Will Senate Bill to Abolish Infrastructure Bank Gain Traction?

January 24, 2013

Investigative Reports

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SC Transportation MapDespite a Senate bill that would eliminate the controversial S.C. Transportation Infrastructure Bank as a separate state agency, that idea received no attention in a hearing Wednesday before a House budget-writing subcommittee.

Infrastructure bank staff member Debra Rountree defended the tiny but powerful agency when she presented its 2013-14 budget plan to the House Ways and Means Transportation and Regulatory Subcommittee.

She said the SCTIB, created in 1997, accepts applications on projects costing more than $100 million and evaluates them on 37 criteria. Infrastructure bank staff doesn’t copy state Department of Transportation standards on projects, but the bank works cooperatively with DOT on projects under consideration for funding, she said. Although treated as a separate agency for budget purposes and governed by a separate board, the bank is administered through DOT.

“It (the infrastructure bank) doesn’t go out and say, ‘Anderson County, we think this is a great project; submit an application,’” Rountree said, noting the agency provides financial resources for transportation projects but does not own or maintain roads.

Critics, including the Coastal Conservation League, have blasted the SCTIB as a wasteful agency that has funneled several billion dollars over the years mainly to the Charleston, Myrtle Beach and Greenville areas –  decisions, they say, were based more on political whims than on objective criteria.

Under state law, four of the bank’s seven-member governing board of directors are appointed by the House speaker and Senate president pro tempore. For about six years, the appointment authority for those four seats rested with two Republican lawmakers from Charleston County: House Speaker Bobby Harrell and former Senate President Pro Tempore Glenn McConnell, who became the lieutenant governor last year after Ken Ard’s resignation.

Rep. Chip Huggins, R-Lexington, one of the three House budget-writing subcommittee members assigned to review the infrastructure bank’s fiscal 2014 budget request, criticized transportation “pet projects” during an earlier budget presentation Wednesday by the Department of Transportation. Huggins said “pet projects” don’t address obvious needs.

Robert St. Onge, head of DOT, recently predicted that the state will need about $30 billion more over the next 20 years for basic road maintenance.

South Carolina has unique challenges funding transportation projects because of about 90,000 lane miles statewide, 46 percent of it is not eligible for federal funding. Additionally, nearly half of the primary roads in the state are in poor condition, with 53 percent of secondary roads in very poor condition, according to the Department of Transportation.

St. Onge also has said the state has nine closed bridges and another 420 bridges posted with weight restrictions.

Of the more than $3 billion in transportation projects funded since 1997, 35 of the state’s 46 counties have received no money through the infrastructure bank, records show. The agency has been criticized recently for its approval of borrowing money above its established bonding capacity for the proposed controversial Interstate 526 extension in Charleston, a project supported by Harrell and McConnell.

A bipartisan bill (S. 209) introduced this month by Sens. Harvey Peeler, R-Cherokee, and Vincent Sheheen, D-Kershaw, would  place the SCTIB fully under the Department of Transportation’s control and would eliminate the bank’s board of directors. It also wouldn’t allow any proposed bank-funded project unless money was available to see it through to completion.

“The problem is it (the infrastructure bank) has outlived its usefulness,” said Peeler, noting the controversy with the proposed I-526 project, when contacted Wednesday by The Nerve.

The Senate majority leader said economic development officials have noted the importance of issues involving the infrastructure bank. He said the goal now is to get a hearing on S. 209, and he believes bipartisan support will push that. But even if it passes the Senate, it faces an uphill battle in the House, where Harrell has large control of the fate of bills.

“The infrastructure bank isn’t the only problem, but I believe it is one of the problems,” Peeler said.

Meanwhile, Sen. Larry Grooms, R-Berkeley, the Senate Transportation Committee chairman, has introduced bill S. 14, which identifies a way for the state to set aside money for transportation needs.

The House subcommittee on Wednesday approved the infrastructure bank’s fiscal 2014 budget request, which would move two DOT employees to the bank beginning next fiscal year. The bank’s proposed fiscal 2014 budget is $50.4 million, $72,400 more than this fiscal year’s “actual” budget, Office of State Budget records show.

Olson can be reached at (803) 254-4411 or curt@thenerve.org. He is on Twitter @thenerve_curt and @olson_curt.