Will New Gas Tax Revenue Go to Roads?


On July 1, the gas tax hike went into effect. Drivers across the state are now paying more for gas, higher sales tax on vehicles, and increased registration fees.

However, there is a risk that this new revenue could be diverted to pay down existing bond debt for new road construction instead of being used to repair existing roads. The revenue from the increased taxes and fees goes to the newly created Infrastructure Maintenance Trust Fund (IMTF), but the bill includes a provision allowing trust fund dollars to be transferred to the debt service fund – in turn allowing the State Transportation Infrastructure Bank (STIB) to issue more bonds to finance new highway projects.

Any transfers of this sort would require a vote of the Department of Transportation Commission, which will be meeting July 20. While these meetings are always live-streamed and recorded, it can be a challenge to follow and understand them.

For this reason, state officials should post the IMTF account online so taxpayers can see where every dollar goes. Any of the following entities could do this:

The Comptroller General is the state’s bookkeeper and his office oversees the statewide accounting system. He keeps track of every dollar spent by state agencies, and receives a daily report from the state treasurer. The comptroller general maintains an online database of government spending that is available to the public, although he is not required by law to do so. The comptroller’s office is in the process of creating a new fund in the accounting system for all the new revenue generated by the gas tax, through which all transfers and payments will be tracked.

The DOT Commission is responsible for ensuring that infrastructure maintenance trust fund revenue is properly spent on road repair.

The Department of Transportation – The DOT website already has a spending transparency page with links to agency expenditure reports, and it could be expanded to include all the spending from the infrastructure maintenance trust fund.

The State Treasurer is the official custodian of state funds, and deposits all of the DOT’s revenue into one of three funds: the state highway fund, the non-federal aid highway fund, and the new infrastructure maintenance trust fund. When contractors need to be paid, it’s the state treasury that cuts the check.

SC Gas Tax Spending

How the gas tax increase is tracked and spent

The comptroller general, DOT Commission, Department of Transportation, and treasurer all have the resources to make this public. The comptroller general already does the heavy lifting and provides department spending reports online, so it would be a small step to make the balance and activity of the infrastructure maintenance trust fund available in real time as well.

The only reason there was any support at all for the gas tax hike is because taxpayers want their roads properly maintained. The bill states that trust fund revenue must go to “repairs, maintenance, and improvements to the existing transportation system.” If this is truly the intent, state officials should have no problem showing how this money is spent in an accessible, user-friendly format.

Providing transparency on money raised from the gas tax is the only way to ensure that the promises of the bill are fulfilled.

Print Friendly, PDF & Email