Dana Beach: SC’s Transportation Debt Crisis
By Dana Beach || S.C. Department of Transportation was forced to acknowledge last week that it couldn’t pay its contractors. Gov. Nikki Haley had to ask the Federal Highway Administration for “accelerated payments” to make up the shortfall.
What went wrong?
The agency’s official explanation is “a combination of the demands on the agency during the peak summer construction months and the economic drag on both state and federal gasoline taxes.” The answer is far simpler: cronyism and back-room deal-making.
Just two highway projects illustrate the agency’s financial crisis.
Exhibit A is I-73, the proposed $2.4 billion interstate to Myrtle Beach. Since I-73 was authorized, our congressional delegation has secured $100 million in federal earmarks for the road. However, the Transportation Department’s own environmental impact statement concludes that economic and transportation benefits from the project will be minimal. Improving existing roads would accomplish the same goal for roughly a tenth the price.
In spite of this, and surely knowing the department’s dire financial condition, the Transportation Commission, chaired by Myrtle Beach businessman Danny Issac, voted last month to borrow $344 million, much of it for an interchange for I-73 — just the interchange — without having the faintest idea of when or from where the funds will come to build the rest of the road. Alaska has nothing on the South Carolina’s interchange to nowhere.
The problems with I-73 have been crystal clear for years. But all our congressmen, governor and local and state politicians have blindly pledged their allegiance to this boondoggle. Only one official, Transportation Commissioner Sarah Nuckles from Rock Hill, spoke against the decision to obligate 85 percent of the state’s borrowing capacity to this road and a handful of pet projects in other commissioners’ districts.
Now let’s turn to Exhibit B, I-526. The other major source of funding for transportation projects is the State Transportation Infrastructure Bank. The extension of I-526 to Johns Island does not rank as a priority for the state, or even for the Charleston metro region. Yet the Infrastructure Bank has promised to borrow $420 million for I-526 — every dime of its borrowing capacity through 2018.
Because of this commitment, the Infrastructure Bank cannot finance anything else — improvements to I-85, new roads for Boeing, freight rail to the new port terminal — for almost a decade.
When Charleston County Council voted this year to terminate the project, freeing a half billion dollars, it should have been a cause for celebration. Instead, Senate President Pro Tem Glenn McConnell and House Speaker Bobby Harrell directed their Infrastructure Bank appointees to force the county to reverse the vote by threatening financial retaliation.
These two projects, representing almost $3 billion of taxpayer funds, strongly support the idea that problems at the Transportation Department have less to do with “peak summer construction months” or “economic drag” than with a system of governance that is corrupt at its core, where powerful politicians and commissioners impose massive debts on taxpayers for wasteful pet projects.
The repair job is clear. First, the Infrastructure Bank must be eliminated and its functions shifted to the Transportation Department; South Carolina does not need two transportation commissions. Second, the department must be forced to comply with the 2006 law that requires it to rank projects based on objective criteria and direct funding by order of rank; the commission has consistently flouted this law. Third, also consistent with the law, the agency must focus its resources on maintaining the existing roads instead of adding new, especially unnecessary, capacity. Finally, Secretary Robert St. Onge and the commission should be replaced with people who, like Commissioner Nuckles, will be true stewards of taxpayer resources.
There can be no disagreement about the urgency for fundamental reform at this agency that controls one of the largest budgets in the state. If we don’t insist on it, we’ll have only ourselves to blame the next time we ask, “What went wrong?”
AUTHOR’S NOTE: Dana Beach is executive director of the Coastal Conservation League. Reach him at email@example.com.