SC road projects may dip in numbers until feds fix funding issues
Source: Post and Courier
July 8, 2014
COLUMBIA - Construction projects on federal roads in South Carolina may slow to a crawl this fall unless Congress prevents the Highway Trust Fund from going broke.
South Carolina, along with the rest of the country, has been anxiously waiting for Congress to keep federal transportation aid flowing to states for another four years. If it doesn't happen by Aug. 1, South Carolina will have to slow down or cut back on new projects scheduled for the fall, said Jim Warren, SCDOT deputy secretary for finance and procurement.
The feds have warned that if Congress doesn't resolve the cash flow issue, they'll have to modify their reimbursement procedures. That could mean delays in paying back states for the construction they have underway for federal projects. Warren says, however, that SCDOT has enough cash in its coffers to pay for projects that are underway.
"As of right now, I see no reason why we won't be paying our vendors on time," Warren said. "If there's a long-term obstruction, we'll have to study it much harder and make whatever adjustments necessary to make sure our suppliers and contractors are paid on a timely basis."
That could mean stopping any projects from even starting in the fall. It could also mean the temporary halt of state-level projects to funnel the cash to cover those federal projects that have already started. That's something that alarms Sens. Larry Grooms, R-Charleston, and Ray Cleary, R- Murrells Inlet.
"Once the Federal Highway Trust Fund is at zero balance, they will not be able to reimburse the states for federally authorized work," Grooms said. "It'll hurt our state more than most other states because we're so heavily dependent on the Federal Highway Trust Fund."
Cleary called the potential halt in cash an "extreme crisis" in South Carolina that could have been prevented.
"Quite honestly, when they talk about the sky falling, most people are exaggerating," Cleary said. "In this particular case, I don't think Sen. Grooms is exaggerating."
Because South Carolina lawmakers and leaders have not addressed how to fund the state's roads properly, there's not enough state-level cash to fall back on, Clearly said. Whereas some states pay out of their pockets for projects and turn to the federal government on a biannual or annual basis for reimbursement, South Carolina does it on a bi-weekly basis.
"We rely on the federal government to help us maintain our roads," Cleary said. "And we're paying the piper now."
But the federal potential impact on a state level did not creep up on anyone. Grooms has been pushing for SCDOT to scale back on its bidding for projects since January. And Eric Dickey, chairman of South Carolina Alliance to Fix Our Roads, said anyone in the highway industry has known about the problem since earlier this year.
"We're in big time trouble come Aug. 1," Dickey said. "I don't think projects will stop immediately, but they'll slow down dramatically."
U.S. Transportation Secretary Anthony Foxx went on an eight-state bus tour in the spring in an effort to get public support to pressure Congress into approving legislation that would keep cash flowing to the states. Foxx was promoting President Barack Obama's four-year, $302 billion plan to shore up the trust fund with savings from proposed changes to corporate tax laws.
The interstate highway program, launched in 1956, has been funded primarily through federal gas and diesel taxes under the principle that users of the system should pay for its construction and maintenance. But it's been clear for nearly a decade that fuel taxes haven't been keeping pace with transportation needs as the nation's population grows and its infrastructure ages.
Another issue is that the highway bill itself expires on Sept. 30. The last time there were any concerns of federal highway money flow drying up, Congress took steps early on. But the program has always been notorious for having continuing resolutions, Warren said.
SCDOT is planning on pursuing its projects as it usually does - for now.
"As of today, we're conducting business as normal," Warren said. "Come the middle of August that could change."
The Associated Press contributed to this report. Reach Cynthia Roldan at 708-5891.