Democrats spent this entire legislative session mocking Gov. Nikki Haley’s proposal to tackle our frightening and growing road problem using funds from a magical “money tree.”
Then last month, their candidate for governor proposed … to do the same thing.
Sen. Vincent Sheheen was smarter than to use language so given to parody, and the details are different, but his proposal to divert all of the state’s annual revenue growth to road and bridge repair is of a piece with and no more realistic than the governor’s plan.
Technically, Sheheen has a plan. And Haley says she has a new plan, although she won’t reveal it until after the election. Unless she’s playing with semantics, her no-new-tax pledge leaves her no place to go besides where Sheheen has gone.
That’s because once you decide to take on the state’s $29 billion infrastructure backlog, you have only two options: Raise taxes or starve government.
I suspect that if the Republican-controlled House and the Republican-controlled Senate were to send a bill to a Gov. Sheheen to raise the gas tax, he would treat it the same way Gov. Carroll Campbell treated the Legislature’s last gas-tax increase, a quarter-century ago: Sign it into law. Of course, we have no idea whether the Legislature would do such a thing, because most lawmakers who support a gas-tax increase say there’s no reason to even try it as long as we have a governor who is promising a veto.
But candidate Sheheen isn’t proposing to raise the gas tax. He proposes instead to divert 5 percent of the state’s general fund and surplus revenue to the Transportation Department, and rely on unspecified new revenue, to reduce the backlog by about a third to a half.
He says he wouldn’t have to cut existing programs to do this because he would rely on the revenue growth that occurs every year as a result of inflation and population increases.
That’s certainly not a new approach. To anything. It was the idea behind Haley’s smaller proposal to rely on the “money tree” – her term for the amount by which revenue projections are increased each year between the time she proposes her budget in January and the Legislature passes a budget in June – and it’s likely to be central to her secret plan.
In fact, relying on revenue growth, or “new money,” has been the basis of pretty much every plan our state’s leaders have put forward in the past two decades to create new programs or cut taxes. And it can sort of work. On a small scale. Or a one-time basis.
But we have neglected our roads and bridges for so long that putting a serious dent in the infrastructure backlog is neither a small-scale nor one-time task.
Consider: The state’s general fund budget is about $7 billion a year. The most conservative estimates are that the state needs to spend an additional $1 billion per year, for the next 20 years, to bring our roads and bridges up to adequate; the Transportation Department puts that figure at about $1.5 billion per year.
Revenue growth has averaged $120 million per year over the past decade, and has averaged at most about $160 million per year for the past 20, 25 and 30 years. As for Sheheen’s idea of using revenue growth to divert 5 percent of the general fund to highways, well, you simply can’t get there from here: General fund revenue was projected to grow by 1.2 percent this year, and 2.9 percent next year. It grew by an average of just 1 percent per year over the past decade and 2.7 percent per year over the past two decades.
If you think of our government like an individual, “revenue growth” is akin to the cost-of-living raise a lot of people get every year: If you’ve already made all the big purchases you need to make and you don’t have any big emergencies, it’s enough to get you by.
But if you set aside all of the cost-of-living raise to pay for a new roof, then you might have to do without the root canal, and when the dryer conks out, you’re just going to have to make your neighbors mad by hanging your unmentionables in the backyard. Even without emergencies, you’ll still have to scale back, because you won’t have any way to keep up as inflation leads to higher grocery and gas and utility prices.
Only it’s worse than that, because you have to send your entire pay raise to the roofer every year. For 20 years. And at the end of 20 years, you’ll need to keep doing the same thing, because you’ve only spent enough to re-roof the front half of the house.
If our Legislature had decided last year to divert all the state’s revenue growth to infrastructure, it couldn’t have paid for Haley’s landmark plan to focus intensely on reading in the early grades and to help supply the hardware and training to integrate modern technology into classrooms. It couldn’t have paid for Sheheen’s plan to provide 4-year-old kindergarten to more poor children.
If our Legislature had decided two years ago to divert all the revenue growth to infrastructure, it couldn’t have paid for credit monitoring for South Carolinians whose Social Security numbers were stolen from Haley’s Revenue Department. Or for the first year of Sheheen’s 4K expansion.
If our Legislature decided next year to divert all the revenue growth to infrastructure, it wouldn’t be able to hire those 200 caseworkers that the Department of Social Services says it needs – and Haley says she supports – to get staffing up to pre-recession levels, and maybe keep a few kids from being killed by their parents.
Diverting all the revenue growth to roads and bridges means there’s no money to cover inflation – much less population growth.
We wouldn’t just be unable to hire those additional case workers; we’d have to further reduce the number we have, even as the number of families who need DSS supervision grows. We wouldn’t just be unable to expand 4K and hire reading specialists; we’d have to lay off teachers.
No, you don’t necessarily have to cut government programs if you divert the new revenue – for a year. But by year two, you have to start making cuts. By year 20, you probably don’t want to think about how big those cuts would be. And you’d still have half the job undone.