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Common Cents: SC Fuel Tax is Funding Improvements

South Carolina’s fuel tax increased by two cents on July 1, bringing the statewide total to 22.75 cents per gallon. The increase marks year three of the six-year phase-in period established by the 2017 road funding law.

Why is the Fuel Tax Increasing?

The primary source of state funding for roads and bridges comes from the state fuel tax. Prior to 2017, South Carolina had not adjusted the fuel tax since 1987. South Carolina’s fuel tax was among the lowest in the nation and had lost a significant amount of buying power.

The SC Legislature made transportation infrastructure a priority in 2017, choosing to increase vehicle-related fees to make additional investments to fund improvements to South Carolina’s extensive state-owned road system.

All of the new user-fee based revenues, including the fuel tax, are being used to make repairs and improvements to existing roads and bridges in all 46 counties in South Carolina.

The 2017 investment was long overdue, and right now, South Carolina is working to make up for years of neglect due to underfunding.

All of the new revenues go directly to the Infrastructure Maintenance Trust Fund to be used on repairs to existing roads and bridges across the state. A full accounting of this fund, including project lists, and vendor payments are available online and updated monthly.

To date, over $1 billion has been committed to fund improvements to over 3,000 miles in ALL 46 counties in South Carolina.

NONE of these improvements would be possible without the revenues from the 2017 road funding law.

Despite the increase, our gas receipts will still be among the cheapest in the nation. For example, here’s how much you would be paying in state taxes/fees to fill up in our sister states:

Also, just for comparison on July 1, 2019, the average price of regular unleaded gasoline in SC was $2.37 per gallon – which is lower than it was the year before. (On July 1, 2018, the average price was $2.52 per gallon.) View more details about South Carolina’s gas tax prices here.

South Carolina is not alone when it comes to increasing fuel taxes to fund road improvements. Since 2013, 31 states have adjusted their fuel taxes to fund transportation infrastructure improvements.

2019 State of the SCDOT

The SCDOT Commission’s February meeting was held on Thursday with Chairman Robby Robbins (Dist.1) presiding. The primary focus of the meeting was the presentation of the annual State of the SCDOT report. SCDOT Secretary of Transportation Christy Hall recently gave this report to the Senate Transportation Committee, and Thursday’s presentation to the Commission was unchanged. However, given the time constraints of the Transportation Committee meeting, she was able to provide additional details in her report to the Commission.

Pavements

Secretary Hall emphasized that one of the top priorities of the 10-year plan was to address pavements and the majority of the new money in the Infrastructure Maintenance Trust Fund (IMTF) was going towards improving pavements.

Currently, the SCDOT has $417 million invested in pavements (up from $291 million before Act 40), and that number will continue to climb each year. At full implementation of Act 40, the SCDOT plans to have $702 million invested in pavements annually.

Secretary Hall reminded Commissioners that the state had $11 billion worth of pavement needs as a result of 30 years’ worth of backlogged maintenance. While not every road is going to be paved, with the continued increase of investments in the coming years, Hall said she expected the public to see a dramatic increase in construction across the state.

The 10-Year Plan is dependent upon the Infrastructure Maintenance Trust Fund, Federal Funding, and other State Revenues dedicated to SCDOT. Source: 2019 State of the SCDOT Presentation, SCDOT Commission Notebook February 21, 2019.

Bridges

There are 755 structurally deficient bridges and 366 load-restricted bridges in South Carolina. Currently, the state is investing over $100 million in bridges and that number is expected to grow. It is important to note that the additional revenues generated by Act 40 (and deposited into the IMTF) are supplementing the existing bridge program. Secretary Hall emphasized that Act 98 jump-started the bridge program and since passage of Act 98, 71 bridge projects have been completed and more than 50 were under construction.

While the 10-year plan and additional funding will go towards repairing 465 structurally deficient and load-restricted bridges, other bridges that might not be categorized as such will continue to decay over the years. Therefore, the SCDOT will need to assess their strategy for the bridge program over time.

Interstates

SCDOT has completed over 70 miles of interstate widenings since 2017. In the next 12-18 months, another $2 billion worth of interstate work is expected to begin. This work will be in the Midlands region, with Carolina Crossroads (Malfunction Junction) and a section of I-26.

