Road Maintenance Bill Heads to Governor

WHAT DOES IT DO? AND IS THIS A SOLUTION?

[UPDATE: Gov. Haley signed H.3360 on Monday, June 24]

The legislature has finalized the conference version of the last transportation bill left standing this session (H.3360). Big surprise: the bill has everything to do with new spending and acquiring new debt, and nothing to do with underlying structural reforms.

Rather than focusing on maintenance, the two central provisions in this bill provide mechanisms by which the state can expand the state highway system – already the fourth largest in the nation. The first of the two central provisions would require that the Department of Transportation (DOT) transfer $50 million in non-tax revenue on an annual basis to the wasteful and unaccountable State Transportation Infrastructure Bank (STIB). This $50 million transfer to the STIB is intended to be bonded for up to $500 million in new debt to be spent on roads and bridges. While the stated purpose of this transfer and bonding is for maintenance, the STIB has historically been concerned with expansion rather than maintenance, and the conference bill provides no guarantee that these new funds won’t simply be used for expansion.

The bill expressly allows these new funds to be used for “expansion and improvements to existing mainline interstates.” While DOT is required to submit a list of projects to STIB that need funding, the STIB is not required to follow these recommendations. In short: this provision, rather than guaranteeing needed repairs, may be providing funds simply to expand our already enormous and enormously expensive highway system.

The other of the two central provisions starts well by allowing for the sensible and needed reform of transferring state roads to the control of municipalities, but at the same time takes the unfortunate course of allowing the reverse as well. Under this provision the state could (if a locality won’t agree to a transfer) assume control through condemnation of any locally maintained road the state deems “necessary for the interconnectivity of the state highway system.” The last thing the DOT needs is to acquire more miles of road to maintain when it can’t maintain the roads it has, yet both of the central provisions of this bill are geared toward achieving that end.

Another notable provision of the bill requires that 50 percent of the revenues derived from the sales, use, and excise taxes on motor vehicle must be credited to the State Non-Federal Aid Highway Fund and requires these funds be used exclusively for highway and bridge repair, construction, and maintenance. This provision is seemingly lifted from H.3412 (we have analyzed in detail previously). The problem with dedicating these revenues to the highway fund is that they’re already dedicated to the General Fund and the Education Improvement Act Fund. The legislature is unlikely to simply allow these reductions in funds to a source that provides school funding. What’s far more likely to happen is that the state will either accrue new debt or raise taxes and fees to offset the losses.

Finally, the bill will transfer another $50 million in the current fiscal year from unobligated General Funds to the DOT to be used as matching funds for federal bridge replacement projects.

There are in fact reforms by which our infrastructure needs could be met, and they don’t involve new spending or new taxes. This bill would involve both. It now goes to the governor for either approval or veto.

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