The SCDOT was among the state agencies who testified before the Senate Finance Committee as they began virtual budget deliberations this week. While SCDOT does not receive general fund revenues, because they depend on transactional fees and fuel taxes, they have not been immune to the pandemic’s impacts.

Secretary of Transportation Christy Hall provided an update to the committee on the SCDOT’s finances and actions to keep projects moving forward.

She noted that traffic volumes leveled off in June and remain within 5-15% of 2019 levels. Hall said that car sales were strong despite the reduction in fuel tax revenues, which helped alleviate adverse impacts on revenues for the agency.

Revenue impacts from traffic declines are not immediately felt by SCDOT. Timing plays a key role because of the way fuel tax revenues are collected and ultimately deposited into SCDOT’s account. In addition, tax filing extensions also amplified the importance of timing in regard to financial management. The following illustrates the actual gas tax deposits since March:

According to the data, motor fuel collections are down about $49 million, car sales were up $14.8 million, and DMV fines remain steady. This results in a net revenue loss of $34.2 million since April.

Moving forward, SCDOT is projecting a 6% decline in gas tax revenues and car sales tax revenues through 2022.

Secretary Hall said that the SCDOT continues to work to maintain core operations, keep road and bridge projects moving forward, and protect liquidity for a potential second wave of the virus or other shocks.

In response to the revenue interruptions, the agency implemented a hiring freeze and a 12% cut to the internal operating budget – which equates to roughly $34 million. Similar actions will continue through 2022, depending on revenues.

To date, South Carolina has not had any project delays or cancellations because of the pandemic. In fact, thanks to a collaborative effort between industry partners and SCDOT, a joint workforce safety plan was created in March to ensure that precautions were taken to keep crews safe and allow projects to continue to move forward, all at a time when many other sectors of the economy came to a halt.

Moving forward, SCDOT will continue to monitor revenues and align projects with revenue receipts.

View the full presentation here. 

South Carolina’s Multimodal Transportation Plan serves as the state’s long-term plan (20+ years) and is updated every five years.  Last week, SCDOT Commissioners approved updates to the Multimodal Transportation Plan which included updates to projected annual funding gaps.

Currently, there is an $8.91 Billion funding gap to address and maintain South Carolina’s multimodal needs through 2040. This equates to a $403 million annualized funding gap.

This funding gap is significantly lower than the $1.47 billion annual need forecasted in 2015. Thanks to Acts 275 and 40, SCDOT has seen significant increases in funding to help close that gap. SCDOT has also tempered how they include projects and funding gap figures based on industry, vendor, and delivery capacity restraints. An update on the gaps by category are outlined below:

Projected Funding Gaps Through 2040

 Safety – $1.1 Billion

This equates to a $50 million annualized gap. This revenue would double current rural road safety initiatives and advance safety projects throughout the state.

 Interstates – $2.76 Billion

This equates to a $123 million annualized gap. This revenue would be used to address congestion on interstates and help expedite Rural Interstate Freight capacity projects as well as the I-526 Lowcountry Corridor Project in Charleston.

 Pavements – $0

SCDOT does not forecast a funding gap for pavements through 2040. Based on planned investment levels with the Act 40 revenues, at this time, SCDOT believes they can manage the pavement funds at planned investment levels without additional funding.  

 Bridges – $1.67 Billion

This equates to a $76 million annualized gap. According to SCDOT, approximately 1,520 bridges will become structurally deficient or load restricted by 2040. They estimate that structurally deficient and load restricted bridges will increase by 38 bridges per year. An additional $76 Million per year is needed to help reduce bridge deterioration.

 MPO/COG – $2.2 Billion

This equates to a $100 million annualized gap. SCDOT noted that with increased growth throughout the state, congestion continues to be a major problem. An additional $100 million per year would help reduce congestion issues by increasing the total Guideshare allocation to $238 million. (This money is split among 21 entities across the state.)

 Routine Maintenance – $748 Million

This equates to a $34 million annualized gap.

 Mass Transit – $435.6 Million

This equates to a $19.8 million annualized gap.

 View full details on funding needs here.

 During the 2017 road funding debate, legislators were given a menu of funding options and work that could be done based on respective levels of investment—ultimately settling on the roughly $600 million generated by Act 40.

While Act 40 is helping bring some long-overdue projects to the streets, challenges remain. The funding gaps identified in the multimodal report help bring attention to these needs. Still, it will be officials at the federal, state, and even the local level that can help ensure South Carolina is prepared to address these challenges in a timely manner.

As the U.S. Interstate Highway System reaches 64 years old, it faces increasing congestion, unprecedented levels of travel – particularly by large trucks – and insufficient funding to make needed repairs and improvements. America’s most critical transportation link will need to be rebuilt and expanded to meet the nation’s growing transportation needs, according to a report released today by TRIP, a national transportation research nonprofit. The report, Restoring the Interstate Highway System: Meeting America’s Transportation Needs with a Reliable, Safe & Well-Maintained National Highway Network, looks at the Interstate system’s use, condition and benefits, and the findings of a 2019 report prepared by the Transportation Research Board (TRB),  at the request of Congress as part of the Fixing America’s Surface Transportation (FAST) Act, on the condition and use of the Interstate system and on actions required to restore and upgrade the Interstate system.

The chart below ranks states whose Interstate systems are the most congested, have experienced the greatest increase in vehicle miles of travel (VMT) since 2000, carry the greatest share of commercial trucks, have the largest share of pavement in poor condition and bridges in poor/structurally deficient condition, and have the highest fatality rate. Data for all states can be found in the Appendix.

