Why is SC’s gas tax revenue being spent like this?
Lawmakers, particularly legislative delegations, have a bad habit of diverting critical infrastructure funding to serve their own interests.
Paying local transportation officials using gas tax revenue
In South Carolina, county transportation committees (CTCs) are responsible for developing local transportation plans and allocating a portion of gas tax funds to fix city and county roads, or for other projects like bridge repair and the maintenance of traffic and street signs. In nearly all counties, CTC members are appointed by legislative delegations (the group of lawmakers representing that particular county).
While state law allows a portion of gas tax funds to be used for administrative expenses (which are technically required to be no more than $2000) legislative delegations in several counties have gone a step further and opted to pay CTC members simply for attending meetings. Funds for these payments are diverted from each county’s share of road repair funds.
During the 2019-20 fiscal year, at least nine CTCs received per diem payments. with the Horry County CTC receiving the highest total payment of $13,900 during the year. Complicating this matter is that a number of CTCs receiving per diem funds have handed off the responsibility of administering their county’s local road funds to the State Department of Transportation, raising questions about why members are being paid at all.
Another issue is that, according to state law, nothing prevents delegations from making project recommendations to the transportation committees. This, coupled with the fact most CTC members owe their jobs to legislative delegations, poses serious conflict of interest and fairness concerns, and suggests that delegations have far greater influence over road projects than your average citizen.
Based on legislation filed earlier this year, it appears that delegations want to increase the number of CTCs who are getting paid. Two bills (S.477 & H.3277) would pay members of the Lee County CTC and Union County CTC simply for attending meetings. S.477 would also add the legislative delegation chairman as a non-voting member of the CTC.
While neither bill passed this year, both still could become law in 2022 as South Carolina operates on a two-year legislative session.
Water recreation pet projects
Under state law, a portion of the gas tax goes to a “water recreational resources” fund, administered by the Department of Natural Resources (DNR), which can be for a range of infrastructure projects including boat ramps, docks, etc. DNR may also spend part of the fund on law enforcement, aquatic weed control, and advertising.
While DNR technically administers the program, the law states that legislative delegations can make project recommendations and that they must be given “primary consideration over any other projects” (S.C. Code Section 12-29-2730(C)). In other words, when it comes to improving state waterways, lawmakers get first pick.
If the objective of this section weren’t clear enough, legislative delegations once had the authority to approve or reject any expenditure from the fund, however that law was struck down by the S.C. Supreme Court citing a separation of powers violation. Instead of actually returning authority of the fund to DNR, lawmakers rewrote the law and found a creative way to let delegations continue exerting their influence.
Diverting local road funding for honorary signs
Every time the legislature passes an honorary resolution to rename a state road or bridge – which is done regularly to honor former lawmakers and other public officials – the manufacturing and overhead costs are paid for using local road repair funds. Before those funds are paid out, however, the reimbursement must be approved by the legislative delegation of the county in which the road/bridge sign will be located.
The Nerve reported in 2011 that over the previous five years, at least $60,000 went to road-naming signs, and at least 13 roadways or structures were named after current or former lawmakers. A follow-up story in 2014 reported that 57 road-naming resolutions had been adopted during the 2012 and 2013 legislative sessions, totaling $28,500 of local gas tax dollars diverted to road signs based on the statutory reimbursement amount. Between 2017 and 2019, lawmakers approved another 57 resolutions, which would have resulted in another $28,500 total reimbursement for the DOT from local gas tax funds.
Aside from what is an obvious drain on public resources, this practice is often used by lawmakers to reward fellow politicians and public figures, which has caused the tremendous embarrassment for the state on more than one occasion.
Consider the case of former DOT Commissioner John Hardee, who had his road sign along Columbia’s airport removed after pleading guilty to federal evidence tampering charges and a subsequent arrest in a 2019 prostitution sting. On another occasion, former Sen. John Courson – after whom an I-126 interchange was named – pleaded guilty to corruption charges. Following his plea, the senator requested the signs be removed.
Ending this practice would not only limit the ways lawmakers can grant political favors, it would ensure that local road funds are spent as they were intended.
The diversion of gas tax revenue for various non-essential purposes is not only a misuse of public funds, it is a violation of the agreement between taxpayers and their representatives that such funds would be used to their fullest to fix South Carolina’s crumbling roads.
While the various laws enabling this behavior should be addressed, one obvious step towards increased accountability is to return control of local transportation decisions to local governments, a step some legislative delegations have already taken.
Read our latest report looking at who controls local transportation decisions across South Carolina’s 46 counties, and what can be done to improve the system.