Legislative Update

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And So It Begins

Members of the House and Senate returned to Columbia this week to gavel in a new legislative session. This is the first year of a two-year session, so everything starts anew. It was a short week on the floor for both the House and Senate since committee work must ramp up in order to get bills placed on the calendar and up for debate. However, things will be picking up next week as more committees begin to meet and the House budget subcommittees continue their work.

Additional infrastructure investments in the budget are likely this year as SCDOT continues to put state and federal dollars to work. At this time, it is unclear what priorities the House and Senate may have when directing any additional revenues. Still, we appreciate Governor Henry McMaster teeing up infrastructure in his Executive Budget. (More on that below.)

The SCDOT and Infrastructure Bank will present their budget requests to the Ways & Means Transportation & Regulatory Subcommittee chaired by Rep. Heather Ammons Crawford (R-Horry) next week. Stay tuned!

McMaster Sworn In for Second Term, Executive Budget Highlights Priorities

Governor Henry McMaster was sworn into his second full term on Wednesday morning during a ceremony at the Statehouse. At the end of this term, McMaster will be the longest-serving governor in the state's history.

Governor McMaster released his Executive Budget last Friday afternoon, which calls for more infrastructure investments in FY23-24. Specifically, Governor McMaster has requested that the legislature allocate additional funds to SCDOT to address bridge projects, I-73, and litter.

Bridges: The Governor recommends $550 million to bolster investment in bridges ($500 million in non-recurring funds and $50 million in recurring funds). These dollars will be focused on accelerating the repair and replacement of existing bridges on interstates and primary highways.
I-73: The Governor again recommends a $300 million (non-recurring) allocation to begin construction on I-73. This investment would start work on phase 1 and is aimed at serving as a catalyst for local and federal government partners to finalize their own investment plans to complete the project.
Litter: The Governor recommends $2 million (non-recurring) to fund SCDOT's litter control efforts.

In addition to transportation infrastructure, the Executive Budget also recommends investments in economic development, water, and workforce.

Economic Development: $500 million (non-recurring) to help the Department of Commerce to meet its obligations to previously committed economic development projects. These funds would support infrastructure needs, such as site preparation, roads, bridges, rail, water and sewer, and workforce training requirements for these large-scale developments. In addition, the budget also recommends $200 million (non-recurring) to acquire and develop land to be certified as mega sites to attract new businesses.
Water: $380 million (non-recurring) to revitalize South Carolina's water, wastewater, and stormwater infrastructure. Last year, the Rural Infrastructure Authority (RIA) received $800 million in ARPA funds for this purpose and received nearly $2 billion in requests.
Workforce: $500,000 (recurring) allocation for the Be Pro Be Proud program. The budget also includes other lottery fund allocations to the technical college system to support scholarships and the purchase of high-demand job skill training equipment.

For a copy of the Governor's executive budget, click here.

It is important to remember that the Executive Budget is a recommendation to the General Assembly. The House and Senate will ultimately determine how FY23-24 dollars will be allocated over the next few months as budget deliberations ramp up.

The budget is initiated in the House, and work is already underway. Ways & Means subcommittees will continue to hear budget requests from respective agencies and entities over the next few weeks before taking their recommendations to the full Ways & Means Committee to craft a budget. The House is expected to take up the budget on the floor the week of March 13.

We applaud Governor McMaster's continued support of infrastructure and setting the stage for additional investments to improve roads and bridges. We look forward to working with the House and Senate to support infrastructure investments during this year's budget process.

Ways & Means Talks Remaining ARPA Fund Allocations

The House Ways & Means Committee chaired by Rep. Bruce Bannister (R-Greenville) met Thursday morning to give favorable report to legislation that allocates remaining ARPA dollars (H.3604) to water and sewer infrastructure.

By a vote of 24-0, the committee adopted language to allocate $586 million to the Rural Infrastructure Authority (RIA) for existing grant applications for water/sewer projects. Of those funds, approximately $86 million must be available for projects designed by the Secretary of Commerce for economic development.

The bill also allocates $500 million from the Contingency Reserve Fund for economic development projects approved by the Joint Bond Review Committee (JBRC) and State Fiscal Accountability Authority in fiscal year 2022-2023.

The resolution now moves to the full House for consideration.

S.361 – Construction Contract Extensions

Primary Sponsor: Senator Larry Grooms (R-Berkeley)

Removes provisions that the SCDOT Commission must provide pre-approval for contract extensions and removes provisions that limit contract extension amounts. The bill was referred to the Transportation Committee.

S.362 – Procurement Code Exemptions

Primary Sponsor: Senator Larry Grooms (R-Berkeley)

Adds planning and other improvements on state right-of-way to the list of exemptions from the state procurement code. The bill was referred to the Finance Committee.

Omnibus Funding Bill Includes Flexibility for ARPA Funds

ARTBA reminds everyone that the final Fiscal Year 2023 government-wide spending package signed into law last month assures the timely release of federal transportation funds and puts in place the “Cornyn-Padilla Amendment” (CPA) to provide state and local governments additional flexibility to use COVID-19 relief aid for transportation infrastructure projects.

Specifically, state, county, and local governments may spend up to 30 percent or $10 million of their portion of the ARPA funding, whichever is greater, on highway and public transportation projects.

While South Carolina used the “revenue replacement” funding component of ARPA allocations last year to address infrastructure projects, this certainly opens the door for local governments seeking to address infrastructure issues with ARPA funds.

Georgia Gas Tax Returns

After 300 days, Georgia's "temporary" gas tax suspension ended on January 11. You will recall Governor Kemp first suspended the 29 cents per gallon gas tax back in March 2022. The suspension became somewhat of a political football and extensions of the suspension continued through the 2022 election season. (The tab to backfill the Georgia DOT with surplus budget dollars clearly ran higher than initially planned, but politics is politics.) The good news for Georgia's roads and bridges is that the gas tax is back in place - and because Georgia indexes rates to ensure buying power, it is now up to 31 cents per gallon.