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

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.

SCDOT

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.  

Next Steps

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.  

Important Dates to Remember

All South Carolina voters are eligible to vote absentee in the November election due to COVID-19. In-person absentee voting is underway across the state and runs through November 2. If you would like to vote absentee by mail, you must request your ballot by October 24. Ballots can be returned in person or by mail, so plan accordingly as your ballot must be received by 7:00 pm on November 3.

Of course, you can always vote in person on election day – Tuesday, November 3.

Learn more about absentee voting here. 

Witness Signature Required for Absentee Ballots

The US Supreme Court stepped in and said South Carolina voters must have their absentee ballot signed by a witness for the November election. This ruling comes as lower courts have continued to go back and forth on the issue over the past few weeks. Because the ruling came amid absentee voting, the court order specifies that all ballots received through October 7 must be counted regardless of signature.

So who can be a witness? Anyone. A spouse, friend, neighbor, or child can witness and sign the voter mail-in envelope along with their address. No notary or any other type of authorization is required.

Please visit the SC Election Commission for more information and additional voter resources. 

 

The legislature has approved Governor McMaster’s two appointees to the SCDOT Commission.

Nancy Whitworth was confirmed by the House and the Senate to serve on the SCDOT Commission as an at-large Commissioner through February 2022. Whitworth was appointed to fill the remaining term of Kristen Blanchard, who resigned earlier this year to run for the SC Senate.

Whitworth worked for the City of Greenville for 40 years and recently retired as Interim City Manager. She currently serves as a consultant for One Spartanburg, Inc. (formerly the Spartanburg Area Chamber of Commerce).

Pamela Christopher was approved by the 3rd Congressional District delegation to serve as the 3rd district appointee to the Commission. Christopher was appointed to fill the seat of Ben Davis, who did not seek another term. Her term runs through February 2024.

Christopher is the President and CEO of the Anderson Area Chamber of Commerce.

SCFOR would like to congratulate Whitworth and Christopher on their appointments and appreciate their willingness to serve. They will undoubtedly bring a unique perspective to the Commission, and we look forward to working with them.

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. 

COVID-19 resulted in a loss of $29.6 million for SCDOT in the 2019-2020 fiscal year. While we don’t consider any loss of revenue something to celebrate, the good news is, this figure is much lower than the initial May estimate of $78 million.

The main drivers of the reduction stem from traffic decline; however, traffic steadily increased as the state reopened. People have also continued to buy cars, which helped soften the blow.

Due to the SCDOT’s austerity measures to reduce internal expenses, cash remains steady. Secretary of Transportation Christy Hall has also implemented a budget cut of 12% for the internal operating budget for FY20-21. This reduction affects administrative items only, and keeping road and bridge projects moving forward remains a top priority.

To date, no projects have been delayed due to financial concerns. Moving forward, SCDOT will continue to align projects with revenue receipts.

COVID-19 has wreaked havoc on every aspect of the economy.  Despite the fact that South Carolina has been able to keep road and bridge projects going, infrastructure is not immune to the impacts of this virus. While the duration and true impacts remain unknown, SCFOR will continue to follow the financial impacts and projections. Roads and bridges keep our economy moving; therefore, they will play a critical role in the state’s economic recovery.

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. 

The State Transportation Infrastructure Bank (STIB) Evaluation Committee met Monday to review pending 2019 applications. The Bank received 12 applications in 2019, and representatives from each City/County briefly presented overviews of their proposed projects. Ultimately, the Committee selected seven projects which moved to the full STIB Board for approval on Tuesday.

STIB Chairman John White said that due to the economic impacts of COVID-19, the Bank’s capacity had been reduced to $490 million. This is a $170 million reduction from last year.

Because of the economic turmoil, the STIB Board approved the Evaluation Committee’s recommendation to award projects in two phases, using up to 75% of capacity in Phase 1. The seven projects approved by the STIB for Phase 1 are outlined below.

These applications will go to the Joint Bond Review Committee (JBRC) for review.

The majority of the projects awarded Tuesday will help alleviate congestion in their respective areas.

In the case of the I-95 Exit 3 project, locals contend that the project will bring tremendous economic impacts to the area and benefit the state as a whole.  Chairman White noted that the Exit 3 project could be a transformative project for the Bank, and he predicted that years from now, people would look back and know the Bank had the vision to make that project happen.

All remaining 2019 applications will remain viable through 12/31/2020 and will have a chance for any awards made in Phase 2 (possibly in late fall).

Chairman White noted that the STIB would inform applicants who were not selected this round of their score and any additional information that may be needed regarding their applications.

South Carolina’s transportation infrastructure is funded with federal dollars and state revenues generated from motor fuel user fees and vehicle-related fees. Federal funds account for nearly 50% of transportation spending in South Carolina, while state revenues make up the other half.

 In South Carolina, the state motor fuel user fee (aka the “gas tax”) is the primary source of state revenue for roads and bridges. 

Beginning July 1, when drivers fill up with gasoline or diesel, they will pay two cents more per gallon. This increase will bring the total state taxes/fees on fuel to 24.75 cents per gallon.

The new revenues are part of the plan passed in 2017 to increase the fuel tax by 12 cents over a period of six years, to help generate desperately needed revenues so the state could begin tackling long-overdue repairs to our roads and bridges.

As South Carolina works to address this monumental task, these revenues serve as the foundation for getting that work done. Learn more about how the new revenues are being spent here. 

Using the interactive maps below, take a look at how South Carolina compares to other states. You will see that despite our increase, we remain significantly lower than our sister states and much lower than the national average.

Unfortunately, South Carolina is having to playing catch-up, and it’s going to take time to address the amount of work that needs to be done. The good news is, progress is being made and the new revenues are being invested to address repairs in every county in South Carolina.

South Carolina is not alone when it comes to investing  in road and bridge repairs. Since 2013, 31 states have increased their fuel taxes to address infrastructure needs.