FAST FACTS: A Tax Hike for Roads?

There has been endless talk about “road plans,” but in truth there is no plan to fix roads – the only debate in Columbia is over raising taxes. The promises of income tax cuts are empty. What’s worse, all the new money will go into the same system run by the same legislative leaders who have ignored our crumbling roads for decades. Here’s what you need to know about the ongoing debate. [Pdf here]

(1) There is no credible analysis of what road repairs will cost.

  • Politicians claim DOT has a $43 billion shortfall over 25 years. That is not only an unrealistic, unprovable projection. The source is a report by a company that’s made millions from DOT.
  • Unnecessary road expansions and mass transit projects account for more than half the supposed $43 billion shortfall in road funding over the next 25 years.

(2) Lawmakers have decreased the state’s road maintenance fund by 25 percent over the last four years!

  • Of the DOT’s current $1.6 billion budget, less than $300 million is eligible to maintain and repair any state road.

(3) Instead of repairing and maintaining roads, lawmakers and the governor have funneled hundreds of millions of dollars to the unaccountable State Transportation Infrastructure Bank, or STIB, for needless expansions in politically influential counties. The agency should be eliminated, but lawmakers and the governor are massively increasing its budget.

  • The STIB uses bond debt for expansions, and does not fund maintenance or repair.
  • Since 2013, the legislature and the governor have increased the STIB’s budget by 200 percent (from $50 million to $155 million). The proposed Senate Finance budget would increase it by 400 percent over the 2013 budget to $255 million.
  • According to the most recently available data, the STIB has spent more than $4 billion in only 10 of 46 counties.
  • Today STIB spends more on debt service than it spends on new projects.

(4) South Carolina’s addiction to federal money forces state officials to prioritize needless expansions over maintaining our existing road system.

  • DOT received $422 million in last year’s budget from gas tax revenue. But more than $100 million of that money was used to match federally eligible projects – which cannot include any maintenance..
  • 50 percent of secondary roads that are not eligible for federal dollars are rated in “poor” condition, compared to only 10 percent of interstate miles that are eligible for federal aid.

(5) The state’s road funding system is almost totally controlled by lawmakers – who are only accountable to their districts, not to the entire state.

  • The governor has only marginal influence over the DOT Commission. Real control over the Commission is exercised by legislative leaders who control the body that screens potential DOT commissioners before they’re approved by legislative delegations.
  • Two legislative leaders – the House Speaker and Senate President Pro Tempore – control the majority of appointments to the STIB Board and the majority of appointments to the Joint Transportation Review Committee.

(6) There is no proposal to actually cut taxes – the so-called “swaps” raise taxes immediately while spreading small tax cuts over anywhere from 5 to 10 years. No politician can promise to deliver tax relief beyond the current year.

  • The governor’s tax cut proposal would cut income taxes by a mere 2 percent over 10 years – an insignificant decrease that could easily be revoked.
  • The House proposal would cut an average South Carolina family’s income tax burden by $48 over the course of two years.
  • The latest Senate proposal would cut income taxes by a mere 1 percent over 5 years.
  • The gas tax, by contrast, would take effect almost immediately and would be felt by everyone who drives a car in South Carolina.
  • Tax swaps always result in higher taxes for someone, and there is no reason to “swap” except to hide tax hikes and spare politicians political pain from making tough decisions.
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