Throwback Thursday: Gas tax dollars originally aimed at STIB debt, not roads

June 13, 2019

Inside Insight

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Layer of broken asphalt road at rural areas.

When lawmakers passed the 12-cent gas tax increase two years ago, they promised that every dime would go to repairing existing roads. Today, most of the gas tax revenue sits unspent while roads continue to crumble – so much so that this week, the SC Policy Council launched Project Road Repair to help citizens get answers and hold lawmakers accountable for the roads they drive on every day.

This week’s throwback is an unfortunate reminder that this was lawmakers’ plan all along for the gas tax dollars. The bill was designed to funnel gas tax revenue to the legislatively controlled State Transportation Infrastructure Bank (STIB), where those funds would be leveraged into debt to pay for interstate widening projects.

While this was evident from the bill’s language, the Department of Transportation (DOT) confirmed it in a commission meeting last June. In that meeting, DOT commissioners adopted an alternative funding plan for their interstate widening program, as the availability of gas tax dollars was uncertain due to legal challenges regarding the constitutionality of the gas-tax law (and a related 2016 law).

Gas tax hike still not fixing roads, won’t fund bridges until 2024

When S.C. lawmakers passed the gas-tax-hike bill last year, they promised every penny would go toward fixing deteriorating state roads and bridges.

Critics, though, said then that filling potholes that riddle South Carolina’s roadways was never the real priority.

Instead, they contended, the law as written allows millions of dollars generated primarily by gas and vehicle sale tax increases to be diverted to the legislatively controlled State Transportation Infrastructure Bank (STIB) to cover revenue bonds for big-ticket projects – in violation of the state constitution.

Department of Transportation Secretary Christy Hall told The Nerve on Monday that the controversial 2017 law raising the gas tax by 75 percent – known as Act 40 – is not a “windfall of funding” to the STIB. She also said the law doesn’t require DOT to transfer funds to the STIB.

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