Start with a gas tax hike
By making highway improvements a budget priority next year, Gov. Nikki Haley recognizes a crying statewide need and the compelling reasons to deal with it. An inadequate road system has implications for safety, mobility and economic development — none of them good.
But the governor’s funding solution falls far short of the mark. Gov. Haley would designate $77 million in new general fund revenue for road priorities next year.
A gas tax increase, she says, is not an option.
It ought to be, and a recent report to the state highway commission clearly shows why.
Of gas tax revenue collected by the state, as much as 40 percent is paid by out-of-state motorists. That’s one of the benefits of a tourist economy, and the out-of-state contribution is only fair. Those motorists use our highways, and the gas tax functions as a user fee to help defray construction and maintenance costs.
Unfortunately, the gas tax has long been inadequate to the task. At 16 cents per gallon, it hasn’t been increased since 1987 and is the fourth lowest in the nation.
Meanwhile, South Carolina has one of the largest state-maintained road systems in the U.S. The gas tax is its main funding source.
The result of having too many road responsibilities and too little revenue is a $30 billion shortfall in road needs over the next 20 years, according to the S.C. Transportation Infrastructure Task Force. The TITF issued a chilling analysis of the state’s transportation problems to the highway commission this month.
While $77 million recommended by Gov. Haley would be an investment in the right direction, it won’t make much of a dent in the staggering overdue road needs that face the state.
And there will be strong competition for any revenue increases in next year’s budget. For example, a coalition of education interests wants to use surplus revenue to begin addressing statewide funding imbalances in public schools across the state.
In its analysis, the TITF concludes that no reasonable increase in the gas tax would be sufficient to deal with needed road improvements. It recommends a range of increased funding, including general fund revenues.
Failing to expedite more road funding will have serious results.
“Those consequences include deterioration of roads and bridges, reduced highway safety, posting or closing of bridges, increased traffic congestion, increased vehicle upkeep and a loss of economic competitiveness,” the task force concluded. “The time for action is now, before the decline of the highway system becomes irreversible.”
The long-term problem is compounded by population growth in South Carolina and by the rising gap between road revenue and inflation.
But legislators have long been reluctant to take the necessary action, in large part because of their general antipathy to anything resembling a tax increase. As the TITF stated: “In the past, the anti-tax argument was that the user fee represented too large a part of the overall price [of a gallon of gasoline]. Today, the anti-tax argument is that the price of fuel is already too high, and therefore no taxes should be added which would drive the price even higher.”
Under that defining scenario, there will never be a good time to raise revenue for the state highway system.
And the consequences of that?
“Based on SCDOT’s current financial ability, the resurfacing cycle currently stands at about 32 years for interstates, 36 years for primary routes and 119 years for secondary routes.”
That will guarantee not only an inadequate road system, but one that eventually will be largely beyond repair.
As the task force noted, the time for action is now.
Gov. Haley is moving in the right direction, but the state Legislature will need to do more to make serious inroads on the funding shortfall by providing dedicated sources of revenue for the state’s highway system.