BY IAN JEFFERIES
The economic growth of South Carolina in recent years is well-established at this point — and it doesn’t rest solely on northerners moving to live on the warm coast. From the relocation of major companies like Boeing in the east to the resurgence of manufacturing Upstate, South Carolina has bucked many national trends to create well-paying American jobs and spur economic growth, even when other states saw shuttered facilities and job loss.
While not always discussed, at the core of this is phenomenon is an integrated and high-performing logistics and transportation sector. Whether moving goods off barges at the Charleston port to consumer-facing stores, or taking BMW cars built in Spartanburg to domestic or international markets, these businesses require the performance of multiple transportation modes.
While just a part of the larger picture, the privately owned freight rail industry — which has spent $26 billion annually in recent years to maintain and modernize its 140,000-mile network — undeniably helps South Carolina’s performance. To turn growth into sustained powerhouse status, policymakers in Washington D.C. should advance public policies that aid both public and private infrastructure.
This of course starts with Sen. Lindsey Graham’s long documented quest to expand the Charleston port. But it also includes a host of macroeconomic policy items long bandied about in D.C.
First, leaders should rehabilitate publicly used roads and bridges, recently graded a “D” and a “C+”, respectively, by the American Society of Civil Engineers. Policymakers can start by advancing measures that make the federal Highway Trust Fund (HTF) solvent and ensure users of infrastructure — including commercial ones — pay for their use.
Since 2008, Congress has transferred $143 billion from the general fund, financed by taxpayers, to a HTF largely supported by a gas tax that simply doesn’t cover costs. While not a panacea, lawmakers should consider measures such as a weight distance fee that can differentiate the use of roads and bridges between average drivers and commercial users that inflict far more damage.
In doing so, they can put to rest misguided efforts by select truck shippers to raise federal truck weight limits from 80,000 pounds to 91,000 pounds — a 14 percent increase. Any federal program that boosts truck weight limits — including a pilot program in select states — further subsidizes commercial highway users at the expense of taxpayers, exacerbates deterioration of crumbling infrastructure and disadvantages a critical freight rail industry.
More than 40 percent of urban interstates are congested and traffic delays and lost productivity cost the American economy $160 billion in wasted time and fuel each year. More than half the bridges on the National Highway System are more than 40 years old and nearly 25 percent are either structurally deficient or functionally obsolete, according to the federal government. Heavier trucks means more trucks, which intensifies these troubling trends.
More broadly, policymakers can emphasize the many benefits of moving freight on private railroads — including reduced traffic congestion and carbon emissions (a single freight train can take roughly 270 trucks off the road) — and advance policies that position freight rail to continue maximizing investment and efficiency.
Most immediately, this entails a simpler and fairer tax code, reducing the business rate to a globally-competitive level to broaden the tax base, enhance U.S. economic development and promote growth. Divisive items related to tax reform must not impede the larger goal to enhance competition, which for railroads and American industry in general, will lead to more domestic spending.
It also includes a unique opportunity to streamline select government processes to generate policies that focus more on desired outcomes than prescriptive steps. Not by eradicating regulation, but by instilling good government principles — transparency, complete and sound science and expanded pilot programs for testing — railroads would gain efficiencies that help grow traffic, which leads to more revenues and more investments to innovate and lessen the burden on public infrastructure.
And last, boosting economic performance in South Carolina and the transportation sector requires leaders to maintain free trade agreements that have brought prosperity to American workers, including the manufacturing, automobile, agriculture and shipping industries in the Palmetto State. While we must ensure current and future agreements are fair and put American workers first, we must not forget that trade supports 40 million jobs — including 50,000 domestic rail jobs — and helps small and large businesses reach global markets and drives greater consumer choice.
Simply put, South Carolina’s economic resurgence would not be possible without fair and open trade.
Commerce requires solid transportation. We should all root for infrastructure.
Ian Jefferies is senior vice president for government affairs at the Association of American Railroads.