In 2022, another $3 billion is expected to be underway, with the bulk of the projects in the Charleston region. This includes widening for the existing 526 as well as bridge work that will need to be designed to meet future economic needs (i.e., port containers and population growth).

In addition to these widenings, the agency also continues to work on moving the rural interstate improvement program forward. As we have previously reported, the SCDOT plans to utilize $110 million after the tax credit sunsets in 2022. Over the next few months, SCDOT will be working to recommend ranked projects for Commission approval. Secretary Hall said that they want to continue to move forward with preliminary work so when the money becomes available the projects can start.

Secretary Hall also noted that a lot of the interstate work that is in the pipeline is work that should have been done ten years ago, but the money just wasn’t there to do it.

Source: 2019 State of the SCDOT Presentation, SCDOT Commission Notebook February 21, 2019.

Congestion Will be the Next Priority

Secretary Hall emphasized the need for any additional funding that the state receives from the federal government or otherwise would need to go to the MPO/COG program so it could be put towards non-interstate capacity needs. Over the past five years, South Carolina has seen a 20% increase in growth and miles traveled.

“This is not getting any better, and it will only get worse,” Hall said.

Currently, there is no funding within SCDOT to cover these needs, and while local option sales taxes help, they are certainly not enough.

Historic Amount of Work Underway

SCDOT continues to tout that the value of road work on the streets has tripled in value. Currently there is $3 billion worth of work under contract across the state and the number is expected to grow. So what is that $3 billion going towards? Here’s a closer look at the allocations based on types of projects/programs:

Pavements are a top priority. With $900 million in direct contracts, as well as $421 allocated to CTCs (which is primarily used for pavement improvements) you can see that pavements make up nearly half of the work.

Remember, 80% of the state’s pavements need repair and those repairs come with an $11 billion price tag. It will certainly take longer than 10 years to #fixscroads. We estimate it will take roughly 20+ years before the vast majority of pavements are in good shape across the state. This should not come as a surprise to anyone. It took decades for our roads to get in this condition and it will certainly take just as long to repair and rebuild them. You can’t #fixscroads overnight!

The next SCDOT Commission meeting is scheduled for March 21, 2019.

SCDOT Rolls Out Rural Road Safety Program

South Carolina’s roadways are known as the best at being the worst. The state holds first place for the highest road fatality rate in the nation. Lack of infrastructure investment over time has allowed SC’s roads to crumble, resulting in hazardous conditions for motorists.

This legislative session, however, SC lawmakers voted to raise the state’s motor fuel user fee for the first time since 1987. The increased funding will provide SCDOT with the means to begin addressing the prevalence of highway fatalities.

The first step? Repairing dangerous rural roadways – as approximately 58% of traffic fatalities in the state occur on rural roads.

Due to the promise of increased funding, SCDOT has rolled out their Rural Roads Safety Program. Secretary Hall has stated that the program will target the “worst of the worst roads in our state.”

The department ranked roadways by prevalence of fatal and serious injury, run-off-road crashes, and average daily traffic. The data yielded 1,957 miles of rural road in desperate need of repair and tailor-fit solutions. Modifications will include engineering solutions to prevent vehicles from leaving the roadways, including rumble strips and wider shoulders.

SCDOT is providing public notification Phase -I of the Off-interstate Rural Road Safety Program. The comprehensive proposed project priority list provides details of 29 rural roads in 25 counties.

Phase I includes the first 500 miles of the 2000 miles of rural roads where 5% of the deadliest crashes occur. Improvement projects will be broken down into 10-mile segments, and Phase I expected to be complete in three-to-four years. The entire 2,000-mile project is expected to be complete in 10 years.

Click Here to View Phase I Project List

Pending consideration of public comments and based on available funding, the projects will be recommended for inclusion in the Statewide Transportation Improvement Program (STIP).

If you would like to make a comment regarding the recommendations, you may fill out SCDOT’s Email Form. Comments will be accepted until the close of business on July 11, 2017.

While South Carolina’s infrastructure crisis will not be alleviated overnight, SCDOT is hard at work addressing the state’s most critical issues.

We commend South Carolina’s lawmakers for passing legislation that provides SCDOT with the necessary resources to #FIXSCROADS

Sources:
SCDOT.org and SCDOT’s Rural Road Safety Presentation.
“Deadly Midlands Road Top Target for New Gas Tax Money” by Cassie Cope, The State.