Bad News Ahead For S.C. Gas Tax Revenue

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David Hucks
David Huckshttps://myrtlebeachsc.com
David Hucks is a 12th generation descendant of the area we now call Myrtle Beach, S.C. David attended Coastal Carolina University and like most of his family, has never left the area. David is the lead journalist at MyrtleBeachSC.com

In 2017, the South Carolina General Assembly passed a tiered 12% gas tax phased in at 2 cents per year for 6 years.

As of January 1, 2021 the tax brought in nearly $1.65 billion, about $42 million more than the approximately $1.61 billion in total project “commitments” identified by DOT, according to agency records.

The tax brings in an average of $39 million monthly.

Promises made by S.C. government were that the tax would only be used on existing roads and bridges, especially farm to market roads.

To date, the tax has brought in more than the state could physically spend. Estimates are that the state held nearly $700 million of the funds collected in escrow as of last January.

TROUBLES JUST AHEAD

Future problems loom ahead for this funding source, however.

In just 8 years, U.S. and international car makers forecast that 30% of all cars on S.C. roads will be electric vehicles (or electric/hybrid vehicles).

What happens to future gas tax funding when 30% of the market are made up of electric cars?

“PLAN” IS A FOUR LETTER WORD

Governor McMaster is parading around the state promising millions for road projects in his bid to get reelected.

Tomorrow, Myrtle Beach City Council is scheduled to pledge $126 million in city hospitality tax funding towards I-73.

What happens to local roads and bridges once people average 55 miles to the gallon or more?

Even with inflation, a precipitous fall in collections can be expected.

The average electric hybrid can expect to get 660 miles to the tank.

Charlotte, N.C. is the Grand Strand’s number one feeder market for tourists. Charlotte is 175.5 miles away from Myrtle Beach.

A tourist can fill their tank in Charlotte, drive all over the Grand Strand and back home without needing a refill.

The round trip from Charlotte to Myrtle Beach (with no detours) is only 351 miles. Tourists could cover 309 miles up and down the Grand Strand and still have plenty of fuel to return home.

2030 JUST UP THE ROAD

Currently, the state is operating on the plus side of the gas tax. However, more than 60% of our secondary roads need improving. Our bridges state wide are failing.

Highway 90 is a clear example of one such road that must be widened. That project alone is budgeted at $1 billion.

Highway 905 and Highway 701 will need widening soon as well.

Is the legislature planning for changes that the electric car will certainly bring to our state?

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