How the DOT Commission Plans to Spend New Gas Tax Revenue
Last week the Department of Transportation (DOT) Commission and the State Transportation Infrastructure Bank (STIB) met for the first time since the gas tax bill passed. Both meetings were focused on adjusting to new laws and planning for the way ahead. More to the point, they confirmed that there is a very real possibility that the new revenue from the gas tax bill will be diverted to pay for STIB bonds.
The DOT’s plan for road repair and construction is troubling on two counts. First, only half of the DOT’s projected available funding will be spent on actual resurfacing. This is in spite of Secretary Hall’s statement that eighty percent of South Carolina roads are in need of resurfacing with an estimated price tag of $11 billion. $400 million will go toward resurfacing, $67 million to bridge replacement, $50 million for a rural road safety program involving new signage, guardrails, line painting, etc. and $161 million for interstate widening.
Second, Secretary Hall raised the question of how much is needed to commit to debt funding or bonds. She went on to give the infamous “malfunction junction” interchange of I-20 and I-26 as an example of a project that ostensibly cannot be completed with a pay-as-you-go approach and would need to be funded through the STIB. Of course, she did not mention the third option – saving up for major projects and thereby avoiding the additional cost of interest. Besides, the new revenue was supposed to prioritize resurfacing, not a continuation of the expansion-based DOT agenda.
DOT Commissioner Robby Robbins refuted what he interpreted as claims from “friends in the blogosphere” that the DOT is in “cahoots” with STIB to spend the new funding on pet projects and that there will be a reshuffling of priorities. This language was echoed in the STIB meeting that same day, referring to “conspiracy theories” floating around. Commissioner Robbins stated the money will be spent on the DOT’s existing and upcoming project list, including the interstate widenings. This confirms what we predicted all along—the new gas tax funding will not solely be used for resurfacing. Some of it will almost certainly go toward debt service for existing or future road construction projects financed by bonds.
Secretary Hall also reiterated the DOT’s goal of increasing the number of DOT contractors in an attempt to increase competition of those who can bid on road or bridge work. This is simply a government attempt to rebuild the roads industry. While rebuilding private industries is never the role of government, it is doubly concerning when the most powerful lawmaker in the state, a DOT commissioner and many of the lobbyists who pushed for the tax hike have deep ties to the industry in question.
Finally, the commission is now required to give a twenty-four hour notice even for emergency meetings. Commissioner Robbins questioned this transparency measure, citing possible cases of emergency in which the commission would not have time to notify citizens. Secretary Hall pointed out that she has the power to act as necessary in emergency situations, and that there is a process for the governor to declare a state of emergency as well. This measure is simply a transparency goal ensuring that taxpayers have adequate notice of all meetings. However, Commissioner Robbins stated that he did not understand this logic. When he asked what the consequences would be if a meeting was called without the required notice, other members of the Commission joked that they hoped jail time would not be on the table. Chairman Woody Willard then stated, “I guess that’s part of this position, to take a bullet for the team.”
The biggest takeaway from these meetings was that the DOT’s funding is in fact being openly discussed by the DOT Commission for paying off bond debt or financing future long-term projects, in partnership with the STIB. Taxpayers may soon see their tax dollars diverted to new construction, while many roads continue to await resurfacing.