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Muh Roads! April 29, 2015

Posted by F. McCollum in Welcome!.
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If you spend any time in libertarian circles you’ll hear someone sarcastically comment “Muh Roads!” in response to the implication that only the government can efficiently deploy capital to projects such as roads. The York county area is no stranger to complaints about funds wasted on seemingly useless road projects, such as crosswalks that end in hedgerows, while road issues with seemingly simple solutions are ignored for years upon years (I’m looking at you left-turn lane onto Zoar Road from Highway 160).

One example, and there are many, is the Hubert Graham Way extension project. This extension adds a half mile connection from peninsular Tega Cay to the annexed Wal-Mart area of Tega Cay. The extension’s stated purpose is to ease congestion on nearby South Carolina Highway 160, which actually has traffic problems that are primarily caused by the lack of a left turn lane onto Zoar Road and the no-turn-on-red traffic lights installed in recent years at Gold Hill and Highway 160. The actual causes of congestion have very simple and inexpensive solutions. The extension will be 0.49 miles long and save drivers less than 1 mile from the current route to Walmart. It will also add at least one traffic light to Gold Hill Road, which generally increase congestion rather than decreasing it.

The extension is a study in government inefficiency. If you look at a topographical map of Tega Cay, the highest lines represent 710 feet Above Mean Sea Level (AMSL), and according to Duke Energy, Lake Wylie is at 596.4 feet AMSL at full pond – so there is a 114 foot maximum variation in the immediate area. The proposed path of the extension starts at one of the highest points in the area, just above 700’, and travels through a ravine that is reported at just below 600’, then it comes back up to 650’ before re-connected to Gold Hill Road; we’ll round it off to a 100’ variation in elevation, just shy of the citywide maximum elevation change. If you were able to start with a blank slate, and picked the absolute worst-place in our area geographically to be build a road this would be it. The road was initially approved at a cost of $1.5 million in 2003, and in 2015, twelve years later, it still has not even been started but the price estimate now exceeds $7.4 million. For those keeping track, that is a rate of $15 million per mile. The cost to build the entire 47,856 mile interstate system in the United States, including tunnels, 4+ lanes, bridges, and overpasses, adjusted for inflation to 2006 dollars worked out to $8.8mm per mile, or just over half the cost of this two lane extension.

If you look at it another way, the 2013-2014 total budget for Tega Cay works out to $6.5 million dollars – this single half mile of road will cost more than the city’s total annual operating budget. As we went to press, citizens were headed to the polls to vote on a new school bond. Many opponents were upset that the average cost would be approximately $274 per household on their annual property tax bill, but there has been virtually no dissent from citizens over this half mile extension which will cost each household in Tega Cay approximately $2,600.

One might ask, who is making this seemingly poor decision? Generally it is not someone who can be held responsible. The SC DOT is overseen by the DOT Commission, an 8 member board of appointees put in place by the Governor or one of the seven legislative delegations representing the seven federal Congressional districts. In other words, they are not accountable to the voters. One of the legislative bodies that oversees the approval process of these committee members is the Joint Transportation Review Committee, a 10 member committee that includes Senate President Pro Tempore Hugh Leatherman. Senator Leatherman is the former president and current stockholder of Florence Concrete, a private company that receives substantial money from the DOT for roadwork. This obvious conflict of interest surprised me when doing research for this article, but it is apparently allowed. The DOT has an annual budget of $1.5 billion for the 2014-2015 fiscal year; $459 million is from state gasoline taxes (approximately $255 per year, per household). Federal funds also feed into the DOT budget, but these are funded from local tax dollars that have been shipped to Washington DC, and are only sent back to fund our roads as matching funds and only for expansion projects or new roads (not maintenance). The remaining budget comes from the State Transportation Infrastructure Bank (STIB).

The next powerhouse in South Carolina road politics is the STIB, which is similarly run by appointees, who are appointed by 7 elected officials representing only a small portion of SC voters. STIB only funds new road projects or expansions, and never maintenance. As of January 2013 (more recent data is not available) 35 of South Carolinas 46 total counties had never received any funding from the STIB since its creation. Over a third of the STIB money has all gone to a single county: Charleston. However, STIB has over $2 billion in debt outstanding, and all taxpayers in the state are paying down that debt. To put that number in perspective, South Carolina faced a $1.3 billion liability for ALL outstanding general obligation bonds in 2014.

The problem is structural. There is no accountability in the system described above. It is irrefutable that some counties benefit greatly while others suffer greatly, due to lack of proper oversight. Unsurprisingly, major road projects currently underway, happen to be in districts where these elected representatives live. Our area has no elected representative on either of these boards. When we see Tega Cay officials re-doing crosswalks that end in hedgerows 3 times in just 10 years, and debating what might be the most expensive ½ mile extension project in the state for over 12 years with no visible progress, then anyone paying attention knows the problem is on the spending side not the revenue side.

One local representative, Michael Johnson, has proposed a solution to SCDOT that will run a pilot program in York County to build roads “faster, smarter, and cheaper”. He notes the current timeline for a new road project, on average, is 7 years from the day that funding is appropriated to the day construction is complete, and the new timeline is expected to be reduced to 4-5 years. That seems like a good start, but road projects should be measured in months, not years; there are still larger barriers that need to be torn down. When a major interstate overpass in Birmingham AL collapsed in a horrible tanker-truck accident in 2002, it was repaired in 37 days. These are 6 and 8 lane stretches of elevated interstate, and the loss of this critical junction substantially impacted private commerce, so the solution was very efficient and very fast.

Representative Raye Felder supports a new state law to allow counties to raise their own gasoline tax, with the goal of keeping the money local. However, as we’ve seen above, the problem is not a lack of revenue. The problem is structural in nature and also the result of poor management of road expenditures. Any movement towards keeping our tax dollars in our local economy is admirable, but this proposal keeps the tax dollars flowing out of our community and increases the total tax burden.

Governor Haley proposed a “tax swap” where gasoline taxes would be increased by 10 cents per gallon, and income taxes would be lowered. While seemingly not raising taxes on its face, swapping tax dollars from one bucket to another bucket avoids the same root problem of lack of accountability despite a track record of unfair and poor decision making.

While solutions may vary, libertarians, conservatives, and liberals should all be able to agree that the current road funding system is broken, and looking for ways to pour more revenues into a broken system is not the right approach.

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