Wednesday, November 19, 2014

South Carolina: Heading Down The Wrong Road (Updated 2/21/17)

This article came out on 11/19/14 just post-election in South Carolina, and it looks like so far the citizens of South Carolina are likely to lose their secondary state road system if realistic steps are not taken to properly fund the roads they have.  Bad ideas abounding, devolution is definitely in the talks.  The last proposal championed by State Rep. Gary Simrill included the transfer of 18,000 miles of secondary roads dropping the ratio from the current 63% under state control to 35%.  While still an ideal ratio for farm-to-market roads, this represents an unfunded mandate for mostly rural counties to assume responsibility for a whopping 28% of the state's roads.  Who is to say that won't go further?  At present, South Carolina's state primary system only makes up a mere 15% of the highway system in the state while SCDOT is in charge of 63% of the road system.  If the secondary system is completely eliminated, it most certainly means that counties will be on the hook for not just local streets but also major county roads including federal-aid routes.  At the 15% ratio, SCDOT is only in charge of a portion of the state's federal aid road network.  Even if a portion of the gas tax is transferred to a local level, South Carolina counties will not be financially prepared to take on over 30,000 miles of roadways formerly owned and maintained by the state.  The answer is only partially raising more money, because the system as it is structured is not efficient.  At the very least, devolution should come with a plan to allow the counties and cities to contract with the state or the state legislature should mandate cooperative agreements based on planning regions to assure that the former secondary state roads do not decline in maintenance standards just to make the pavement smoother.


South Carolina roads need money and repairs, but full-scale devolution of the secondary system to counties is the wrong way to do it.  Even with the subpar condition of the road in this photo, note the excellent condition of the traffic signs.  This road is one of between 18,000 and 30,000 miles of secondary roads in the state in danger of being turned to local control.  (Image from Google Street View).

South Carolina as a whole has one of the best-constructed road systems in the country.  Unlike other states, the state required counties to bring roads to state standards before transferring to the secondary system for maintenance.  This is how the roads ended up with such a peculiar ratio with 1/3 remaining local.  It was a farm-to-market system that pretty much grew without limits until a mileage cap was put in place in 1993.  This means that literally 65% of the roads in the state meet nominal state standards meaning that reconstruction costs per mile are still less than what it would be in a state that took a "rustic" approach like what is typical in Virginia, West Virginia and Tennessee.

If full-scale devolution is the plan there will likely be a one-time repair of the secondary state roads where basically the state will repave the road then turn it immediately to the county or city, but then what?  The individual counties will not exactly be flush with case to maintain the thousands of traffic signs, thousands of miles of road striping and repair the thousands of guardrails.  The unfortunate thing is that SCDOT always did an excellent job maintaining those roads before the money ran out.  There was never anything wrong with the state maintaining these roads, and it worked perfectly until the legislature refused to raise gas or sales taxes to adequate levels to continue to fund these roads.  The problem instead that neither the gas tax was indexed to inflation nor were sales taxes increased to adequate levels to fund it.  Had the gas tax been indexed to inflation, the rate today would be around 35 cents/gallon.  Compare this to Georgia where the state had a lower gas tax, but the gas tax is indexed to inflation in addition to 3-4 cents of sales taxes applied to that total.  Currently, Georgia increased their gas taxes to 26 cents per gallon (net rate is 29 cents per gallon) yet gas prices are not dramatically higher.  Despite Georgia's higher gas tax, safety improvements are much more poorly maintained in Georgia, and the answer is because the responsibility is just too fragmented.

South Carolina has also always done an excellent job with safety improvements on their secondary state roads.  The counties and cities?  Very hit and miss.  On county roads, warning signs are very sporadic and maintenance is less frequent.  Will the counties pick up the slack and maintain the traffic signs, pavement markings and guardrails to the same level as SCDOT did?  Probably not.  Rest assured that only about five counties in the state will even have the resources to create a proper traffic operations unit within the counties, and at present only Greenville County looks to have standards comparable to the state.  The counties will also be on the hook for raising local taxes to pick up the slack.  On the table will likely be more sales taxes and definitely higher property taxes.  Otherwise, the quality of these roads will probably not improve much declining in many other areas.  Why do these roads have to go to the counties?  The refusal to raise revenues to adequate levels is the only excuse being given.  While cooperatives seem like good ideas, there is no reason to devolve these roads to the counties.  Raise the taxes to a proper 30-35 cents per gallon or raise sales taxes to knock off 5-10 cents per gallon including an internet sales tax and the honey jar of funds will again flow.  While corruption does exist in the agency, that is not necessarily a justification to transfer roads to a local level.  It is like correlating passing on a double yellow line to speeding.  

