By Sarah Nuckles
Robert J. St. Onge, the Secretary of the South Carolina Department of Transportation (SCDOT), has been issuing press releases about the agency’s cash position since it was first revealed that SCDOT had no cash around April 2011.
We are now up to press release No. 44.
Millions of dollars in contractor fees and purchases went unpaid as it became clear that the agency’s cash management existed “in name only,” creating a crisis that has been an embarrassing debacle for SCDOT and our state over the past year. But according to the press releases from St. Onge’s office the agency’s cash position has a “continued positive outlook” and contractors and purchases are mostly being paid in a timely manner – a “rosy” picture indeed.
It looks like the SCDOT has solved its financial problems – or has it?
At my last meeting as a SCDOT commissioner on May 17, 2012, I asked Secretary St. Onge why the agency was not addressing the nearly $100 million that would have gone toward road resurfacing in these “rosy” press releases. The answer from the Secretary was as follows: “If I resurface the State roads, cash will drop to zero.” Secretary St. Onge indicated he would try to see if the agency could resurface a few roads, but the resurfacing letting that was approved by the SCDOT Commission a year earlier was deferred by the Secretary for over a year, and no resurfacing was allowed in May of this year, either.
Not only has the resurfacing of state roads been stopped but normal maintenance – like fixing potholes, striping, mowing and performing a myriad of other maintenance items – has also been severely curtailed. This is because maintenance districts around the state saw their budgets cut by 15 percent effective July 1, 2012, ON TOP of a similar reduction in spending in 2011 when the cash crunch hit.
The total amount of the deferred resurfacing projects and the budget cuts is in the $200 million range.
It is easy to see why the weekly press releases look so good when the SCDOT is NOT spending money it typically would spend to try and “maintain the decline of the system” as Secretary St. Onge calls it. Yet, it is the Secretary who has made these decisions. He stated that the 15 percent reduction in maintenance – around $60 million – was needed to meet our state’s 20 percent match for federal funds and he did not want to “turn away federal money.”
Good luck on those potholes, folks.
No one wants to turn down any federal dollars, especially when we only get back roughly 92 percent of what we send to Washington. However, there is an exponential increase in the decline of our state roads and bridges each year, because the longer they go without maintenance the more it costs to bring them back to drivable condition. Try not changing the oil in your car and see how long the engine lasts – same concept.
I have asked Secretary St. Onge on at least three occasions to provide the “annualized rate of decline” as a dollar amount – a pungent number. The SCDOT routinely tells the media and state lawmakers how far behind the system is in terms of the billions it will cost to catch up. That could be converted to an estimated annual rate – a guide. The answer I got over two months ago was: “We are working on it.”
Here is my concern: Because our state is reallocating so much of its money to the 20 percent match, our state road system could be deteriorating at a dollar amount higher than the amount of additional dollars we get from Washington – basically putting us “in the hole” as it relates to our secondary roads and bridges, a hole that grows deeper each year.
In other words, if it is going to cost us more in the long run to take all of the federal money that’s available, should we really be doing that? We should at least understand the long-term consequences of taking every dollar waved in our face from Washington.
I understand the Secretary and many others want to get all the money they can from Washington, but when we pull up to the gas pump, we pay about eighteen cents per gallon to the feds and sixteen cents per gallon to the state. Drivers might naturally assume that the state gas tax would go to maintain and resurface state roads, would they not? Isn’t that what the state gas tax is for?
No. Here’s where it goes:
$270 million – Maintenance (potholes, striping, mowing, signs, salaries, drainage, traffic signals, guardrails, bridge maintenance, and minor replacements, buildings and grounds, etc. Does NOT include resurfacing).
$174 million – Unfunded federal mandate 20 percent match (increased by $60 million as a result of reducing maintenance).
$68 million – County transportation funds for county roads.
$59 million – Bond debt service on mostly federal road projects.
$3.3 million – Transfer to S.C. Department of Natural Resources.
$43 million – Administrative overhead at the SCDOT (salaries, buildings, etc.).
$64 million – Engineering overhead.
That adds up to $681 million.
The thorny dilemma we have on our hands is that half of our roads are state funded and half are federally funded – almost all exclusively from the gas tax. The feds not only do NOT return to South Carolina all that we pay, but they also require Palmetto State taxpayers to fork over the 20 percent match – which comes out of the state gas tax. And if we don’t pay this 20 percent we don’t get any of our federal gas tax money back.
To add insult to injury, St. Onge asked the SCDOT Commission in May to provide over $800,000 in state gas tax funds in order to relocate utilities belonging to the Town of Latta for the controversial I-73 interchange that’s being constructed near Latta on I-95. It was approved 6-1 – with my vote being the lone opposition. In addition there may be another $900,000 request coming to the Commission for approval – which would mean more money coming out of state gas tax funds for this unnecessary boondoggle.
Plus – SCDOT Commission Chair Eddie Adams stated in a recent Commission meeting that the $344 million bond proposal which includes I-73, was just “waiting for the cash flow to improve”. If those bonds are sold, the debt service would ALSO come out of the state gas tax funds. If the cash flow reports from Secretary St. Onge look as if cash flow is “rosy”, could that be intentional in order to justify selling the bonds for I-73?
The taxpayers and state lawmakers aren’t getting the whole story. There is no doubt the SCDOT needs additional funds to maintain the fourth largest highway network in the nation, but when you allocate public funds there should be complete transparency and accountability in order to gain the public trust.
When you stop to smell the roses you have to watch out for the thorns – and there are plenty of them in the SCDOT cash flow reports.
Sarah Nuckles is a former member of the S.C. Department of Transportation Commission.