SC House Preps for Budget Week The House will begin floor debate on the FY19-20 state budget next week. On Thursday, the Ways & Means Committee held a briefing on the budget for members to provide an overview of the spending plan passed by the committee.
Ways and Means Chairman, Rep. Murrell Smith (R-Sumter) outlined the four key budget themes and noted that once the critical needs areas were addressed, the other obligations to fund state government quickly consume the remaining revenues.
South Carolina will see an additional $977 million ($497 recurring/$480 non-recurring) in surplus revenues. Those revenues will be spent across the following areas:
The $61 million windfall that is expected from the winning lottery ticket cannot be spent until the money is certified. Chairman Smith says the committee included provisions that would add the money to a tax relief trust fund to provide roughly $100 million in tax relief to South Carolinians. (Specifically, in the form of a $50 rebate to citizens with income tax liability.) Legislators will now have to wait and see if the money will make it into the FY19-20 budget.
Education & Workforce Development
2019 continues to be the year for education and funding for education is a primary theme of the budget. Revenues will be allocated to increase teacher salaries as well as fund scholarships and some training to address critical need areas and advance workforce development across the state.
SCDOT Funding & Provisos
The SCDOT received $4 million in non-recurring revenues for rest area improvements. (The agency requested $16 million.) SCDOT also requested the removal of two provisos included in last year’s budget. One deals with a bridge replacement in McCormick County that has since been completed, and the other allows SCDOT to utilize federal aid money to cover costs associated with water and sewer utility relocation.
Also, a proviso was added that allows SCDOT to fund the CTC increase (established by Act 40) with proceeds from the fuel tax increase. The proviso requires that the CTCs must use the money on repairs, maintenance, and improvements to the state highway system.
SCDMV Receives Revenues to Help with Administration of Road Funding Law
With passage of Act 40, SCDMV took on additional responsibilities that were previously handled by the SC Department of Revenue. The SCDMV will receive recurring revenues for administration of the new alternative vehicle fees as well as the road use fee on commercial motor vehicles implemented by the road funding bill.
Shehan Appointed to STIB The office of Senate President Harvey Peeler (R-Gaffney) announced earlier this week that David Shehan, President of Keystone Constructors in Gaffney, had been appointed to the State Infrastructure Bank (STIB) Board. Shehan is a Gaffney native and holds a bachelor’s degree in civil engineering and a Master of Construction Science and Management from Clemson University.
He replaces former Secretary of Commerce, Joe Taylor, who was appointed to the board by former Senate President Pro Tempore John Courson in 2012.
York County Officials Say Utilities are a Major Cost & Future Needs Should be Considered One of the major costs to keep highways and interchanges up to speed amid community growth involves the land beneath the pavement. Utilities often have to move pipes or cables already in the ground to make room for road changes.
“That is a massive cost to us,” York County Council chairman Michael Johnson said at the February Rock Hill-Fort Mill Area Transportation Study policy committee meeting.
“We as a group have collectively determined that we need to be more aggressive in ensuring that as we go out to purchase right-of-way or have plans for egress, whatever, that we are looking to the future and not having to redo something,” said Fort Mill Mayor Guynn Savage.
The right-of-way issue typically is a difference of feet to either side. But when it comes to utilities, those feet are critical.
Johnson points to Springfield Parkway in Fort Mill, which will have to be widened from two to five lanes as more people move to Fort Mill. Yet, utilities went in last year about 6 feet off the road.
“To me there is nothing more aggravating than, we’re going to dig up utilities that we just put into the ground 18 months ago, to expand the road probably in the next three to four years,” Johnson said. “There’s a disconnect, and somehow we’ve got to figure out how to make all of this work.”
Rice Applauds SCDOT for Submitting Grant Application for I-73 Earlier this week, Congressman Tom Rice (R-Dist. 7) released the following statement in support of SCDOT applying for a federal Infrastructure for Rebuilding America (INFRA) Grant to build I-73.
“I applaud the South Carolina Department of Transportation (SCDOT) for submitting an application for the Infrastructure for Rebuilding America (INFRA) Federal Grant program to receive funding for I-73. I led a letter to Secretary Chao with Senator Graham and Senator Scott in support of their application. The INFRA Grant program provides federal dollars for infrastructure projects that will achieve the Administration’s goal of driving the economy through infrastructure investment, especially in rural areas. I-73 is a perfect fit. It will traverse three of the poorest counties in South Carolina- Marion, Marlboro, and Dillon- providing unprecedented opportunity for those who have felt left behind. I am grateful that SCDOT recognizes the importance of I-73 to not only the Seventh District, but the entire state and I will keep working at every level until this road is built.”
