Utility Relocation Heads to Senate Floor Utility relocation legislation, S.401, sponsored by Senator Paul Campbell (R-Berkeley) was amended and reported favorably out of the Senate Transportation Committee this week.
The bill relates to road construction projects and impacts on local water and sewer lines. (A companion bill, H.3799, currently resides in the House Education & Public Works Committee.)
During a subcommittee meeting on Tuesday, SCDOT Deputy Secretary of Engineering, Leland Colvin, testified that weather and utilities are the two most likely causes for delays on projects and the SCDOT’s support was solely based on improving the efficiency of project timelines. However, he added that every dollar spent on relocation is another dollar taken away from repaving and bridges.
Representatives from water and sewer interests also testified, including Earl Hunter, who emphasized that the bill would promote the acceleration of projects as well as lower costs for ratepayers and citizens. He reiterated that the bill was the result of years of negotiations and similar legislation passed the Senate last year 41-0.
Under the bill as amended, water and sewer utilities would be classified as large or small, and reimbursements of costs by SCDOT (or other entity undertaking the project) would be based on the respective classification. All costs would be covered for small utilities, and up to 4.5% of the costs associated with relocation would be covered for large utilities.
The bill requires that the relocation must be placed under the general contractor for the project; however, large utilities can opt out but must abide by the construction schedule or forfeit funding. The bill was also amended to include language to grandfather in projects underway, require SCDOT to report on relocation metrics annually, and to sunset the legislation in 2026.
The bill now heads to the Senate floor.
Roads and Bridges Continue to Be a Top Concern of SC Residents No surprise here! The latest Winthrop poll finds that SC residents believe one of the most important issues facing the Palmetto State continues to be our roads and bridges. Check out this year's poll which gauges public opinion on everything from elected officials to the economy.
Economist Weighs in on SC Tax Reform Renowned economist Dr. Arthur Laffer presented to the House Tax Policy Review Committee this week. He was introduced by Governor Henry McMaster, who joined Committee members as a participant in Thursday’s meeting.
Dr. Laffer is known for founding the Laffer Curve in 1979 which is an economic theory that states lower tax rates boost economic growth. It also served as the basis for the Reagan tax cuts. The Laffer Curve describes how changes in tax rates affect government revenues in two ways. One is immediate, which Laffer describes as "arithmetic." Every dollar in tax cuts translates directly to one less dollar in government revenue. The other effect is longer-term, which Laffer describes as the "economic" effect. It works in the opposite direction. Lower tax rates put money into the hands of taxpayers, who then spend it. It creates more business activity to meet consumer demand.
Laffer provided a broad overview of his theory and cited examples of other states who thrive economically with low tax rates and broad tax bases. He affirmed what he considered to be the three pillars of sound fiscal policy:
1. “Collect revenues in the least damaging fashion.”
2. “Spend money collected in a most beneficial fashion.”
3. “Stop when the trade-off ends.”
According to Laffer, when states look to overhaul tax codes, they need to understand that it takes a concerted bipartisan effort to eliminate complications. He added that tax reform should be considered an ongoing process and continuously reviewed to ensure that it is working as intended.
“[Tax reform] is not republican or democrat, it’s just simple economics. People respond to incentives,” he said.
“Everyone likes more money. I don’t care what your political affiliation is.” - Dr. Arthur Laffer
What’s the Plan for SC? Tax Policy Review Committee Chairman Rep. Tommy Pope (R-York) said that draft legislation is in the works for two reform plans to address income and sales taxes.
When it comes to sales taxes, since no legislation has been formally introduced yet, there is no way of knowing EXACTLY what will be included. However, talks continued Thursday afternoon to phase in the removal of exemptions and impose taxes on services based on North American Industry Classification System (NAICS) codes. Staffers told the committee that by removing certain exemptions and broadening the base with services, the sales tax rate could essentially be cut in half over time.
The draft committee plans could be available by next week. Stay tuned…
DUI-E Bill Goes Back to Committee Texting legislation (H.3355) also referred to as the DUI-E (Driving Under the Influence of an Electronic Device) was debated on the House floor this week. The bill is sponsored by Rep. Bill Taylor (R-Aiken) and it aims to strengthen distracted driving laws in South Carolina by increasing penalties for drivers who use their phones behind the wheel. Under the proposal, drivers would be fined $200 for using a cellphone or other electronic device in their hands. Drivers could talk on the phone with a hands-free device or use the GPS app on their phone or other electronic devices as long as they entered their destination before driving.
Legislators raised concerns on the floor as to how the bill would affect police and enforcement issues. Following these concerns being raised, the bill was committed to the House Judiciary Committee.
SCDOT Names Justin Powell New Deputy Secretary for Finance & Administration
Secretary of Transportation Christy Hall has selected Justin Powell to assume the duties of Deputy Secretary for Finance & Administration for the SCDOT. Powell has over 15 years of experience in the finance arena in both the government and private sectors.
Powell is currently serving as an Assistant County Administrator for Horry County where he has been managing the County’s Administration Division since May of 2015.
Hall pointed to Powell’s experience and accomplishments during his tenure in Horry County that made him an excellent choice for the SCDOT Leadership Team. “Mr. Powell has a proven track record of success, and I have every confidence that he will be able to make a positive difference here at the agency,” said Hall.
She also noted that Powell’s financial management has resulted in an upgrading of Horry County’s credit rating and that he has vast experience in disaster response and recovery, citing his support following Hurricanes, Joaquin, Matthew, and Florence.
Powell has previous experience serving as Chief Financial Officer for Dorchester County, a Budget Analyst for the City of Greenville, a private sector position with IBM Consulting Services and as a Budget Analyst for Fairfax County, Virginia.
A South Carolina native, he earned a Bachelor of Arts Degree in Government from Wofford College and received a Master of Public Administration degree from the University of North Carolina at Chapel Hill. Powell will begin his work at SCDOT on April 29, 2019.
JBRC Subcommittee to Meet Next Week A special subcommittee of the Joint Bond Review Committee (JBRC) is scheduled to meet next Wednesday, March 27 at 9:00 am to hear from the State Transportation Infrastructure Bank (STIB) and representatives from Charleston County.
JBRC Subcommittee Members:
Senator Thomas Alexander (R-Oconee) – Chairman
Senator Paul Campbell (R-Berkeley)
Rep. Gary Simrill (R-York)
Rep. Leon Stavrinakis (D-Charleston)
The subcommittee has been tasked with evaluating the I-526/Mark Clark Extension agreement prior to going before the JBRC for review.
New Details of Trump Budget Darken Highway Trust Fund Outlook By Dean Franks, senior vice president, congressional relations, ARTBA
The Trump administration March 18 released additional details about the president’s FY 2020 budget, including impacts on yearly Highway Trust Fund (HTF) balances and outlay projections. The news isn’t good for the HTF, which is likely to run out of money in 2021 without additional revenues. The budget addendum projects what would happen to the HTF if the full budget request were followed through 2029. Among the outcomes:
Spending authority for highway and transit programs given to states and localities would be frozen at FY 2020 levels through FY 2029, with no adjustments for inflation;
Reimbursements to states and localities for work completed to existing HTF revenues would be limited; and
Payments would be subject to massive delays – potentially up to three years – on work completed, totaling $146 billion through the end of FY 2029;
The administration’s budget is considered nothing more than a messaging document that is unlikely to be followed by Congress. It provides another stark reminder, however, of the need to address the HTF revenue situation this year. Otherwise, massive cuts or multi-year delays in payment for work completed would be the new normal.