You might not have noticed, given how much gas prices fluctuate from week to week and even day to day, but South Carolina’s gas tax went up another 2 cents a gallon two weeks ago. It was the third of six annual increases, approved in 2017, that are expected to eventually generate $600 million a year to pave over our potholes and repair our deteriorating bridges and smooth out dangerous curves and intersections to make driving in our state a little less trying, and dangerous.
You also might not have noticed that the state is spending this money to do what it was supposed to do. No, we can’t guarantee that will continue – there have already been efforts, thankfully unsuccessful, to divert some of the money from repairing existing roads to building new ones – and we need to remain vigilant to ensure it does. And no, the government doing what it’s supposed to do shouldn’t be something that we have to take note of, but given the efforts some tax opponents are making to convince people otherwise, we thought it was worth pointing out.
That effort to make people think the money is being diverted to other uses is made easier by the facts that 1) the $600-million-a-year figure is based on the full 12-cent increase, not the 2 cents extra that was collected for the first year, or the 4 cents collected for the second year, 2) the Transportation Department waited to bank some of the new revenue before it started awarding contracts, to avoid stop-and-start efforts, 3) the agency has to go through a competitive bidding process to award construction contracts (an essential step if you want to get the most work per dollar rather than just throwing money at legislators’ best friends), and that takes time, 4) the winning contractors have had a hard time finding enough qualified employees for the new work, and 5) most of us demand instant gratification and assume the worst when we don’t get it.
As Columbia’s State newspaper reported Monday, drivers have paid a total of about $198 million more for gas as a result of the 2017 law. That’s a lot less than most people assumed. And through the end of May, about $71 million worth of road and bridge projects had been completed – probably more than most people assumed. Another $100 million had been paid to contractors for work that is not yet complete. That’s 86 percent of the money collected, and last week the state Transportation Commission approved another $487 million worth of projects, which are scheduled to be put out to bid over the next 12 months.
The 2017 law wasn’t perfect. Rather than removing the sales tax exemption on gasoline, so the tax would be based on the cost of gas, the Legislature increased the per-gallon excise tax, and then refused to index that tax to inflation; that means the revenue won’t keep up with inflation as the price of gas increases. The law also was packaged with a bizarre collection of other tax cuts, exemptions and credits that reduced the revenue available for education and other state priorities, and made an even bigger mess of our Swiss-cheese tax system. And even when it’s fully phased in, the extra 12 cents per gallon won’t be enough to eliminate our 30-year backlog in road repair and maintenance costs.
But two years after its passage, it is beginning to make a noticeable improvement in our roads, and over time it will help make driving less dangerous, reduce the money we have to spend on road-induced car repairs and help support continued economic growth. And it’ll do all that while still maintaining one of the lowest gasoline taxes in the nation.