The Buzz

$144 million Florence road example of cronyism, critics say

The traffic on Pamplico Highway was so light on a Tuesday in August that two conservation activists could lie down in the middle of the two-lane highway during rush hour for about a minute before a vehicle appeared.

But the S.C. Transportation Infrastructure Bank wants to widen 24 miles of the highway to five lanes.

The busiest stretch of the highway carried 9,000 vehicles a day, on average, in 2014. In contrast, the busiest stretch of Richland County’s three-lane Hardscrabble Road carried more than twice that number of vehicles — 23,900 a day.

“It’s safe to take a nap in the middle of the road,” activist Dana Beach said of Pamplico Highway. The Florence County road does not have enough traffic to justify spending the estimated $144.4 million in state and local money that it will cost to widen it, he added.

So why widen it?

Politics, say critics of the state Infrastructure Bank, including Beach, who is head of the S.C. Coastal Conservation League, often critical of development.

Critics long have complained the Infrastructure Bank’s state-financed, road-building efforts are driven by State House clout, not the state’s road needs.

The recent flooding that devastated roads and bridges across South Carolina only increases the need to reform or abolish the Infrastructure Bank bank, making maintenance a priority over the bank’s construction of new roads, says state Sen. Tom Davis, R-Beaufort.

But Infrastructure Bank supporters say the money slated for widening the Pamplico Highway will be well spent.

“The (Infrastructure Bank) has really been good for improving the roads, (and) increasing the capacity of the highways in South Carolina,” said Senate President Pro Tempore Hugh Leatherman, R-Florence.

‘Failure of the system’

The part of Pamplico Highway that is set to be widened looks like most rural two-lane roads in South Carolina.

At least 13 churches line the highway. Farms, houses and cow pastures spread out along the road, its pavement graying with cracks zig-zagging through it. Hannah-Pamplico Elementary/Middle School and Hannah-Pamplico High School — combined enrollment, 1,132 — sit along the road.

Today, like many S.C. highways, part of Pamplico Highway is closed due to a washout from the flooding that hit the state three weeks ago. That washout is not expected to be repaired until after Thanksgiving.

In the future, however, congestion is expected to worsen on the portion of the Pamplico Highway that is closest to the City of Florence. Traffic on that six-mile stretch of highway, also called S.C. 51, has a stable flow now, the state Transportation Department says. But traffic is expected to increase to an unstable flow, the department’s second-worst category for congestion, by 2030.

Already, during rush hours, traffic is horrible, said Leatherman, whose district includes the highway. “It’s bumper to bumper.”

Leatherman added the highway also is a major school bus route and used for evacuations during hurricanes, although the road is not listed as an evacuation route by the Transportation Department.

Widening the highway also would help attract “future economic development opportunities” to the area, the Transportation Department said in a study.

Nancy Cave — like Beach, a staffer with the S.C. Conservation League — said that rationale is common in South Carolina: Build roads and businesses then will come to an area. But, too often, “the road sits there and no business comes.”

Beach agrees.

“It’s more of an example of the dysfunction and the failure of the system at a general level to allocate transportation dollars rationally,” Beach said.

State bank footing most of Florence bill

The Pamplico Highway widening project was approved by Florence County voters in 2006, when they OK’d a penny-on-the-dollar local sales tax for six road projects.

The Infrastructure Bank committed to paying up to $340 million for the six projects. Up to $148 million will come from the Florence sales tax, according to an August update from the state Transportation Department.

That means state taxpayers are footing the majority of the bill for roads that benefit only a few motorists in one lightly traveled portion of the state, says Beach.

Since its founding in 1997, the Infrastructure Bank has spent $3.6 billion on roads.

Almost a third of that money — $1.1 billion — has gone to the Charleston and Lowcountry areas, including money to extend Interstate 526, which Beach and the Conservation League strongly oppose.

Critics say Charleston projects benefited because the board that governs the Infrastructure Bank was controlled by the appointees of elected officials from the Holy City — then-Gov. Mark Sanford, then-Senate President Pro Tempore Glenn McConnell and then-House Speaker Bobby Harrell — for much of its history.

In 2005, Florence’s Leatherman was appointed by McConnell to the board that oversees the Infrastructure Bank. That year, the board approved the initial funding for the Florence County road projects.

Beach said Leatherman — today, arguably the state’s most powerful politician as head of the Senate and chairman of the Senate’s budget-writing Finance Committee — uses the Infrastructure Bank “as his own personal slush fund.”

Leatherman says the highways in the Florence County roads package justify state spending because they are state highways.

The Senate leader said Florence County residents also should be lauded for agreeing to tax themselves, via the local-option sales tax, as part of their bid to attract state money from the Infrastructure Bank. The citizens of more counties should do the same, he added.

Should bank be abolished?

The Infrastructure Bank, which issues bonds to pay for roads, was created to help pay for the Ravenel Bridge in Charleston. It is charged with helping local governments pay for projects that cost more than $100 million.

Former state Transportation Department Secretary Buck Limehouse said the Infrastructure Bank was his brainchild. His son, state Rep. Chip Limehouse, R-Charleston, introduced legislation to create the bank.

“We built projects that we never would have had enough money to do and we’re using those projects now as we pay for them,” Buck Limehouse said, adding the bank allows the state to benefit by selling bonds at today’s low interest rates.

