Federal Funding

In South Carolina, about half of the state-controlled highway system is eligible for federal highway funds.

The federal government imposes an 18¢ per gallon fuel user fee across the United States. This funding is collected in each state, sent to Washington, and returned to the states in the form of federal-aid for highways. Annually, Congress appropriates the amount of funding for each state. In South Carolina, we are extremely dependent on federal dollars. We are a donor state, which means that for every dollar that we send to Washington, we receive an allocation equal to at least 92 cents. Our Congressional delegation has been working to increase this rate of return for South Carolina.

The federal funding that South Carolina receives can only be used for a few specific purposes. Federal dollars are primarily used for construction and generally cannot be used for maintenance. For South Carolina only about half of the state-owned highway system is even eligible for federal highway funds; the rest of the roads must be maintained and improved with state dollars alone.

Each state is required to "match" federal highway funds with state or local funds. The match ratio is generally 80 Federal/20 State. That means that SCDOT pays the entire cost and is reimbursed 80% by USDOT. This makes less money available for the state highway maintenance program. As more State maintenance funds are siphoned off to match the federal program, SCDOT has been forced to reduce or curtail numerous maintenance activities. Maintenance on South Carolina roads is the lowest in the nation.

Our total federal-aid program, including match, now stands at about $600 million per year. Thanks to the South Carolina Congressional delegation, we had a large increase in federal funds under the TEA-21 Act. This along with an aggressive bonding initiative, allowed us to accelerate the federal highway program between 1999 and 2006. In 2005, Congress enacted the SAFETEA-LU Act, which provided a modest increase for South Carolina.

These increases in construction funding have been welcomed, but they have placed the state in a funding predicament as we must shift dollars from maintenance in order to have matching dollars for the federal-aid highway program. The federal program as now leveled off. The next Transportation Reauthorization Act will come in 2010. Because of weakening fuel tax revenues, Congress will be faced with a significant challenge to fund the nation's highways.

Highway Policy in South Carolina

Highway Policy

Funding

Planning

Safety

Facts and Recommendations

Understanding Highway Policy in South Carolina
07highway_policy.pdf (150Kb)

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