The State Transportation Infrastructure Bank (STIB) Funding Policy Subcommittee of the Joint Bond Review Committee (JBRC) held two meetings during the month of October to discuss ways to make the STIB application process and awards more equitable for rural counties.
The subcommittee was formed following the JBRC August meeting, where members expressed concerns with the ability of rural counties to compete for STIB funding. It is co-chaired by Senator Paul Campbell (R-Berkeley) and Gilda Cobb-Hunter (D-Orangeburg). It includes Senator Glenn Reese (D-Spartanburg) and Rep. Gary Simrill (R-York).
Specifically, the subcommittee was tasked with the following:
- Evaluate the STIB’s selection process to ensure equitable consideration and awards for rural versus metropolitan counties’ project proposals.
- Evaluate the STIB’s expectations for the financial capacity to support future projects.
- Propose legislation as appropriate and necessary to support any subcommittee recommendations.
- Provide periodic updates and a final report to the full JBRC committee.
The subcommittee heard testimony from the STIB, SCDOT, Municipal Association of SC, Association of Counties, and the SC Department of Commerce. An overview of the testimony is outlined below:
STIB Chairman John White provided the subcommittee with a thorough update on current processes and project evaluation criteria. He also touted the progress that has been made by the Bank to get back to business and maintaining an open-door policy.
Chairman White outlined the recent changes made regarding scoring projects and weighting criteria to align with SCDOT priorities. He explained that the Bank was bound by statute when it came to awarding projects. Under current law, projects must total at least $25 million, and multiple projects cannot be combined on an application to meet this financial threshold.
He also outlined some preliminary concepts that could potentially be used to assist counties.
Secretary of Transportation Christy Hall provided the subcommittee with an overview of lessons the SCDOT has learned and how they have worked to modify their approaches to ensure resources are allocated equitably. From SCDOT’s perspective, rural and urban areas can’t compete with one another. Hall went on to address some of the unintended consequences resulting from the application of certain policies/methodologies over the years and how the SCDOT made adjustments to address the inequities the one size fits all approaches were producing.
For example, SCDOT quit ranking pavement projects on a statewide basis because some counties received zero dollars, and urban areas continued to have significant advantages. Today, paving dollars are allocated to counties, and ranked projects within the county compete for them. Secretary Hall also noted similar issues with the interstate program because urban projects always rose to the top of the priority list. Because of this, SCDOT knew they had to designate funding to rural interstates. (Hence the creation of the rural freight interstate program.)
Dept. of Commerce
DOC Deputy Secretary Jennifer Fletcher told the subcommittee that infrastructure is key to recruiting companies to South Carolina. Roads are becoming increasingly important because businesses want to move not only goods but also their workforce efficiently.
Recent data indicates that highway accessibility is the #1 factor for companies when considering a location.
DOC Director of Grants and Incentives, Daniel Young, said the agency recognizes that rural counties face challenges, and the agency’s tiering system has helped them balance these challenges. However, he acknowledged that it is difficult for rural counties to get companies’ attention because most are looking for interstate access or “four-lane roads.”
Fletcher also noted that the state needed to look beyond interstate capacity and ensure all roads are considered because the state continues to grow and more traffic continues to divert from crowded interstates to secondary roads. She noted that these traffic diversions impact safety and the quality of life for communities on these routes.
Municipal Association of SC
MASC Director of Advocacy & Communications, Scott Slatton said that the MASC had surveyed its membership regarding STIB applications/awards. Based on the survey, MASC identified the following issues along with potential changes that could be made:
- $25 Million Threshold: Slatton noted that many rural cities have difficulty meeting this threshold; however, there wasn’t necessarily a magic dollar figure because that number will be different for everyone.
- Scoring for Match Requirements: Slatton suggested that the STIB could make scoring more proportional to allow areas to be competitive. Currently, STIB gives additional points based on match, which means some areas can’t compete. He noted an example of an application where the jurisdiction offered a 35% match, but their application lost out to a more affluent area that could provide a 65% match.
- Bundling of Projects: According to Slatton, allowing multiple projects in an application would greatly assist small/rural areas in meeting threshold requirements and would also help spread STIB funds across the state.
- Cleaving Funds: Slatton expressed support for a concept that has been previously discussed by the subcommittee. Acknowledging the term “set aside” has a negative connotation, he said if there were a way to “cleave” some STIB monies solely for rural areas, that would help guarantee these areas could access STIB funding.
- Funding Sources: MASC members also had concerns about the types of revenues used to leverage projects. Cities and towns cannot pledge funds due to statute (or lack thereof). Slatton suggested that when voters rejected a county penny referendum, cities should have the opportunity to attempt to pass their own. He also mentioned that statutory changes to allow the use of local accommodations taxes and hospitality taxes could be considered.
SC Association of Counties
SCAC’s Assistant Director of Government Affairs, Owen McBride, outlined several concepts the organization would be supportive of, including the bundling of projects and concerns with existing processes.
McBride expressed concerns about how the STIB has been awarding grants to larger counties and loans to smaller/rural counties. He suggested prioritizing grants for rural areas and using loans for larger counties would benefit all parties. He also echoed the cities’ concerns regarding match requirements, citing that they tend to favor areas with more resources.
Senator Campbell and Rep. Cobb-Hunter continued to express support for bundling projects and encouraged MASC and SCAC to work together to draft language on how bundling could work. Senator Campbell also acknowledged that local governments will need to continue to step up to fund infrastructure.
A summary of the testimony will be provided to the full JBRC in December for review.