Legislature looks to keep foot on pedal for road funding

By Chuck Crumbo
ccrumbo@scbiznews.com
Published Dec. 5, 2013

Although it has taken a few years, state Sen. Joel Lourie said today that he thinks the General Assembly is finally tuning in to the business community’s message that South Carolina’s transportation infrastructure needs fixing.

“I think the Legislature is starting to listen,” the Columbia Democrat said at this morning’s Power Breakfast legislative panel discussion hosted by the Columbia Regional Business Report. “But we can’t stop, because if we don’t continue to make significant investments in our roads and bridges, it affects everything we do. It affects our quality of life, it affects our competitiveness in terms of recruiting industry, and it affects public safety.”

Columbia Regional Business Report Publisher Bob Bouyea (from left) led a panel discussion of legislative issues that included S.C. Sen. Ronnie Cromer, Rep. James Smith, S.C. Chamber of Commerce President Otis Rawl, Sen. Joel Lourie and Rep. Nathan Ballentine. (Photo by James T. Hammond)
Columbia Regional Business Report Publisher Bob Bouyea (from left) led a panel discussion of legislative issues that included S.C. Sen. Ronnie Cromer, Rep. James Smith, S.C. Chamber of Commerce President Otis Rawl, Sen. Joel Lourie and Rep. Nathan Ballentine. (Photo by James T. Hammond)
Lourie and other members of the panel pointed out that this year the Legislature passed and Gov. Nikki Haley signed a bill that commits $600 million for building and repairing roads and bridges. It was the first increase in state funding for highways in nearly three decades.

However, the S.C. Department of Transportation says the state faces a $29 billion shortfall in highway funding for next 20 years.

Finding more money to fix the roads is an “ongoing” process, said Sen. Ronnie Cromer, R-Newberry. “I’m trying to figure out how to accomplish raising funds and where the funds are going to come from for our dilapidated roads and bridges. We’ve really got to put some effort into it.”

Staying on top the road issue is a matter of competitiveness, said Rep. James Smith, D-Columbia.

“We did make a good start last year, but it really needs a lot more investment if we are to prepare for the future,” Smith said. He added that for the state to be successful in recruiting and fostering business it also needs to focus on education and technical training programs.

Otis Rawl, president and CEO of the S.C. Chamber of Commerce said the money the Legislature found was an “extremely good step forward.”

But more needs to be done in correcting some of the major chokepoints along the state’s interstate highway system. Rawl noted that the state is working on improving Interstate 526 in Charleston County and I-385 in Greenville County but stressed, “What we’ve got to fix right now is Malfunction Junction in Columbia,” where interstates 26 and 20 intersect northwest of downtown Columbia. He added, “If we fix those three things, at least from an infrastructure standpoint, I think we’ve gone a long way toward improving our capacity to move freight and people around this state.”

In November, the state Transportation Infrastructure Bank Board approved a proposal to set aside $10 million to begin redesign work on Malfunction Junction. The estimated cost of a package of improvements for the interchange ranges from $800 million to $1 billion.

As far as raising money for transportation, Lourie said all options are on the table.

Advocates say some of the funding problems could be solved if the state raised the gas tax, which is the fourth lowest in the country.

However, there seems to be little political will in the Legislature to tackle the gas tax, and Haley has said she’s against it.

Rawl said the chamber won’t try to put Haley and her likely Democratic opponent, Sen. Vincent Sheheen of Camden, “on the spot” before November’s election for supporting an increase in the gasoline tax.

Public sentiment, though, seems to slightly favor a gas tax increase. According to the Winthrop Poll, released in November, 50.5% of South Carolinians favor increasing the state’s 16.5 cent-per-gallon gasoline tax to pay for road and bridge improvements.

Other funding mechanisms such as indexing the gas tax to the rate of inflation, raising fees for driver’s licenses and even assessing a user tax for owners of fuel-efficient hybrids might be on the table.

Sen. Nathan Ballentine, R-Irmo, suggested there are other ways to find the money besides raising fees or taxes.

One possibility, Ballentine said, is ramping up the collection of state sales tax on items bought online. Although state law requires South Carolinians to pay sales tax on online purchases, some e-commerce firms don’t collect the tax, and few people report the purchases on their state income tax forms.

A bill to require all e-commerce merchants to collect individual state sales tax has been passed by the U.S. Senate and now is before the House.

If the bill becomes federal law, there’s legislation in the S.C. House that would require the state to use the money collected from the sales tax of online goods to pay for infrastructure improvements, Ballentine said.

It’s estimated that the bill would bring in $80 million to $200 million a year in uncollected sales tax, Ballentine said.

“Roads and infrastructure are all part of the effort to put South Carolina back to work,” Ballentine said.

With plans to deepen Charleston Harbor and expand the Port of Charleston to accommodate the larger freight ships expected to sail through a revamped Panama Canal, South Carolina has a chance to “be on the cutting edge of really being a major hub on the East Coast,” Lourie said.

“But we have to be able to ship freight up and down I-26,” Lourie said.

Reach Chuck Crumbo at 803-726-7542.

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