South Carolina is growing.
So much so that the state’s Revenue and Fiscal Affairs Office projects the population will grow 29% over 20 years — from 5.1 million people back in 2020 to 6.6 million residents in 2040.
"That’s a pretty sizeable increase," Frank Rainwater, executive director of the RFA, told state lawmakers last week.
That growth, he said, has impacted nearly every sector in the Palmetto State, from industry to utilities and homebuilding.
It has especially put pressure on the state’s infrastructure.
Fifty-three percent of state roads are maintained by the state.
"We have more resources. You have more taxpayers," Rainwater said. "But is the revenue source keeping up with the demand caused by this growth?"
The answer is no, officials said.
State Transportation Secretary Justin Powell recently told members of a S.C. House Committee focused on infrastructure policy and spending last week that "if there’s a desire for us to do more, to build more, to maintain more, ultimately it will take more funding."
After months of public listening sessions throughout the state, that committee is now tasked with drafting legislation to help modernize the state DOT, accelerate projects, permitting and resources and address congestion — among the top complaints for residents in the state’s heavy traffic areas.
State Rep. Shannon Erickson, a Beaufort Republican and co-chair of the committee, told reporters that between the governor, the House and the Senate, everyone is ready to see changes.
"What the something is? That’s the sausage-making, right?" Erickson said.
Erickson told reporters everything is on the table.
That includes raising fees on electric cars — among the lowest in the Southeast — looking at toll roads, adding preferred-choice lanes on the interstates to help ease traffic congestion and cutting regulations, a process Powell has already started.
The department has proposed cutting 30% of what it called outdated and redundant regulations.
What change the committee will unlikely debate, Erickson said, is an increase to the state’s 28-cent per gallon gas tax, last increased by the Legislature in 2017.
Without that raise to the gas tax back in 2017, Powell said many road projects would not be where they are today.
Two main pots of money mainly feed the department’s infrastructure revenue: 20% from car sales taxes and another 62% stems from the gas tax.
"I don’t believe there’s appetite for the gas tax to be raised," Erickson said. "Are there areas that we need to tweak? I think one of the low-hanging fruit pieces is going to be our electric vehicles. That’s something that I have not heard any dissent over at all. And, honestly, we were the first state to put that in place. We didn’t index it. We didn’t even know what it was going to look like when we did that. So we need to update that piece. We know, we all agree that has to be fixed."
On top of inflation, the transportation department — and the Legislature’s spending for that matter — could face another hurdle.
Over the years, Rainwater told lawmakers that South Carolina has grown its dependency on federal resources, which make up 40% of the transportation department’s funding.
And coming up for renewal is the reauthorization of the big infrastructure law passed in the Biden administration.
Powell told lawmakers the chatter out of Washington appears to say states may be getting less moving forward.
"It is very clear that what we are hearing out of Capitol Hill, is that it is unlikely that the federal program will grow, from where we are getting at that billion dollars we’re getting today, and (it) may very well come down," Powell said. "And, so while we don’t know exactly how it’s all going to shake out, we have not seen legislative text, we are not counting on the same rate of growth that we saw back in 2021."
And Powell said the department is potentially bracing for a cut to their federal funds as a result.
The Legislature returns Jan. 13.
