COLOMBIA – The state Department of Transportation is using about $ 140 million in federal aid COVID-19 to pay off debt and free up money for more interstate projects.
It is unclear which projects will benefit, although one may be the expansion of Interstate 526.
Erasing the agency’s loan balances “will position us to handle some of the big projects on the horizon,” such as expanding I-526 and reworking its interchange with Interstate 26 in North Charleston, which is priced in billions of dollars, said Justin Powell, deputy finance secretary at DOT.
The unanimous vote of the DOT board on March 18 authorized Secretary Christy Hall to begin the agency’s debt payment process years ahead of schedule. She will return to the council with recommendations on how to redirect the money that would otherwise make the loan payment.
The reward is estimated to be $ 13 million annually that can go towards local highway projects.
“Instead of paying bankers, we can pay construction workers to keep working,” said Powell.
The money comes from the $ 166 million that the spending package approved by Congress in December sent to South Carolina to offset losses in gas tax collection due to fewer people driving and fueling in the midst of the pandemic.
That was South Carolina’s $ 9.8 billion portion of the COVID-19 relief sent to state DOTs across the country, with much more flexibility than financing normal federal highways and requiring no local counterpart.
Unlike other states, South Carolina’s DOT did not need this federal aid to fill a budget gap, in part because of increased vehicle sales amid the pandemic. And when people buy a vehicle in South Carolina, sales taxes, up to a maximum of $ 500, go to the DOT.
“We had a sudden increase in people buying cars – lots of cars,” Hall told the board.
While this still left a $ 40 million gap last year due to declining tax revenue from gas, the agency made internal cuts to cover this without needing to cut or delay any road or bridge design, Hall said.
This allows DOT to “leverage unanticipated and unique (federal) money in long-term gains,” she said.
Of the $ 166 million allocated to South Carolina, DOT may have $ 149.4 million, while $ 16.6 million is divided between the six largest local transportation agencies in the state.
Those in the Charleston and Columbia areas receive the biggest chunks, with $ 4.9 million each. It is up to these local agencies how to spend their quota, but DOT officials are recommending that they use it to pay their own debts.
The approximately $ 7 million that DOT will have left over after paying debts until 1996 will go to interstate projects, while the $ 13 million or more released annually can go to local highway widening projects to ease congestion. The exact figures have yet to be determined, Powell said.
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