NEWS: Infrastructure Bank faces big challenges

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By Bill Davis  |  Plans are swirling in Columbia for how to improve the S.C. Transportation Infrastructure Bank, a major fiscal tool for big project that pave and fix the state’s roads and bridges

South Carolina, which has the fourth-largest roadway system in the country, is still facing a $40 billion tab to get its roadways up to a “good” level, according to the federal government.

15.0918.stiblogoLegislative efforts to more fully fund road projects have met with little success in recent years, even as costs continue to expand. Thanks to inflation, the state gas tax which fuels most major road projects, is bringing in about half of what it did when it was passed in 1997, according to state Department of Transportation.

Outside of a general disdain for raising taxes, another one of the main reasons for the slowed legislative response in dealing with road needs has been dissatisfaction with how the state Infrastructure Bank is, well, structured, according to several Statehouse sources.

The last time that state legislators were able to get new money for the bank was in 2013 when they approved $50 million for roads which allowed the bank to borrow $500 million. As many observe, that investment is a drop in the bucket to the state’s huge road maintenance needs.

Columbia political watchdog S.C. Policy Council complains that seniority in the legislature has too much influence in the process, and that only a few corners of the state benefit.

Also, the watchdog has barked that state Sen. Hugh Leatherman, R-Florence, has too much control over the situation, as president pro tempore of the Senate and chair of the Finance Committee.

Every politician in Columbia, it seems, is worried that another district may get a bigger slice of the roads pie, and that politics will trump sanity and defined need.

Evidence: When two members of the House last year asked if the city they represented could take its own money to construct a stoplight outside an elementary school, they were loudly shouted down on the floor because it was seen as even a mild threat to the existing priority list.

In the State of the State address earlier this year, Gov. Nikki Haley called for the Infrastructure Bank to be reassigned to her cabinet with her oversight.

The argument was that since the governor represents the entire state, politics would be removed from the process of deciding which part of the state gets what roads project and when.

Those projects can bring with them needed jobs and economic activity, and serve as an additional lure to outside private investment and expansion, as has been the case in the Lowcountry with projects related to Boeing and Volvo.

As with other calls for restructuring state government and shift more current legislative power to a governor, the General Assembly is more than a little cool to the proposed shift.

The fear is that politics will become an even bigger force, not smaller, in assigning priority and scope to roads projects, as a governor may “log roll” legislators by holding roads projects over their heads in return for votes on other matters dear to the governor’s agenda.

Two alternative plans cropped up this last legislative session that will likely resurface in the coming year.

First in the state Senate, Majority Leader Harvey Peeler (R-Gaffney) came up with his solution in which running the Infrastructure Bank would be handed over to the governor, but its eight-member board would serve at the pleasure and consent of the Senate. That would mean any vote of the board that displeased the Senate could result in a quick exit of a board member or the entire board. And that could act as a breaker for any power move by a governor.

Simrill

Simrill

Second in the S.C. House, state Rep. Gary Simrill (R-Rock Hill) threw himself into subcommittee work looking into the morass and history of roads projects in South Carolina.

After studying what he called the “genealogy” of the current situation, Simrill traced the beginnings of the current problem to the 1920s, when state senators held considerably more political power and steered roads projects and state funding to their counties.

“I’ll tell you this: Asphalt has always been extremely political,” he said this week in an interview.

Simrill’s plan, which drew bipartisan support in the House and a cold shoulder in the Senate, would drop the state’s gas tax from 16 cents per gallon to 10-percent of gas sales.

Changing from a volume tax to a value-based, or excise, tax could begin to pay off handsomely for the state once gas prices climb closer to $3 a gallon, creating a bigger funding source for the DOT and the Infrastructure Bank, said Simrill.

His plan would also expand the bank’s number of board members from eight to 13, making sure that rural areas would be more represented in road-building decisions going forward.

Simrill allowed that of late, the Infrastructure Bank hasn’t been dominated by seniority, pointing to a lone I-85 Interstate 95 widening project in Leatherman’s district atop the bank’s project priority list.

But, Simrill said, that’s no reason not to do what would be even better for the state.

“We need to make the system a needs-based system, and not a political turf system,” he said.

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