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South Carolina Needs To Stop Shooting Itself In The Foot

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March 8, 2017
By Andy Brack | Contributing Writer

There’s some high-fiving going on in Columbia as state lawmakers are pushing through measures to raise the gas tax and fix the state employees’ pension system.

Unfortunately, these are solutions for problems of the legislature’s own making. Had the General Assembly done its job years ago, legislators wouldn’t have to be raising taxes to fix crumbling, pot-holed roads. They wouldn’t have to be charging taxpayers and state employees more to make up for dumb losses to the state’s pension fund.

Just look at the hullabaloo about raising the state’s fourth-lowest-in-the-nation gas tax of 16.75 cents per gallon by a dime per gallon.

The last time this tax was raised was in 1987 when the late Carroll Campbell, a Republican, was governor. At the time, the Einsteins in the Democratic-led legislature decided to raise the tax, but not index it to inflation. Perhaps they figured they’d revisit the issue, but in the anti-tax furor that erupted a few years later and as Republicans took control of the S.C. House, one year of inaction led to another. Thirty years later, the roads are a mess as the buying power of the gas tax eroded due to the inflation that makes things now more expensive than they were then.

Had lawmakers done something simple, like index the gas tax to inflation, the rate would have risen two or three percent every year. By now, state transportation officials say, the rate would be the equivalent of about 34 cents per gallon.

To put that in perspective, the state Department of Transportation would have had $600 million more to spend this year on roads, bridges and infrastructure than what they actually have. Guess what amount the new legislative package to fix roads and bridges equates to? You got it, $600 million.

Had the gas tax slowly inched up over the years, there would have been billions of dollars more over the years to keep roads safe and up-to-date. For example, there would have been $570 million more last year, $500 million more two years ago, around $300 million more 10 years ago and so on every single year. Add up all of those piles of lost revenue and you see how the state could have kept roads in shape so that maybe we wouldn’t be facing a crisis now.

Columbia’s legislative high-fiving is happening in more areas than roads. Just look at the effort to “reform” the state’s pension system.

A few years back, state lawmakers thought they were being smart by passing legislation to try to get better returns on pension investments. The result? More aggressive strategies, expensive fees and higher costs just as the Great Recession caused the markets to plunge. The pension plan, valued today around $26 billion, should be worth about twice as much, experts say.

So the legislature, without a bit of shame for causing the problem, comes in now to fix the mess with solutions that will cause employees and taxpayers to pay more into the fund so there will be enough money in it in years ahead to pay pensions for state retirees. It’s another self-inflicted problem in search of a solution.

In South Carolina, you don’t have to look hard to see the corrosive, laissez-faire impact of the past two decades of Republican rule (preceded by hands-off Democratic rule). For example, a new study says the state has the nation’s worst education system. Is it a coincidence in recent years that state lawmakers have deviated from a mandated student funding formula to cause more than $3 billion in underinvesting in public schools?

Or what about the Department of Social Services, which is finally getting some additional staff after children in the agency’s care died? This is the same department that hasn’t been able to get a computer system working for two decades to keep up with deadbeat dads. (Want to guess which state is the only one to not have such a system?)

South Carolina has enough problems without continuing to shoot itself in the foot. Let’s start planning for the future, not only reacting to past wounds.

Andy Brack is editor and publisher of Statehouse Report. Have a comment? Send to: feedback@statehousereport.com.


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