DEVOLUTION ALTERNATIVES

There are a number of solutions presented in "State and Local Road Reform" that are better than just full-scale devolution.  These new funding and structural options would be most successfully done through devolution processes in lieu of organizing established local agencies.  Some that would be uniquely successful in South Carolina include:


  1. JOINT OWNERSHIP OF SECONDARY ROADS: Retain state maintenance and ownership of secondary system, but transfer construction funding to the counties and cities.  The South Carolina Association of Counties (SCAC) supports this option.
  2. DEVELOP REGIONAL/STATEWIDE MAINTENANCE COOPERATIVE: Develop statewide or regional cooperatives that handle maintenance on behalf of local agencies operating independent of SCDOT.  This would mean that county road routine maintenance would be abolished, but construction funding would still transfer to the local level.  Maintenance would instead be handled by either an interlocal statewide cooperative or cooperatives based on the state's planning regions per the Regional Roads Plan discussed on this blog. 
  3. TRAFFIC CONTROL COOPERATIVE (INTERLOCAL/SCDOT): Transfer the secondary roads themselves to the counties and cities, but have either SCDOT or a statewide traffic operations cooperative retain authority to supervise and maintain traffic control: this would also mean that local agencies would no longer maintain traffic control directly but would otherwise gain full authority to both construct and maintain roads.
  4. SCDOT MAINTENANCE CONTRACTS: Permit all counties and cities to contract part or all routine maintenance of their own roads with SCDOT at their own expense.  This means that any county using their own funding could transfer a portion or all of their local responsibility to SCDOT without requiring any additional state funding making SCDOT a cooperative for local agencies.  Note that this option is not as stable long-term as other options and may be viewed as a "stepping stone to full devolution".  If so, options 1-3 are better solutions.  However, SCDOT could use this method as a means to transition secondary roads, county roads and city streets over to an interagency cooperative system.

It is hoped that if there is any devolution effort that it primarily involves only the most local of roadways.  Preferably at least 35%-40% of South Carolina's road system per Rep. Simrill's plan should remain under state control, but that ratio should be closer to 50% (a reduction of approximately 8,000 miles).  Doing this leaves not only at least part of the secondary system intact, but it also keeps most or all of the federal eligible roads under state control as well as a few local connecting roads.   At present, the vast majority of federal-aid roads are under the jurisdiction of SCDOT, but a few are currently under local control.  However, in any devolution strategy options from the list above should be applied to both the roads transferred to the counties/cities and to existing county/municipal roads.

RATIONAL RATIONING

It is agreed that small residential roads are probably not well-suited for state control under the system as it is designed, but even then the ratio that would need to remain under state control would still remain close to 50%.  The problem is, a partial secondary system isn't always laid out based on need.  With politics as a factor, some counties will be given a much larger share of the burden and roads that are on-system vs. off-system may or not actually be important.  In other words, roads under state control under a partial secondary state road system like South Carolina has should have some actual useful purpose and actually connect to or provide access to something.  Also, instead of a mileage cap like what exists today, a reduced secondary system should be replaced with a ratio cap instead of a mileage cap so that counties can feel safe transferring new roads and better roads to the system without feeling like they will be penalized for doing so.  This means that ratio caps should be set in the established range (say 35%) with that ratio based on the mileage of state-owned roads divided by the total road system mileage for the state (state, county, municipal).  A ratio cap allows for slow growth of the highway system based on growth of the total road system without exceeding available funds.

If the secondary system is simply reduced, the criteria should be based on something besides federal-aid status or politics.  A set criteria is needed to rationalize the responsibility based on a number of criteria.  This table shows a possible set of criteria that could be used to determine if a road should remain on the state road system or fall under local control.  Of course, this criteria would be based on roads within a set ratio instead of used as an excuse to downsize.  Under this plan, minor collector roads currently under control of the counties and cities would transfer back to the state.  


COMMENTARY ON ARTICLE (LINKED AT BEGINNING OF POST)


Commentary is provided below on each paragraph in the article from "The Island Packet" dated 11/19/14:

Gary Simrill wants to transfer 18,000 miles of roads (the latest plan scaled that back to 15,000 miles), although the article fails to mention this.  Are separate county road systems really more efficient?  He also suggested that counties could have a larger share of gas tax to pay for road maintenance, but it's not likely that is going to be enough with a small gas tax transfer.  If revenues need to go up, they are shooting themselves in the foot by dividing up that responsibility among 46 counties when SCDOT is already consistently rated the most cost-efficient state DOT in the nation.  They will also need to significantly raise gas taxes if they are going to divide the responsibility of one agency among all of the counties and cities that currently rely on SCDOT for a large percentage of their roads.

Realistically, unless the state highway system is going to be scaled back to the point that even primary routes are being turned back, any gas tax funds going to the counties are going to strain the state's road budget.  At present, the counties should not have been receiving any state gas tax money since they maintain such a small amount of roads.  Representative Simrill needs to clarify just how much is actually going to the counties in terms of road responsibility.  The truth is that if the counties are taking on more responsibility, it is going to reduce the quality of what they already maintain.  Only 1/3 of the counties in South Carolina are financially or structurally prepared to take on more roads.  He is also not offering any plan to allow counties to pay SCDOT to maintain their roads in those counties that are not.  

