SC Senate approves $12.4B spending plan with no money for I-73
For years, South Carolina lawmakers have been itching to deliver on a major highway project that would finally connect a local Horry County highway to Interstate 95, giving Myrtle Beach its first-ever interstate access.
But on Wednesday that $300 million ask for Interstate 73 slowed the South Carolina Senate’s budget debate. Ultimately no money was allocated for the project by senators before giving preliminary approval on the $12.4 billion spending plan.
A formal roll call vote on the spending plan ended Thursday with no money for I-73.
That means supporters of the highway project are out of luck to win funding from the state legislature this year.
Senators representing Horry County wanted to use money planned for a tax rebate to pay for construction of I-73 along with other road projects around the state. The budget, which is built around a $1 billion tax rebate, leaves lawmakers fighting over less money for local projects, especially when it comes to this big-ticket request.
However proposed amendments to pay for I-73 construction have not been successful, even though senators pushing the highway say it would benefit the entire state.
I-73 — an interstate that would connect S.C. 22 near Conway to I-95 near Latta — has been in the works for 40 years. Originally planned as an economic booster for depressed towns and cities from Michigan to Myrtle Beach, Horry County leaders latched onto the plan in recent decades as both a way to diversify the Grand Strand’s tourism-based economy and an evacuation route in the event of hurricanes.
Boosters argue that building I-73 will bring thousands of jobs and new corporations to its corridor and allow Dillon County to fully utilize its inland port, a highway-based shipping and logistics hub.
But the project can’t happen without significant state dollars. Supporters also hope that state funding will lure additional dollars from the federal government.
In March, state senators unanimously approved a $1 billion tax rebate about three weeks after it was introduced. It promised to send between $100 to $700 back to every income tax filer depending how much they paid income taxes. The rebate was paired with a $1 billion tax cut.
The tax cut and rebate was pushed by state Sen. Harvey Peeler, R-Cherokee, who is in the first year as Finance Committee chairman and led the writing of a $12.4 billion spending plan.
The House has passed its own tax cut, which reduces income tax revenue by $600 million next fiscal year. The tax cut would eventually increase to $1 billion in subsequent years based on how well the economy performs. The House plan does not include a rebate.
The rebate ultimately left less money for earmarks and other member initiatives, like I-73.
State Sen. Greg Hembree, R-Horry, said Wednesday the rebate vote was a misstep.
“I felt at the time, this was a mistake,” Hembree said. “I knew better.”
In a 25-minute speech, Hembree explained that he voted for the rebate because he wanted to preserve his friendship with Peeler and didn’t want to anger him by voting against the rebate only to turn around and ask for state dollars to support the construction of I-73.
Hembree said the most recent rebate in 2019 where each tax filer received a $50 rebate was mocked when it was sent out.
“You know what came at the end of the day, we got made fun of. That’s what happened,” Hembree said.
Hembree said the money for the $1 billion rebate could be better used on pension reform, fixing infrastructure around the state and addressing issues created by Act 388. The 2006 law keeps owner occupied homes from paying for public school operating expenses in exchange for raising the state sales tax by 1 cent to reimburse school districts. But it has led to higher property taxes on commercial properties.
Peeler, who pushed for the tax rebate said building I-73 would take money away from existing highways in the state.
“First of all, my constituents in District 14, they heard you’re going to shift the attention from Interstate 85 that desperately needs attention, continues to need attention, (and) going to shift that to the brand new I-73,” Peeler said.
He added addressing Act 388 could affect how much people pay in property taxes.
Gov. Henry McMaster last year pledged $300 million to kickstart I-73’s construction and has thrown his support behind the project. That money, if allocated, would build the first interchange and six miles of I-73 off of I-95.
Hembree, along with Sen. Luke Rankin, R-Horry, and Sen. Stephen Goldfinch, R-Georgetown, took turns introducing various amendments to fund I-73 on Wednesday, arguing the road would boost the state’s “golden goose” tourism industry, bring new jobs and provide an evacuation route during major storms.
U.S. 501, the primary artery in and out of Myrtle Beach, nearly became impassable in 2018 due to flooding from Hurricane Florence.
During debate on Wednesday, amendments to secure money for I-73 included using the rebate money included using some of the money to pay for a $1,500 bonus for each state employee and using money to repair and upgrade schools in poor school districts.
Prior to Wednesday’s effort to secure I-73 funding, Hembree said doing so would be an uphill battle.
“A big ask like that, that’s exceptionally difficult (but) we’re at the place where we’re throwing Hail Marys and we’ll throw them as hard as we can,” he said last week.
I-73 not a priority for SC, some say
Despite the concerted effort by Horry County’s senators to include money for I-73 in the budget, some leaders argued that the project wasn’t a priority for the state given other road needs.
“The wish list up there is long and it’s just not enough money to fund all the interstate projects they have,” Horry County Council member Harold Worley, who served in the legislature in the 1990s, said. “They’re really reluctant to put that money toward a new interstate when they have potholes in the existing interstates so its a priority issue there.”
That was a sentiment echoed by state Sen. John Scott, D-Richland, who noted that “a whole lot of projects” missed out on funding in 2022.
But Worley speculated that if the legislature doesn’t step up with I-73 funding this year, local dollars could be at risk, too. Horry County, Myrtle Beach and North Myrtle Beach have all pledged local hospitality tax dollars to I-73 if state and federal money becomes available. Worley said county council members may revoke their pledge if the legislature doesn’t act.
Some legislators on Wednesday supported several of the I-73 funding amendments because they would have included funding for road projects in their districts, too. But those plans, despite their broader appeal, didn’t pan out.
Other I-73 supporters, though, said they remained hopeful.
“My thoughts are that the governor pledged he would push for $300 million for I-73. Christy Hall, secretary of transportation, said that she would push for $300 million for I-73 and I take them at their word,” U.S. Rep. Tom Rice, R-Myrtle Beach, said about the legislature’s debate over I-73 last week.
Myrtle Beach Area Chamber of Commerce CEO Karen Riordan endorsed the efforts of Horry County’s senators to fund I-73.
“The budget process is complex, fluid and far from complete,” she said. “We are immensely grateful for their determination and resolve.”
This story was originally published April 27, 2022 at 4:57 PM.
