SOMETIMES, I can’t decide whether to laugh or cry about South Carolina’s highway funding mechanism.
Consider the opening paragraph from a recent Greenville News article: “Some state highway commissioners are worried that political influence might be used in determining where some of the road money approved by lawmakers will go because of language in the bill.”
To be sure, it’s a legitimate concern. Decisions about how to spend $500 million in new highway funds will be made not by those highway commissioners, who signed off on their interstate-expansions-heavy wish list last week, but by the State Transportation Infrastructure Bank Board, which last year maxed out all of its own bonding capacity and committed $150 million in future bonding capacity on a controversial highway that is not on the state’s priority list. It is, however, in Charleston County, home to the two legislators who until last year appointed the majority of the board’s members and recipient, along with Horry County, of a full 56 percent of the bank’s funding over the past 15 years.
And as the article points out, the Legislature didn’t even mandate that the bank spend the money the way the Transportation Department recommends, as legislators assured us they had. Instead, the law simply says the department will submit a list of projects to the bank “for its consideration.”
In that way, the new law is reminiscent of Act 114, the 2007 state law that legislators assured us required the Transportation Department to use objective criteria to decide which road and bridge projects to fund. Only it didn’t.
The 2007 law does require the commission to use objective criteria to rank road projects, but it allows the commission to ignore that ranking. As it did most spectacularly in 2011, voting to max out our highway bonding capacity for a decade on a $344 million bond package to build five projects, only one of which scored well and one of which — a $105 million interchange to nowhere — hadn’t even been graded. Last year, the Transportation Commission finally bowed to public pressure and abandoned the package.
That would be the same commission whose members are now fretting that the Infrastructure Bank board might ignore their priorities. And allow politics to influence their decisions.
“We’re going to give the SIB board a list generated under Act 114 and hope they follow that,” Department of Transportation Chairman Johnny Edwards told The Greenville News. “I don’t think they have to follow that but we’d like to see them follow that because I think Act 114 is critical to take the politics out of roadwork.”
Well, yes, using Act 114’s objective criteria is critical to taking politics out of roadwork. Too bad Mr. Edwards and his fellow highway commissioners haven’t previously seen fit to actually comply with the rankings generated by those criteria, rather than employing the loophole that freed them to make their decisions based on political influence.
For his part, Infrastructure Bank Vice Chairman Max Metcalf said he expected the bank “is going to be very responsible, as we have been in the past.” Which leaves me wondering which it’s going to do: Act responsibly? Or act the way it has in the past?
It would be bad enough to trust our highway-building and -repair decisions to these two logrolling political boards if the underlying funding plan were sound. It is not.
Politics, of course, is all about compromise. That means that sometimes you have to accept policy decisions that aren’t ideal in order to achieve monumental progress. On the other hand, sometimes in order to make really smart policy choices, you have to accept incremental progress.
The highway-funding package the Legislature adopted before leaving town last month gives us the worst of both worlds: bad policy that accomplishes little.
Depending on who’s doing the counting, South Carolina needs to spend anywhere from $500 million to $1.5 billion more than already expected on roads and bridges every year for the next decade. Or two. The plan the Legislature passed this spring could generate up to $1 billion, when you include federal matching funds.
Which sounds impressive, until you realize that’s not $1 billion per year. The Legislature appropriated only $141 million this year — and only that much if there’s enough surplus money that didn’t get spent in the year that ended June 30. Fifty million dollars of that is a down payment to borrow $500 million, which would have to be repaid with the corresponding $50 million per year that the legislation diverts to highway funding.
The legislation would make only $41 million available annually. That’s compared to the $500 million to $1.5 billion we need annually.
In other words, it’s an itty-bitty, teeny-tiny drop in the bucket. And in order to get that drop, lawmakers agreed to permanently divert sales tax revenue from the general fund, for the first time ever abandoning the proposition that roads should be funded through gasoline taxes and license fees and other payments that are directly related to the use of roads.
Until now, we’ve reserved general tax revenue for more general needs, and indeed, the sales tax was instituted, and on several occasions raised, specifically to pay for public schools. No more.
The diversion is small, but once we’ve broken the barrier and started using general fund revenue to pay for roads, the only questions are how soon and how rapidly it will grow. The backlog is so formidable that it’s not inconceivable that road spending could crowd out public education, which already is being crowded out by medical care, at the top of our general expenditures.
And you thought our legislators made lousy decisions about how to spend our tax dollars.
Wait till you see what happens when more and more of those decisions are made by people whose judgment worries even our highway commissioners.
Ms. Scoppe can be reached at email@example.com or at (803) 771-8571. Follow her on Twitter @CindiScoppe.