Various task forces and study committees have detailed the seriousness of the lack of road and bridge maintenance and the need for additional road infrastructure in South Carolina. By now, most of us who drive the roads are aware of the potholes and restricted load bridges that exist.
The problem is compounded by increasing costs, stable revenues and a general unwillingness to address the real issue — more money. We must find a sustainable, recurring revenue source to fix and maintain our roads and bridges.
Various alternatives have been proposed to fund the shortage of money. Gov. Nikki Haley has proposed transferring much of the projected 2013-2014 revenue increase to the S.C. Department of Transportation. A House bill proposes transferring the sales tax on automobiles to DOT. Another idea floated in the Senate is to designate a percentage of general revenue funds to DOT. Another proposal in the Senate is to float a bond issue, with interest apparently paid for with general tax revenues.
All of these proposals have merit, some more than others. Road and bridge construction and maintenance are uniquely suited to the “user pays” concept whereby the user of the government service pays for its use.
Of the suggestions mentioned above the transfer of the sales tax on vehicles comes closest to a “user pays” concept.
But this approach, as are the others, is flawed in at least two respects. First, each proposal takes money from the general budget that could and perhaps should be used for other essential government services. The sales tax on cars, for example, provides about $20 million per year for K-12 education. Do we really want to finance DOT on the backs of our children’s education?
The second flaw is even more critical. Thirty to 40 percent of our fuel sales are to out-of-state tourists and truckers who use our roads and only pay the current user fee per gallon if they purchase gas in South Carolina. All of the proposals discussed above ignore the basic premise of “user pays’ and impose all of the costs of road construction and maintenance on South Carolina residents only, allowing those who drive through our state a free pass.
There are only two ways to collect a user fee from everyone who uses our roads — tolls or an increase in the motor vehicle user fee. Because of the seriousness of our maintenance deficit, I have introduced a bill to increase the user fee for the use of our roads to provide more money for maintenance.
Candidly, it would require an increase of about 20 cents per gallon to generate the funds necessary for the next 10-20 years. But my proposal is more modest — an increase of 10 cents per gallon, increasing the user fee to 26.75 cents from 16.75 cents per gallon.
The 10-cent increase would generate about $335 million in revenue annually. But to make the increase more politically palatable and revenue neutral in aggregate, the bill proposes a rebate to owners of vehicles in South Carolina of $53 per year on their income-tax returns. This is based on the assumption that the typical average vehicle consumes 530 gallons of fuel per year.
This rebate will cost about $211 million, leaving about $124 million for DOT. The $124 million will be paid by out-of-state tourists and truckers; not by South Carolina residents. Without the rebate the 10-cent increase in the user fee would cost the typical vehicle owner about one dollar per week. The rebate does sunset in two and a half years, at that time providing the $335 million needed for maintenance.
The bill indexes the user fee to the wholesale price of fuel, adjusted twice a year either up or down as in neighboring states. It also increases the C-Fund allocation to counties from 2.66 cents to 3.5 cents providing more money for local maintenance. The user-fee approach avoids the two flaws addressed earlier. It does not take money from the general budget and it requires all who use the roads to provide the money needed for construction and maintenance.
The “robbing Peter to pay Paul” method of funding doesn’t work. The method is a shell game to make it appear that we can cover all essential services with existing revenue while hoping that another source of money pops up. Most everyone knows that the proposals being made will not provide either the $6 billion suggested by the task force or the $29 billion that the DOT says is needed.
Sooner or later we are going to have to face up to the fact that we can’t take these amounts out of the general budget and sustain the other programs the state must provide. The public knows this all too well and can’t be fooled. South Carolinians can handle the truth: Our roads and bridges are crumbling and we need money to fix them.
As any homeowner knows, the longer you put off the minor repairs the more expensive the problem becomes. Let’s act now to make our roads and bridges safe again before it is too late. The lack of road and bridge maintenance is an economic tsunami primed to occur.
Hopefully, we will not have to wait until a bridge collapses, resulting in multiple deaths, before we find enough courage, political will and leadership to resolve this issue.
B.R. Skelton, a Republican, represents District 3 (Pickens County) in the S.C. House of Representatives.