However, opponents say the Infrastructure Bank needs to be abolished, removing politics from decisions about roads.

This month’s flooding will increase the public pressure on lawmakers to repair the state’s roads and bridges, said Sen. Davis, who blocked a plan to raise taxes to pay for road repairs earlier this year, saying additional money was not needed because of state surpluses.

“It’s a different thing entirely when you’ve got a fire hose of water turned onto the Midlands and Lowcountry in South Carolina, and you actually see these roads and bridges crumbling,” said Davis.

Davis endorses getting rid of the Infrastructure Bank or making it accountable to the governor, saying the bank’s focus on building new roads — rather than maintenance —is wrongheaded.

The seven-member board that governs the Infrastructure Bank also is controlled by too few politicians, Davis said, noting the speaker of the S.C. House and Senate president pro tempore name four of the bank board’s seven members.

(Leatherman, the Senate president pro tem, appointed himself as one member of the board. He said he did so because he always has had in interest in the state’s highway system.)

State government “should never have that kind of money being allocated and spent with that much control given to two individuals,” said Davis, referring to Leatherman and S.C. House Speaker Jay Lucas, R-Darlington, who appoint a majority of the bank board’s seven members.

The result of that control is that road projects are selected on the basis of political influence, not need, critics say.

The Infrastructure Bank highlights “the manipulation of vast amounts of state dollars by powerful politicians,” Beach said.

But bank board member Joe Taylor of Columbia said that belief is a misconception. The board reacts to applications for roads money, not political clout.

“A lot of people think we go out and pick projects,” said Taylor, a former S.C. Commerce secretary. “We, typically, react to local governments who apply.”

Taylor said politics may have been at play in the past, but he has not seen it since he joined the board in 2013.

Infrastructure Bank opponent Beach isn’t buying that.

Pamplico Highway “is the most glaring example of the abuse in the system and the corruption in the system,” he said.

Reach Cope at (803) 771-8657.

The S.C. Transportation Infrastructure Bank

What is it? The S.C. Transportation Infrastructure Bank is a state entity that issues bonds to borrow money to help finance road projects that cost more than $100 million. The bank was created in 1997 and is governed by a seven-member board.

How much does it spend? The Infrastructure Bank’s budget, approved by the General Assembly, has grown from $80 million in 1998-’99 fiscal year to $225 million in the state’s current fiscal year, which started July 1. The bank says it spent $76 million in 1998-’99 and $123 million in 2014-’15, which ended June 30.

Where does the money come from? Money for the Infrastructure Bank comes from truck registration fees, motor vehicle registration fees, one penny of the state’s 16.75-cent-a-gallon gas tax, $50 million transferred from the Transportation Department and a portion of the electric power tax.

S.C. Transportation Infrastructure Bank Board

The board is made up of seven members who decide how to spend money on state road projects

Gov. Nikki Haley’s appointees

Vincent Graham of Charleston, chairman of the bank board, was appointed last month replacing Don Leonard, who had been on the board since 2003. Graham is president of the I’On Group in Mount Pleasant, a real estate company. Graham graduated from the University of Virginia where he studied economics.

Ernest Duncan of Aiken, a board member since 2004. Duncan first was appointed by former Gov. Mark Sanford. He is a retired colonel in the U.S. Army Reserves and chief executive officer of ELD Sustainment Group, a defense-contracting group. He earned a bachelor’s degree in business from S.C. State University.

S.C. House Speaker Jay Lucas’s appointees

Max Metcalf of Greenville, a board member since 2003, first was appointed by then-House Speaker David Wilkins, R-Greenville. Metcalf is manager of communications for BMW. He received a bachelor’s degree in economics from Clemson University. He also oversaw intergovernmental relations/transportation under late Gov. Carroll Campbell.

Chip Limehouse of Charleston, a board member since 2007 and S.C. House representative, introduced the legislation to create the Infrastructure Bank and first was appointed to its board by then-Speaker Bobby Harrell. Limehouse is a commercial real estate broker and executive with Limehouse Properties.

Senate President Pro Tempore Hugh Leatherman’s appointees

Hugh Leatherman, the Florence Republican and Senate leader, first was appointed to the board by then-Senate leader Glenn McConnell of Charleston in 2005. Leatherman re-appointed himself when he took over leadership of the Senate in 2014, citing his interest in the state’s road needs. He earned his bachelor’s degree in civil engineering from N.C. State University.

Joe Taylor of Columbia first was appointed in 2014. Taylor is the former head of the S.C. Department of Commerce. Now a private investor, Taylor said he brings geographic diversity to the board because he is its only member from the Midlands.

Ex-officio member

Jim Rozier of Berkeley County, chairman of the S.C. Department of Transportation. Rozier formerly was a Berkeley County supervisor and chairman of that County Council for 16 years. He attended Clemson University.

Where does the money go?

Where the S.C. Transportation Infrastructure Bank has spent money, by region, seince its start in 1997 through May 2015:

Lowcountry and Charleston areas: $1.2 billion

Upstate: $752 million

Horry County area: $618 million

Midlands: $465.6 million

Florence County: $340 million

York County: $176.8 million

Other projects across the state, including guard rails and bridges: $48 million

Total: $3.6 billion

SOURCE: S.C. Transportation Infrastructure Bank