Marsh Hired to Serve as Federal Liaison for SC Governor During a meeting with cabinet agencies this week, Governor Henry McMaster announced that South Carolina would reopen its Washington, D.C. office with the National Governors Association, an office that was closed in 2010 to save money during the recession.
More importantly, a familiar face has been hired to run this operation. Former SCFOR Vice President, Jordan Marsh, who most recently served as political director for McMaster’s 2018 election campaign, has been hired to run the DC-based office which will help to aid state agencies in the nation’s capital.
Governor McMaster said that reopening the office would help South Carolina remain competitive economically. “Don’t be shy, we’re paying for it,” McMaster told his cabinet agency directors. “We’re going to wear this thing out. There’s a lot going on up there.”
Congratulations to Jordan on the new position – we know he will continue to represent the office of the Governor and South Carolina well.
NCDOT Works to Continuously Improve, Tackle Growth SCFOR participated in an ARTBA Conference call this week that featured a presentation from NCDOT Secretary of Transportation Jim Trogdon. He provided an overview of improvements that have been made within the agency, and also outlined the many challenges associated with population growth.
According to Trogdon, fifty percent of the nation’s growth in the next few years will take place in four states: North Carolina, Florida, Georgia, and Texas. North Carolina is expected to see significant population growth in the Raleigh-Durham area as well as the Charlotte-Mecklenburg area.
Secretary Trogdon said states traditionally see things as “urban vs. rural,” but he finds that to be less accurate today. He says that states are now looking at areas as “growth vs. no growth” when it comes to addressing needs. This is something that South Carolina can relate to - with certain areas of our state seeing booming population growth and increased demands on infrastructure. Here's a look at some of the key highlights from his presentation.
Improving Program Delivery
When Trogdon was appointed to the NCDOT in 2017, he said that the agency needed to make improvements and he worked to improve program delivery. The following improvements were made:
• Delivery of EIS: Reduced from 10 years to 3 years.
• Environmental Assessments: Reduced from 7 years to 2 years.
• Categorical Exclusions: Reduced from 4 years to 1 year.
Secretary Trogdon touted the decentralization of projects and the increased use of external consultants for improving project delivery. He said that the state continues to look to improvements as population growth continues.
Social Media As an Engagement Tool
Secretary Trogdon emphasized that the internet and social media has helped with public comments/feedback as well as ensuring the agency can reach the public about specific projects. NCDOT utilizes geofencing, so anyone who travels through a defined project area on a given day will automatically see a web advertisement or prompt to learn more about the project.
NCDOT has implemented an HR pilot program which allows them to work with the private sector HR expertise to assess needs and implement changes. They are also working with private companies, universities, and technical colleges to recruit not just the students who are studying a transportation-specific area, but even individuals who may be majoring in business or finance. This, all in an effort to attract more people to transportation/construction-related jobs.
Addressing All Forms of Infrastructure
North Carolina has a significant gap in broadband availability, and the inclusion of broadband in projects is a way that the state is looking to connect rural parts of the state with additional resources. Trogdon says he also sees this as a potential revenue source for the future. Like many states, North Carolina is beginning to assess sustainable revenues for future infrastructure needs as the state is heavily reliant on fuel taxes and the federal government. Trogdon said that the state continues to look to ways to fund a growing list of infrastructure needs that extend beyond roads and bridges.
Trogdon closed his remarks by saying that over the next five years, the state is poised to see more changes than they have seen in the last 50 years.
Michigan Governor Seeks Fuel Tax Increase to “Fix the Damn Roads” Michigan Governor Gretchen Whitmer (D) on March 5 proposed a 45 cent-per-gallon fuel tax increase as part of her first executive budget and an attempt to fulfill her campaign promise to “fix the damn roads.”
Beginning Oct. 1, the tax increase would be phased in by 15 cent increments in October, April and October 2020, raising the current rate of 26.3 cents per gallon to 71.3 cents per gallon, or the highest in the nation. The increase is expected to generate an additional $2.5 billion annually, with a greater portion of the revenue allocated to roads that support the most traffic.
Her proposal is not expected to be well received by the Republican-led legislature, which narrowly passed a 7.3 cents-per-gallon gas tax increase in 2015. State Senate Majority Leader Mike Shirkey (R) has recognized Michigan’s transportation needs but said that increasing gas taxes is not a long-term solution due to rising fuel efficiency and fuel alternatives.
The opposition came quick! Since Gov. Whitmer's announcement, thousands of people have signed a petition against her proposal. The goal of the petition was 25,000 signatures and as of Thursday morning, 17,000 people had signed on.