Members of Group Seeking Gas Tax Hike Receive Tens of Millions from DOT

March 23, 2015

Investigative Reports

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Road WorkSince fiscal 2013, at least two dozen corporate members of a nonprofit group pushing for an increase in the state’s gas tax collectively have received nearly $364 million from the S.C. Department of Transportation, records show.

That amount represents about 85 percent of the total $428 million in taxpayer money from various public agencies that the more than 30 members of the South Carolina Alliance to Fix Our Roads (SCFOR) received from July 1, 2012, through February, The Nerve found in a review of state comptroller general and SCFOR records.

Construction companies that are SCFOR members topped the list of receiving the largest amount of DOT funding during the 32-month period. Following are the top-six recipients, according to comptroller general records:

  • C.R. Jackson Inc. – $90.56 million;
  • Sloan Construction Co. – $71.07 million;
  • Palmetto Corp. (listed as Palmetto Paving Corp. in comptroller general records) – $65.29 million;
  • Banks Construction Co. – $30.68 million;
  • Ashmore Brothers Inc. – $29.96 million; and
  • Sanders Brothers Construction Co. – $27.89 million.

The Nerve’s review found that in fiscal years 2013 and 2014, at least 11 and 13 companies, respectively, that are SCFOR members each received $1 million or more from DOT; representatives of the top-six recipients serve on the organization’s Executive Committee or Board of Directors, according to SCFOR’s website. The fiscal year starts July 1.

Contacted Saturday by The Nerve, Bill Ross, SCFOR’s executive director since 2012 and registered lobbyist for the organization, which began in 1981 under a different name, said his group has “over 20 companies that still are supporting us,” noting that the organization’s annual revenues from dues total about $102,000.

But he also said, “When I took over the group in 2012, I said the only way we can have the kind of impact we need to have would be to build a broad-based coalition.”

He said SCFOR’s current membership includes not only individual road construction companies, but also trade organizations and various other groups, including AAA Carolinas and AARP South Carolina.

Members also include regional chambers of commerce, Ross said, citing the Myrtle Beach Area Chamber of Commerce and Charleston Metro Chamber of Commerce as examples.

Asked if his organization supports the controversial proposed I-73 project in the Grand Strand area and the extension of I-526 in the Charleston County, Ross replied: “We’ve never supported I-73. … We haven’t done much looking at 526.”

Ross, a former longtime head of the South Carolina Petroleum Council, said his organization does support increasing the state’s gas tax – currently at 16.75 cents per gallon – and various transportation-related fees to raise a projected $700 million to $800 million annually to “really start making a difference” in fixing the state’s crumbling and congested road and bridge system.

“It has to be a combination of things,” he said.

The problem with Gov. Nikki Haley’s plan, Ross said, which would raise the state’s gas tax by 10 cents over three years in exchange for cutting the state’s income-tax rate by 2 percentage points over 10 years and reforming the DOT, is that the projected additional $400 million yearly with the recommended gas-tax increase “doesn’t do anything more than keep us where we are.”

Critics of increasing the gas tax and fees to pay for road repairs – including the South Carolina Policy Council, the parent organization of The Nerve – contend the state has other options to address road needs.

Asked if he has met with legislative leaders who support increasing the gas tax, including Senate President Pro Tempore Hugh Leatherman, R-Florence and the Senate Finance Committee chairman; Sen. Larry Grooms, R-Berkeley and the Senate Transportation Committee chairman; and Sen. Ray Cleary, R-Georgetown and chairman of a Senate Finance subcommittee on transportation, Ross replied, “In order to be effective, you have to meet with the leadership in the Legislature, and we’ve tried to do that.”

Leatherman and Grooms did not respond to written or phone messages last week from The Nerve seeking comment.

Ross said as far as his organization is concerned, “All these things we’ve been talking about for the last three years … probably Cleary’s bill (S. 523) does that better anything else.”

“They support my proposals, just like the (South Carolina) Truckers (Association),” Cleary said when contacted by The Nerve last week, though he added,“I didn’t get the playbook from them; I just looked at all the fees.”

Cleary’s bill, introduced on March 5, would impose a one-time, 10-cent increase in the gas tax effective July 1, and raise it annually based on an inflation factor, capped at 2 cents yearly. It also would increase current driver’s license and registration fees, and create a set of new fees, such as registration fees on automobile utility and landscaping equipment trailers, and a “road impact” registration fee, capped at $1,400 per vehicle.

In addition, the bill would eliminate income taxes for small “pass-through” businesses, such as sole proprietorships; and drop more than 35 sales-tax exemptions.

“I’m not for a gasoline fee increase, but I don’t believe you can fix the roads without a fee increase,” Cleary told The Nerve, adding, “It’s a user fee: If you don’t drive a car, you don’t pay a fee.”

(The Policy Council, however, pointed out in a Nerve column last week that state law defines “fee” and “tax” differently, and that the state constitution bans the Senate from introducing revenue bills.)

In a meeting last week, Cleary’s Senate Finance subcommittee approved a new road-funding proposal that would, among other things, increase the gas tax by a total of 12 cents over three years, and double driver’s license fees.

The proposal was not included then in a new bill or an amendment to an existing bill. Cleary told The Nerve that the plan is to introduce it as a separate bill on Tuesday when the full Senate reconvenes, and insert the new bill in place of the language of S. 523 when the full Finance Committee meets later on Tuesday.

South Carolina Policy Council research intern Danny Morris contributed to this story. Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.

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