SC DOT could lose $293M over the next two years. Here’s what that means for road work
State roads officials said Thursday that South Carolina is projected to miss out on $293 million in gas and car sale tax revenue over the next two years because motorists traveled less in the past few months amid the restrictions put in place to slow COVID-19’s spread.
In the short-term, that estimated loss shouldn’t hurt construction projects already underway or projects set to be awarded to contractors this month through July as planned, said Justin Powell, deputy secretary with the S.C. Department of Transportation.
But what that loss means for the state’s 10-year road construction plan remains to be seen, Powell told DOT commissioners Thursday.
“What we’re going to do is continue to pace, monitor our revenues, look at them as they’re coming in and pace project construction as we go along based on the cash we have on hand rather than the cash we’re projected to have.” Powell said. “What I think we’re going to be doing, as we get out of the summer, we’ll see what the wreckage is on this whole economic contraction. And I think then we can really make some good decisions, based on a lot of available data.”
Officials logged a drop in traffic starting in March after Gov. Henry McMaster closed South Carolina schools.
In April, DOT reported a 45% drop in traffic as more restrictions were put in place by the governor to slow the spread of the coronavirus, including a home or work order.
State transportation Secretary Christy Hall told commissioners Thursday the reduction in traffic helped projects already underway.
“We had several (contractors), many on the interstate, take advantage of those opportunities to work a little more efficiently with the lower amount of traffic on the road,“ Hall said.
With more restrictions now lifted by McMaster, officials said traffic has ticked back up, especially in the coastal areas.
A similar surge is expected this Memorial Day weekend.
Speaking to commissioners Thursday, Powell compared the drop in gas and car tax revenue, and its potential rebound, to the Nike Swoosh: a big drop followed by a slow recovery. In 2017, lawmakers raised the state’s 16.75-cent-a-gallon gas tax by two cents a year for six years, a total of 12 cents, to help pay for road projects. Lawmakers also accompanied that tax by raising other driving fees.
How long the contraction in the economy will last is unknown, Powell said.
But, he added, “there will be no interruption for contracts on the street right now.”