According to the TRB report, the U.S. Interstate system has a persistent and growing backlog of physical and operational deficiencies as a result of age, heavy use and deferred reinvestment, and is in need of major reconstruction and modernization. The TRB report concludes that annual investment in the Interstate Highway System should be increased approximately two-and-a-half times, from $23 billion in 2018 to $57 billion annually over the next 20 years.

“South Carolina’s economy runs most safely and efficiently for cars and trucks – whether for commuters, tourists, or businesses – with a modern and well-maintained Interstate system,” said Rick Todd, president and CEO of the South Carolina Trucking Association. “For commerce, whether by car or truck, the safest and most efficient Interstate System is one that provides for structural integrity, capacity, and safety. The longer Congress kicks the can down the deteriorating road, the more expensive and divisive it’s going to be for the nation and the states.”

The design of the Interstate – which includes a separation from other roads and rail lines, a minimum of four lanes, paved shoulders and median barriers – makes South Carolina’s Interstates more than two-and-a-half times as safe to travel on as all other roadways. The fatality rate per 100 million vehicle miles of travel on South Carolina’s Interstate in 2018 was 0.87 – the sixth highest in the U.S.- compared to 2.20 on the state’s non-Interstate routes. TRIP estimates that additional safety features on South Carolina’s Interstate Highway System saved 248 lives in 2018.

“The report released by TRIP confirms what American businesses experience every day—our Interstate highway system, which was once the envy of the world, is in serious need of modernization,” said Ed Mortimer, vice president of transportation infrastructure, U.S. Chamber of Commerce. “Commitment to modernization must be shared by federal, state and local leaders as well as the private sector. The Interstate system plays a key national role in economic success and quality of life for every American, and we continue to urge bipartisan solutions to address this critical issue.”

The TRIP report found that since 2000, travel on the U.S. Interstate system, the importance of which has been heightened during the COVID-19 pandemic, has increased at a rate nearly triple that at which new lane capacity is being added. In South Carolina, 49 percent of urban Interstate highways are considered congested during peak hours, the 18^th greatest share in the U.S. Vehicle travel on South Carolina’s Interstates increased 35 percent from 2000 to 2018, the 12^th fastest rate in the nation. Nine percent of Interstate travel in South Carolina is by combination trucks.

“A safe and well-maintained Interstate Highway System can strengthen America’s economy, enhance personal mobility and facilitate more efficient movement of goods, but the future of this network could be in jeopardy without increased federal investment,” said Kathleen Bower, AAA senior vice president of public affairs and international relations. “All states benefit from a modern, accessible Interstate Highway System. AAA urges Congress and the current administration to prioritize transportation investments to ensure safe, efficient and reliable mobility across the United States.”

TRIP’s report finds that while pavement smoothness on most segments of the U.S. Interstate system is acceptable, the crumbling foundations of most highway segments need to be reconstructed, and that continued resurfacing rather than addressing underlying foundational issues provides diminishing returns and results in shorter periods of pavement smoothness.

As the aging system’s foundations continue to deteriorate, most Interstate highways, bridges and interchanges will need to be rebuilt or replaced. Four percent of South Carolina’s Interstate bridges are rated in poor/structurally deficient condition, the 15^th highest share in the U.S.  Nine percent of South Carolina’s Interstate bridges are in need of repair or replacement.  According to the TRIP report, pavements on one percent of South Carolina’s Interstate highways are in poor condition.

Restoring and upgrading the Interstate Highway System to meet the nation’s 21st Century transportation needs will require strong federal leadership and a robust federal-state partnership to reestablish the Interstate Highway System as the nation’s premier transportation network.  The current federal surface transportation program, Fixing America’s Surface Transportation (FAST Act), the primary source of Interstate highway funding, expires on September 30, 2020, and the reauthorization of a new long-term, adequately and reliably funded long-term federal program will be needed to ensure that a strong federal program supports the restoration of the Interstate system.

“With the expiration of the FAST Act rapidly approaching, this report reaffirms how critical it is for lawmakers to prioritize reauthorizing a long-term, fully funded federal highway program this year,” said Rod Schrader, chairman and CEO of Komatsu’s North American operations and chair of the Association of Equipment Manufacturers CE Sector. “Meeting the critical equipment and supply needs of essential industries including construction and agriculture requires a dependable, modernized national transportation network. Equipment manufacturers are working hard to keep these vital industries properly supplied in the midst of COVID-19 and we need lawmakers to do their part to support these essential supply chains now and for the long haul.”

The ability of states to invest in Interstate highway repairs and improvements will be hampered by the tremendous decrease in vehicle travel that has occurred due to the COVID-19 pandemic, which is estimated to reduce state transportation revenues by at least 30 percent – approximately $50 billion – over the next 18 months.

Based on the findings of the TRB Interstate report, TRIP has provided a set of recommendations for the restoration of the Interstate Highway System, which includes:  the foundational reconstruction of Interstate highways, bridges and interchanges; improvement to roadway safety features; system right-sizing, including upgrading of some roadway corridors to Interstate standards; adding needed additional highway capacity on existing routes; adding additional corridors; and, modifying some urban segments to maintain connectivity while remediating economic and social disruption.

“The long-term vision that helped establish the current Interstate system nearly 65 years ago is needed again today,” said Dave Kearby, TRIP’s executive director. “In order to rebuild the nation’s economy, maintain personal and commercial mobility, and improve quality of life, adequate transportation investment and a sustainable, long-term funding source for the federal surface transportation program must remain a priority.”

View this press release online.