Robert Croom in the article stated that the states do not have a history of following through with promised funding.  Indeed, counties and cities typically must raise their own revenue sources in lieu of depending on the state.  As of 2014, Georgia only provides 11% of their state highway budget to counties and Alabama only provides 20%, but both states have also pushed local option sales taxes as a way to raise local revenues.  Both states also have much smaller state road systems.  If SCDOT is going to continue to maintain 1/3 of the highway system, the most counties can expect is an additional 1-2% of the gas tax.  That is not enough to do anything, and if the state provides more it will not be enough to maintain roads without a huge stateside revenue increase.  This increase in local control reduces accountability and ultimately is less efficient.  It raises costs on local taxpayers for lower quality services.  Local revenue sources will have to be raised substantially, and even then it is no guarantee that local agencies will do as good of a job as the state does on routine maintenance.

What will be offered at first will seem like a good deal for counties, but ultimately the state will shift a majority of state funding to fund the state highway system leaving counties on the hook to handle most of the financial responsibility.  Unless the counties and cities want to maintain 90% or more of the road system, they should not expect adequate funding.  This is even a risk with Option 4 discussed above since these kinds of programs usually only lasted 20-30 years as was the case with Alabama and Maryland.

The state already has a mileage cap, so SCDOT is already devolving more responsibility on cities and counties yet the state will not allow counties to raise property taxes to make up the difference.  This is why any devolution effort should also be replaced with a ratio cap instead of a mileage cap.  In addition, if counties cannot raise property taxes, then ultimately a rocky secondary state system will be replaced with a rockier and even more substandard county road system.  It is not by any means more efficient for counties to do this work instead of the state.

Simrill stated that the likelihood of certain secondary roads never being repaved by the state is very likely.  That is not true unless the state continues to refuse to raise revenues.  North Carolina does not refuse to maintain any road under their control.  In fact, this is just an excuse for the state to force an unfunded mandate on the counties.  The money could be there, but the legislature is unwilling to raise revenues (sales, gas or other sources) fearing political fallout in the next election.  Legislators should poll and hold town hall meetings with residents in their districts to find out what they are willing to support and not try to sway the discussion in favor of devolution.  If devolution is to be considered, there are a number of better ways to handle it than the vague plan they are proposing.

Simrill stated the political bargaining that happened prior to 1975, but what he did not take in account is how dumb the system was handled.  The mistake they made was not taking over the remaining county roads when the sum exceeded 50%, but the advantage was that these secondary roads were far better constructed than they would have been as a simple takeover of county roads.  Regardless, it doesn't make sense to keep a separate county-maintained road system when the state is responsible for over half of the roads.

Another state representative stated that he lived on a state-maintained dead end road with few residents that he thought should not be state-owned.  True, but that should not be a rationale for wiping out the secondary system.  A trim of maybe 15-20% of the road system is the most that should happen in the case of removing roads like this, but options need to be available to counties that offset added costs besides just money.

It is also true the state needs a tremendous amount more money, but it should also be noted that not many roads in the state are in "poor" condition.  The roads will obviously be patchy for awhile, but they are not as terrible as they make them out to be or unfixable.  In fact, Alabama who has only 10.7% of their system under state control has 19% of their roads in poor condition with the same funding as South Carolina.  South Carolina in comparison has less than 10%.  A 10 cent gas tax increase like the governor proposes will help avoid the unneccessary devolution.  Counties will not be able to make this process go any faster.  The issue is money not responsibility for the roads.

Simrill stated that a gas tax increase was not being supported because of the risk of a veto (by former governor Nikki Haley).  This is the only real reason that South Carolina is looking to turn roads to the counties: unwillingness to raise taxes to the levels necessary to maintain those roads.  An improvement in the state's economy would also help tremendously.  He also states raising a penny sales tax for roads.  Indeed, voters are flaky about supporting such initiatives: especially on a regional or state level.  Such initiatives are best when handled on a county level.  It's unfortunate, however, that the state can't just ask for a temporary 2% additional sales tax that is not put to referendum used only for secondary reconstruction and maintenance to run for 5 years.  After that, the voters can then decide whether or not to renew it.  If he says that $643 million can be raised with 1 cent, then 2 cents would bring funding close to what is necessary to begin a major rehabilitation program.  

State and Local Road Reform has proposed a number of solutions that focus on South Carolina.  If the state does not want to control a secondary system, a number of new ideas have been proposed as a means of providing greater local control without the inevitable decline in engineering standards that comes from devolution.  However, if the gas and sales tax is increased, devolution should go off the table.  The best solution is a 5 cent raise in the gas tax coupled with a 1 cent sales tax.  According to the article, the 5 cent increase will raise $170 million and the 1 cent sales tax will raise $643 million.  At $813 million, this falls short of the $1.5 billion cited, but if used prudently focusing on maintenance and reconstruction of failing roads and structurally deficient bridges until all are in good condition, it should not take long for this to happen.  Eliminating county highway agencies in 2/3 of the counties in the state in favor of state-maintained county roads or regional roads would also help to offset costs to bring these roads into good condition.
Read more here: http://www.islandpacket.com/2014/11/18/3438879_sc-house-committee-to-explore.html?rh=1#storylink=cpy

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