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.  

Primary elections will be held on Tuesday, June 9, and this year, South Carolina is expecting a record number of absentee ballots due to COVID-19. Learn more about absentee voting here.

If you are voting in person, be sure to plan ahead before going to the polls!

Preview a Sample Ballot 

Find Your Polling Location

Every vote counts! Make your voice heard on Tuesday, June 9, 2020.

Additional information and resources for voters are available through the SC Election Commission. 

The SCDOT Commission met Thursday at the USC Alumni Center to allow for social distancing between Commissioners and SCDOT staff.  The meeting was streamed online for the public to watch. This was the first Commission meeting since February, so in addition to typical business, Commissioners were able to get a thorough update from SCDOT staff on the impacts of COVID-19 on the agency.

Traffic volume is a key indicator of revenue trends, and, like many other states, South Carolina saw a significant drop in April. The chart below indicates the impacts that various closures/orders had on traffic volumes across the state. As you can see, traffic volumes continue to trend upward as the state slowly begins to reopen.

 

In some cases, some areas are now experiencing normal or above-average traffic volumes.
• Most interstates are now trending 80-85% of normal volumes.
• Non-interstate routes in urban areas (midlands/upstate) are near normal levels.
• Coastal areas are experiencing dramatic increases in traffic.

Decreases and delays in revenues are inevitable, given the reduction in traffic volumes over the past two months and filing extensions granted by state agencies.

Delays will stem from deferrals and grace periods established by the SC Department of Revenue (DOR) and the SC Department of Motor Vehicles (DMV) for remittance of certain revenues and fees. These extensions through June and July will interrupt cash flow for 2-3 months and will limit visibility to revenue streams.

Currently, the impacts of the state’s primary revenue sources on the current fiscal year is estimated to be a reduction of $78 Million:
• Fuel taxes – $54 million
• Infrastructure Maintenance Fee (formerly the car sales tax) – $24 million

If the overall economic recovery is drawn out, South Carolina could be looking at a $140 million reduction in FY2020-2021 and $75 million in FY2021-2022.

To help “flatten the cash curve” and ensure that core operations and road and bridge projects can continue,  SCDOT has implemented measures to reduce internal operating expenses.

The SCDOT plans to continue work as planned, and May, June, and July lettings will not be affected. Moving forward, projects will be paced 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 over the past two months, infrastructure is not immune to the impacts of this virus. South Carolina joins 49 other states who are all seeing impacts on transportation revenues due to COVID-19.

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 HAS NATION’S HIGHEST RATE OF RURAL TRAFFIC FATALITIES AND SIGNIFICANT RURAL ROAD AND BRIDGE DEFICIENCIES; ADDRESSING NATION’S ANTICIPATED $50 BILLION DECREASE IN STATE TRANSPORTATION REVENUES DUE TO COVID-19 SEEN AS VITAL TO FUNDING NEEDED REPAIRS & MODERNIZATION TO IMPROVE RURAL CONDITIONS, SUPPORT ECONOMIC RECOVERY AND BOOST SAFETY

America’s rural transportation system is in need of repairs and modernization to support economic growth and improve traffic safety in the nation’s Heartland, but the US faces a $211 billion backlog in funding for needed repairs and improvements to the rural transportation system. This is according to a new report released today by TRIP, a national transportation research nonprofit. The report, Rural Connections: Challenges and Opportunities in America’s Heartland, evaluates the safety and condition of the nation’s rural roads and bridges and finds that America’s rural transportation system is in need of immediate improvements to address deficient roads and bridges, high crash rates, and inadequate connectivity and capacity.

The importance of the rural transportation system as the backbone of the nation’s energy, food and fiber supply chain has been heightened during the response to the COVID-19 pandemic. Addressing the nation’s rural transportation challenges will require a significant increase in investment, but the tremendous decrease in vehicle travel that has occurred due to the COVID-19 pandemic is estimated to reduce state transportation revenues by at least 30 percent – approximately $50 billion – over the next 18 months.

The chart below ranks states based on their rate of rural pavements in poor condition, share of rural bridges that are rated poor/structurally deficient, and fatality rates on non-Interstate, rural roads.

The report finds that the rate of traffic fatalities on South Carolina’s non-Interstate, rural roads is significantly higher than the fatality rate on all other roads in the state – 3.44 fatalities per 100 million vehicle miles of travel vs. 1.12 – and is the highest in the nation. Rural roads are more likely to have narrow lanes, limited shoulders, sharp curves, exposed hazards, pavement drop-offs, steep slopes and limited clear zones along roadsides. There were 593 fatalities on South Carolina’s non-Interstate, rural roads in 2018. South Carolina’s rural roads and bridges have significant deficiencies. Fifteen percent of South Carolina’s rural roads are rated in poor condition – the 20th highest rate in the nation- and 23 percent are in mediocre condition. Nine percent of South Carolina’s rural bridges are rated in poor/structurally deficient condition, the 19th highest rate in the nation. Bridges rated poor/structurally deficient have significant deterioration to the major components of the bridge and are often posted for lower weight or closed to traffic, restricting or redirecting large vehicles, including agricultural equipment, commercial trucks, school buses and emergency services vehicles.

“Rural road safety continues to be a priority in South Carolina. Three years into the state’s ten-year plan, safety specific improvements have been addressed on approximately 400 miles of rural roads,” said Jennifer Patterson, executive director of the South Carolina Alliance to Fix Our Roads. “During a time when it seems as if life has come to a halt, road work has not. We are thankful to the men and women who are working to ensure repairs and improvements to our roads and bridges continue moving forward. South Carolinians, our economy, and our ability to move past this crisis are riding on the essential work that they do.”

View the full SC Press release here.