Gas tax debate full of fuzzy math
For the South Carolina Department of Transportation and advocates of a gas tax hike including Gov. Nikki Haley, numbers are useful whether they tell the full story, just part of it, or have no relationship with reality at all. But do the most-commonly used numbers stand up to a basic fact-check?
No one believes our roads in anything other than deplorable condition, with half of our secondary roads rated in “poor” condition. But getting to the bottom of how much will it realistically cost to maintain and repair them adequately is another question. What’s certain is that, despite evidence suggesting the numbers the SCDOT uses to bolster its case are inflated at best, compromised at worst, the agency isn’t budging on them.
‘$1.47B ANNUALLY’
This number, $1.47 billion, is the most common figure cited by the Department of Transportation’s Multimodal Plan as the total cost of maintaining and repairing our state’s crumbling roads.
Time and again it appears, the result of a collaboration with DOT and the Department of Commerce and the State Ports Authority, along with other federal and commercial stakeholders, to represent a long-term, “all-in” number. By its very creation, then, it’s a number that its creators have an incentive to make as large as possible – not as small, or as realistic, as possible.
“It’s a transportation contractor’s wish list,” Sen. Tom Davis, R-Beaufort, says of the $1.47 billion number. “(The figure) has been comprehensively discredited in numerous analyses.”
Davis confirms that in private conversations with DOT executives, they tell him that the number does not reflect the figure needed for existing road or bridge network repair, only that that component is a large piece of the $1.47 billion DOT says it needs to do the job.
“In my private communications with (DOT interim director) Christy Hall, she acknowledged that the $1.47 billion number wasn’t the amount for just maintaining and repairing the ‘existing’ road and bridge network, nor was it even intended to reflect that,” Davis told The Nerve Tuesday.
Getting DOT to admit that publicly, however, is another story.
“The $1.47 billion is the number that’s used in SCDOT’s Multimodal Plan,” writes SCDOT public information officer Pete Poore. “It’s still accurate.”
Critics contend the figure is akin to going into a repair shop and asking for a quote to get a car on the road again and getting a price for a full restoration. Independent research has shown the necessary figure as closer to $550 million.
What’s more, the group who prepared DOT’s Multimodal Transportation Plan, CDM Smith, has received more than $13 million in state payments from DOT and the State Transportation Infrastructure Bank since 2012.
When pressed to specify whether the $1.47 billion put forward by CDM Smith and DOT is solely for existing roads and bridges and not anything more, Poore refused to clarify.
“SCDOT will have nothing more to say on this issue until January 20,” Poore said in an emailed response.
On Jan. 20, Interim Secretary Christy Hall will address the Senate Transportation Committee to deliver her “State of the SCDOT.”
Poore said at that meeting, “(Hall) will discuss that number and needs further.”
Other numbers aren’t quite as onerous but also bear scrutiny as they attempt to (mis)inform the debate.
‘ONE-THIRD’ OF GAS TEX REVENUES FROM OUT OF STATE
This figure is also trotted out of the paddock when needed to run a lap or two in favor of a gas-tax hike, because after all, any tax is more palatable if you can say you’re charging non-South Carolinians a huge swath of it.
A closer look at who came up with that percentage, however, spells trouble.
The number is part of a DOT report produced by the Transportation Infrastructure Task Force, a group appointed by the legislatively controlled DOT Commissioners and consisting of, among others, the head of the S.C. Pavement Association and executives from a trucking company (Thompson Trucking Co.) and large construction firm with DOT contracts (Sloan Construction) that describes itself on its website as “a leader in heavy highway construction in the Carolinas”.
4.3% ANNUAL GROWTH OVER 10 YEARS
Let the good times roll, if this math coming from Gov. Nikki Haley’s office is to be believed. Haley’s tax-swap proposal would raise the gas tax in exchange for lowering the income tax. While the proposal has a number of supporters within the General Assembly, it relies on economic projections that are comically out-of-synch with the state’s actual growth.
For Haley’s numbers to work – her gas tax would increase over three years while income taxes would decrease over 10 – South Carolina’s economy would have to increase by 4.3 percent each year. For comparison, from 2011-2014 the United States as a whole averaged 2.1 percent, with a high of 2.4 and low of 1.6 percent. From 2004 to 2014 – the previous 10 years – South Carolina’s real GDP growth averaged 1.1 percent from 2004 to 2014. In the most recent University of South Carolina economic study, the predicted growth rate for 2015 by its economists was 1.8 percent.
Reach Aiken at 803-254-4411. Email him at ron@thenerve.org. Follow him on Twitter @RonAiken or @TheNerveSC.