South Carolina raised more money from its ineffective increase in gas taxes than projects to finance with the money, according to data collected over the first three and a half years of this controversial and regressive tax.
As of December 31, 2020, the total amount of revenue collected under this 2017 law exceeded the cost of “all road and bridge projects” identified by the SC Department of Transportation (SCDOT), according to a report by Rick Brundrett of O (Columbia, SC) Nerve.
On July 1, 2020, the fourth phase of the tax increase came into effect – with tax increases per gallon of 22.75 cents for 24.75 cents.
This number will eventually rise to 28.75 cents per gallon – an increase of 71.6 percent above its previous level. Altogether, the tax increase was designed to deprive taxpayers of $ 1.8 billion over the first five years of implementation (we are currently in the fourth year) and around $ 600 million every year thereafter – although it appears to be exceeding those estimates.
According to data collected by Brundrett, deposits (ie, money collected from taxpayers) during the first 42 months of implementing the tax increase totaled $ 1.65 billion. However, SCDOT has identified $ 1.61 billion project “commitments” related to these revenues.
In other words, not only is the tax increase causing more problems than expected – it is exceeding the existing “need”.
Certainly, every penny of it $ 1.61 billion it was spent “fixing our roads”, right?
Wrong …
“(SCDOT) continues to sit in a huge reserve with the proceeds from the gas tax hike,” noted Brundrett.
In fact, the infrastructure fund created by the increase in the gas tax had a cash balance of $ 722.4 million on December 31st – or a colossal 44 percent of gas tax revenues collected in the last three and a half years.
“By passing the gasoline tax increase law, which increased the state gasoline tax … lawmakers promised that the money would be used to repair deteriorating state roads and bridges,” noted Brundrett.
Again … This did not happened.
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Part of the problem? According to Brundrett, powerful finance president of the SC Senate Hugh Leatherman created a special panel controlled by legislation that “channeled several billion dollars to major construction projects in selected counties”.
There is also growing concern that the state is using gas tax revenues to pay debts related to other infrastructure projects.
The SC Policy Council – The nerveThe parent organization – reported years ago that the state gas tax law was drafted in order to divert revenue from road maintenance projects that lawmakers proclaimed in approving the project.
“The law changes language – and dollars – in a way that is deeply complicated,” warned the SC Policy Council four years ago. “These complicated maneuvers, given the history of the legislature in this area, signal problems, even beyond the impact of the tax increase.”
This news outlet has no problems with gas tax revenues that will finance necessary infrastructure improvements – including a decades-long fix for the interstate system around the state capital of Columbia, SC. tax hikes in 2017 SCDOT was receiving huge increases in new recurring financing – which the agency began to blow in exchanges to nowhere, unnecessary expensive projects and all kinds of political filth.
Before the approval of the gas tax increase in 2017, SCDOT was receiving huge increases in new recurring financing – which the agency started to blow in exchanges to nowhere, unnecessary expensive projects and all kinds of political filth.
In addition, a year before the gasoline tax was passed, lawmakers passed a large (and constitutionally dubious) $ 2.2 billion loan account.
These spending increases continued, although SCDOT completed the last fiscal year with more than $ 1 billion in its reserve accounts (and although it has distributed huge salary increases to its inflated bureaucracy).
SCDOT received a great $ 2.6 billion in the state budget for the previous fiscal year – which ended on June 30. This represented a $ 191 million (or 8 percent) increase – a level of funding that will be sustained during the current fiscal year as legislators try to get a sense of the long-term fiscal impact of the coronavirus pandemic.
In addition, as we reported last fall, the Transport Infrastructure Bank SC (SCTIB) has at least $ 650 million could dedicate immediately long-awaited interstate modernization – freeing up SCDOT resources to focus on maintenance and resurfacing projects.
-FITSNews
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