The South Carolina legislature faces an uphill battle to fund infrastructure projects — marred by financial capacity, bitter history, and suitable timing.
As the South Carolina state House of Representatives begins debates to finalize its budget for the 2018-2019 legislative year, a broken escalator in the Capitol Building has become the focal point of a larger discussion about allocating funds for routine repairs on public buildings.
The escalator in question sits underneath the Capitol and connects the underground parking lot to the entrance level. The 43-year-old machine cannot go upwards, and has subsequently forced legislators to climb the broken escalator as stairs.
Marcia Adams, the director of the Department of Administration, told a panel of House and Senate legislators that her department has trouble finding parts because the escalator is so old that companies do not produce the requisite parts anymore.
But as the House hears arguments for why the state should allocate funding for its repair, the broken escalator provides a concrete example for the benefits of regularly funding infrastructure repairs like building maintenance. Last year, state agencies requested $2 billion for repairs and sometimes to renovate public buildings, college campuses, health facilities, museums, courtrooms, and state law enforcement buildings across the state — and lawmakers have not come close to matching it.
On Monday, legislators considered a spending plan that allocates $8 billion of South Carolina’s tax income – of which only $70 million was reserved for repairs and renovations for public buildings.
Of that $70 million, $50 million goes to public colleges, $7 million to replacing antiquated technology in South Carolina courtrooms, and $4.5 million to the state’s Department of Administration to replace expensive technological infrastructure. Replacements include a 31-year-old air conditioning system in the adjutant general’s office, elevators in the Wade Hampton Building, and the legislators’ escalator in the Capitol.
“You’re so far behind,” Adams reportedly told the legislators. “It’s actually going to take some type of something like a bond bill to catch up. Every year you can’t get to these projects, that number grows.”
To pay for improvements to public buildings, lawmakers have looked to use money outside of the general revenue stream to pay for the repairs. A common way would be through a bond, essentially borrowing money, and promising to pay it back.
Forcing the state to take bonds to pay for state improvements has been tremendously unpopular in the Palmetto State. In 2015, former Gov. Nikki Haley denounced a $500 million economic plan to use outside money to pay for college tuition and job training projects, local economic development, and building maintenance.
“We’ve got an issue of a chairman of Ways and Means who wants to … run up the credit-card debt just because he can,” Haley told The State in 2015, speaking about House Ways and Means Committee chairman Republican state Rep. Brian White.
“Whenever you have something in your home, your thoughts should not be, ‘Let’s charge it and put it on the credit card,’ ” Haley addded. “Your thoughts should be, ‘Let’s use the money we have and pay for it.’”
Later, White told the Post and Courier that despite Haley’s blistering criticism, the state has made little improvements. “I basically got run over by a bus [by Haley’s comments,] but the problems haven’t gone away. They’re still there. The cost is more to fix it now, and the interest rates have doubled,” White said. “It’s like building a house and never maintaining it. That’s foolish, and that’s where we are.”
In April 2017, Gov. Henry McMaster spent significant political capital in order to repair critical infrastructure in South Carolina. Initially, he refused to raise the gas tax and instead elected to borrow up to $1 billion to make repairs to roads, bridges, and public buildings. While the bill specifically allocated money towards making repairs to buildings on college campuses, he urged lawmakers instead to put that money exclusively towards the state’s roads. At the time, he told The State that building repairs in the Palmetto State are, ”very important, but not urgent.”
For his decision, he faced significant resistance from Republican House Speaker Jay Lucas and from 10 South Carolina college presidents. A separate state spending bill raised the gas tax and passed through the legislature, but McMaster vetoed the bill. The South Carolina legislature later voted to override his veto.
Regarding the current budget debates, Republican Hugh Leatherman, the president pro-tempore of the Senate, told the Post and Courier that McMaster has threatened to veto any bill that relies on funding from bonds. Leatherman thinks financing infrastructure projects through bonds are especially costly in 2018 because of high-interest rates.
For him, a better time would have been less than a decade ago, in the wakes of the 2008 recession, when interest rates were among historic lows. “We missed some golden opportunities to resolve our maintenance issues,” he said.
Leatherman might be right; 2018 may not be the right time for expansive investment in South Carolina’s infrastructure. The data-driven politics and sports site FiveThirtyEight wrote about how a strong economy and low unemployment may interfere with a feasible infrastructure plan.
Costly repairs make more sense when the economy is faltering and Americans are desperate for work. In that environment, infrastructure spending has a supersized impact: Not only does it improve America’s bridges and transit systems, but it also provides jobs for people whose skills might otherwise go to waste.
On the federal level, the United States boasts both a strong economy and low unemployment rates. On the state level, South Carolina appears similarly cursed by its good fortunes.
At the 36th Annual Economic Outlook Conference, a pair of economists from The University of South Carolina in 2017 found that the state’s economy was relatively strong: boasting modest job creation, a number of growing industries, and benefitting from low housing costs.
“For the last several years, our rate of economic growth has been accelerating, but in 2016 it leveled off and is now growing at a constant rate,” research economist Joseph Von Nessen said. “In addition, the labor market has strengthened considerably. Our unemployment rate has dropped to 4.7 percent. And although this is good news for workers, it also means that employers are now struggling to find qualified employees to fill new positions.”