Year 1 of the gas-tax-hike law: Hundreds of millions collected, little spent

August 22, 2018

Investigative Reports

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By RICK BRUNDRETT

One year after the state law took effect hiking the gasoline tax and other fees that lawmakers promised would go toward fixing South Carolina’s deteriorating roads and bridges, motorists continue to see little results for their money.

Documents with the state Department of Transportation and Comptroller General’s Office show that of the $312.6 million in total receipts as of June 30, just under $7 million, or 2.2 percent, has been spent on listed projects. No specifics are given in the online records on how exactly the money was spent.

The amount spent represents about 1.6 percent of the $442.7 million in project “commitments” authorized by DOT as of June 30, split mainly between “pavements” and “rural road safety” categories, though no details are given in online records on the types of work to be done for each project, and projects aren’t ranked.

The “commitments” grew by $61.7 million since the end of May, much of it for U.S. 17 – a main tourist route in the Lowcountry – records show.

Christy Hall, who heads DOT, did not respond Monday to an email message from The Nerve asking why relatively little has been spent from the “Infrastructure Maintenance Trust Fund” (IMTF), created under the gas-tax-hike law known as Act 40.

At an April DOT Commission meeting, Hall said two pending lawsuits challenging the constitutionality of the gas-tax-hike law and a related 2016 law have forced her agency to seek an alternative funding method for widening interstates.

Act 40, which took effect July 1, 2017, increased the gasoline tax by 12 cents, or 75 percent from the base 16 cents, over six years. It also increased various other taxes and fees, including raising the cap on the automotive sales tax to $500 from $300, and hiking vehicle registration fees by $16.

The Nerve in June reported that Hall acknowledged revenues generated under the law could be used by the legislatively controlled State Transportation Infrastructure Bank (STIB) to help fund earlier-approved interstate projects. That includes $34.3 million from the IMTF for an “interstate upgrade” on I-20 in Lexington County, which DOT listed for the first time this year on its May project list.

In 2017 bond documents reviewed recently by The Nerve, STIB, which over the years funneled several billion dollars for big-ticket projects in a select number of counties, said that “it is anticipated that these (interstate) projects will continue to be funded with revenues available” under the gas-tax-hike law and the related 2016 law (Act 275).

That statement contrasts with the message pushed by lawmakers that the gas tax hike would be used to fix pothole-riddled roads in their constituents’ communities. Under the law, revenues “must be used exclusively for the repairs, maintenance, and improvements to the existing transportation system.”

For the first time this year, DOT included a bridge project on its June IMTF list – about $2.5 million collectively for two stretches on I-95 in Jasper County, though no specifics were given on the type of work to be done.

The DOT Commission in February approved adding $15 million annually to a separate $1.5 billion bridge-replacement program, but not until 2024 after a tax credit created under the gas-tax-hike law expires, freeing those funds for bridges, agency officials recently told The Nerve. DOT, which has identified 465 bridges to be replaced out of 750 “structurally deficient” bridges statewide, said the new bridges will be paid for primarily with federal funds.

Of the $312.6 million collected in the IMTF from July 1, 2017, through June 30 of this year, about $68 million came from the gas tax hike, while $222.4 million was generated from vehicle sales taxes under both the old and new caps, according to DOT and comptroller general records, which contradicted each other earlier this year, as The Nerve reported. Another $17.7 million came from registration fee increases.

Besides the total $6.9 million spent on project “commitments,” another $17 million was dispersed from the IMTF through the County Transportation Committee (CTC) “Donor Bonus” Program, which allows counties to receive rebates of a portion of gas tax collections above revenues allocated to them, based on a formula.

The Nerve in March revealed that the program was established under previous state law, and that the allocations to counties were based on an amended formula using 2015 gas tax collections in counties – not on the revenue increases that took effect on July 1, 2017.

Meanwhile, as of July 1 of this year, motorists began paying another 2-cent annual increase in the gas tax, though many are still driving on broken roads in their home communities.

Brundrett is the news editor of The Nerve. Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

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