S.C. Highway Maintenance Funding Drops Over the Years

May 6, 2015

Investigative Reports

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By RICK BRUNDRETT

Layer of broken asphalt road at rural areas.

South Carolina cutting back on road maintenance?

Average annual funding for the state Department of Transportation’s highway maintenance program dropped by more than $40 million, or nearly 16 percent, during Gov. Nikki Haley’s first four years as governor compared to her predecessor’s administration, a review by The Nerve found.

The drop is even bigger – about $73 million and 25 percent – when adjusted for inflation.

Yet the Republican Haley and state lawmakers want to give more than $255 million next fiscal year, which starts July 1, to the State Transportation Infrastructure Bank (STIB), which finances expansion projects, not maintenance. The proposed appropriation is nearly 400 percent higher, adjusted for inflation, than what was budgeted for fiscal 2011-12 after Haley became governor.

The Senate this week is debating the fiscal 2016 state budget, which is projected at more than $24.6 billion when state, federal and “other” funds are included (not counting an estimated $1.5 billion in “off-budget” federal food-stamp payments). DOT’s total proposed budget is $1.62 billion.

Instead of trying to find money in the existing state budget to address increased road maintenance needs statewide, Haley and legislators are pushing different tax-hike proposals. Haley has called for a 10-cent gas-tax increase over three years in exchange for largely unspecified DOT reforms and a 2-percentage-point reduction in the state’s income-tax rate over 10 years.

The House plan would lower the gas tax to 10 cents but create a new 6 percent excise tax on fuel based on wholesale prices. It also would raise the automobile sales-tax cap to $500 from $300 and mandate another $50 million transfer from non-tax sources in the state’s general fund to STIB. The plan would slightly reduce income tax brackets, working out to a reported yearly savings of just $48. Collectively, the tax hikes would raise a projected net amount of more than $300 million next year.

The Senate plan, as passed by the Senate Finance Committee, would raise the gas tax 12 cents over three years, double the vehicle sales-tax cap and impose other tax increases, with no income-tax cut proposal. The plan is estimated to raise $800 million, lawmakers say – which critics contend would make it the largest tax-and-fee hike in state history.

Senate President Pro Tempore Hugh Leatherman, R-Florence, is the Senate Finance Committee chairman. He also exerts considerable influence over transportation funding and related issues as a member of the STIB board, the Senate Transportation Committee and Joint Transportation Review Committee, which nominates candidates to the Department of Transportation Commission; chairman of the Joint Bond Review Committee; and a member of the Budget and Control Board’s five-member governing board, which is chaired by Haley.

As for statewide transportation funding, The Nerve’s review of ratified appropriation bills, as listed on the General Assembly’s website, found that:

  • During then-Gov. Mark Sanford’s eight-year administration, the average annual appropriation for DOT’s highway maintenance program was $255.5 million, ranging from $185.7 million to $369 million. Adjusted for inflation, the average annual amount was $290.4 million.
  • In Haley’s first four years in office, the average annual appropriation for the highway maintenance program was $215 million – $40.5 million, or 15.8 percent,  less compared to the average appropriation during Sanford’s tenure. Adjusted for inflation, the decrease between averages was $72.9 million, or 25 percent.
  • Haley and lawmakers have proposed $216.8 million for the highway maintenance program next fiscal year. Adjusted for inflation, that would be an increase of about $15 million since fiscal year 2012-13 but $38.3 million less than the appropriation in fiscal 2011-12 after Haley became governor.
  • When Sanford, a Republican, was governor, ratified appropriations for STIB dropped dramatically, from $300.4 million in fiscal 2003-04, unadjusted for inflation, to $20.3 million in fiscal 2008-09 – the height of the Great Recession – then rose in the remaining years of his second term to $80.3 million.
  • The ratified appropriation for STIB in fiscal year 2011-12 after Haley became governor was $50.3 million and stayed roughly the same during the next two fiscal years, then jumped dramatically to $150.4 million this fiscal year. Next fiscal year’s proposed appropriation is $255.4 million, which would be a hike of 393.7 percent, adjusted for inflation, since fiscal 2011-12.

The South Carolina Policy Council – The Nerve’s parent organization, has pointed out that since its beginnings, the Infrastructure Bank has contributed funding only to projects that created new roads or expanded existing ones; and that every dollar spent through STIB is a dollar not used for road maintenance.

STIB generates much of its funding through the issuance of bonds financed by appropriations from the General Assembly. STIB bonds make up the biggest category of the state’s bond debt, with more than $2 billion in total liabilities in fiscal 2014, the Policy Council’s research found.

South Carolina has the nation’s fourth-largest state-maintained road system, responsible for more than 41,000 miles of roads, about 75 percent of which are secondary roads. As for damage to the state’s roadways, large freight trucks and buses play a significant role, according to DOT documents reviewed by The Nerve.

“Heavy trucks and buses are responsible for the majority of pavement damage on any highway system,” Stan Bland, then a DOT pavement engineer, said in a written presentation at a 2011 transportation conference. “An 18,000 (pound) single-axle load does over 3,000 times more damage to a pavement than a 2,000 (pound) single-axle load.”

His statements were echoed in a December 2013 study done by Clemson University on behalf of DOT.

“The largest loads on public road systems disproportionately inflict the largest damage on road and bridge infrastructure,” the study said. “Pavement models showed overweight trucks reduce pavement service life significantly, and current SCDOT pavement design standards do not include these heavy loads.”

The study also concluded that although DOT issues permits for overweight trucks, “current fees do not reflect the amount of imparted damage.”

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