganized under a change in state law. He stayed in that position until 2011.

Limehouse also pushed for the creation of the State Transportation Infrastructure Bank, which funds large construction projects though not maintenance, in 1997; that year, Limehouse joined the STIB Board of Directors. STIB over the years has funneled several billion dollars for projects mainly in the Charleston, Myrtle Beach and Greenville areas, which critics contend was based more on political considerations than on objective criteria.

Limehouse’s son, Rep. Limehouse, now serves on the STIB board along with Senate President Pro Tempore Hugh Leatherman, R-Florence. Leatherman also exerts considerable influence over road and bridge projects as a member of the Joint Transportation Review Committee, a legislatively controlled panel that nominates candidates to the DOT Commission; the Senate Finance Committee chairman; a member of the Senate Transportation Committee, the Joint Bond Review Committee chairman; and a member of the governing panel of the S.C. Budget and Control Board, chaired by Haley.

Jones said the “downfall” of STIB was that certain legislators and members of the Infrastructure Bank “got together and said, ‘This is a really good way of doing individual projects not in the STIP (State Transportation Improvement Program).’”

“They just started funding about anything they could think of,” Jones said.

As for the current state of DOT, Jones said while the agency relies primarily on outside contractors for most road projects – “I hear they are contracting even pothole patching” – it still has its own relatively large work force.

“I have people who still work there tell me, ‘We don’t have anything to do,’” Jones said. “There’s no use having a big highway department if there’s no work for them.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.