Even if the Legislature agrees on a long-term funding plan for the state’s crumbling roads and bridges, the construction industry will need time ramp up its operations to meet demand.
During the Great Recession, the industry was hit hard by cutbacks in projects, and for the past few years it has suffered an exodus of experienced workers, S.C. Transportation Secretary Christy Hall said.
So, even if the Legislature passes a bill that could pump up to $600 million annually into the state’s highway budget, it will take a few years for contractors to have enough equipment and workers, Hall said.
“What we want to avoid would be a situation where money was collected from the taxpayer and basically, we weren’t able to efficiently and effectively spend those dollars,” said Hall, who has suggested to legislators that funding should be phased in over time.
Hall said her agency has been crunching data and talking to industry partners over the past three or four months about what work the state will need to have done in the next 12 to 36 months, so that they can make plans for equipment purchases and hiring personnel.
The state Transportation Department has laid out 10-year plans to specifically discuss large capital projects, such as building a new interstate interchange, adding lanes, or replacing bridges, Hall said. The planning includes when and where projects will be built, as well as how the projects will be put up for bid.
Advance planning is necessary because of the enormous cost of building roads and bridges. According to the American Road & Transportation Builders Association, the cost of constructing a new 6-lane interstate highway is about $7 million per mile in rural areas and at least $11 million per mile in urban areas. To expand an interstate to six lanes from four runs around $4 million per mile, according to the trade group’s website.
“This is a problem that has been decades in the making and our industry has been relatively stagnant for a very long time,” Hall said.
Another challenge facing the state in lining up contractors is that South Carolina’s neighbors — North Carolina and Georgia — have recently passed long-term funding programs, creating competition for contractors, equipment and workforce, said House Majority Leader Gary Simrill, R-Rock Hill.
“A lot of paving contractors we need are in other states that are putting money into their DOTs,” Simrill said.
A bill has been introduced in the House that would increase motor fuel user fees by 10 cents a gallon. The tax would be increased 2 cents per year over five years and ultimately add about $600 million annually.
By increasing the state fuels tax, which is the second-lowest in the nation at 16.75 cents per gallon, some of the costs of fixing roads and bridges would be shifted to out-of-state drivers and truckers who stop and buy fuel in South Carolina. Officials estimate that out-of-state drivers account for about one-third of miles traveled annually on S.C. roads.
The bill also would increase the sales tax cap on automobile purchases at $500 per vehicle, up from $300; charge a $60 fee for hybrid vehicles and a $120 fee for electric vehicles; and, require newcomers to South Carolina to pay a $250 fee to register their cars.
“South Carolinians have demanded state government fix our dangerous roads,” House Speaker Jay Lucas, R-Hartsville, said in a statement. “Not only is this issue directly tied to the safety of our citizens, it also poses the greatest threat to job creation and economic growth in South Carolina.”
This story originally appeared in the Feb. 13, 2017, print edition of the Columbia Regional Business Report.