Lawmakers Using Flood as Excuse to Raise Taxes, Grab Federal Money

SC Flood 2

‘Let’s take this tragedy and turn it into an opportunity’


South Carolina Policy Council
By Ashley Landess , Oct. 30, 2015, 6 a.m.

We saw it coming, of course. But honestly, I didn’t think it would happen so fast.

No, no. I’m not talking about the Cubs tanking (It’s 2016, people – that’s our year!). I’m referring to how quickly politicians and government officials went from lip-service compassion for flood victims to calling for a massive tax increase to “fix” the problem.

It hasn’t yet been a month since the historic flood costs many South Carolinians their homes, businesses, personal property, and in a few cases their lives. Government officials do not know what it will cost to repair roads, bridges, and dams. Shell-shocked citizens don’t know what it will cost them to replace property, rebuild homes, and save their businesses.

The public has not been given any sort of timeline or priority list, or even a process to determine all of that. And as SCPC policy analyst Shane McNamee’s analysis reveals, the process by which South Carolina will request, accept, and spend federal disaster relief is so flawed that misspending and even corruption are almost a given. At the very least, the cost to South Carolinians will be enormous – around 25 percent of individual and state aid will have to come from us.

Despite all the unanswered questions, many legislative leaders, local government officials, and transportation officials have launched an aggressive campaign with only one theme: now is the time to raise taxes. That push was in full drive this week.

DOT Commissioner Mike Wooten spoke to the Florence Rotary Club, and according to the news story he “strongly refuted any notion of fiscal mismanagement” by the DOT, complained that South Carolina has the lowest gas tax in nation (not a word about our 14th-highest income tax), and called for an increase “in the range of 20 cents per gallon.”

But the most interesting point made by the DOT’s Vice Chairman was that “the longer you wait to preserve the road, then you get into rehab, and then you get into total reconstruction, and your cost goes straight up from there.”

True, and yet the state devotes too few dollar toward maintenance and repair. Meanwhile, at the meeting of the board of the State Infrastructure Bank, where billions of dollars flow away from maintenance and repair to the borrowing of new money for new construction, Rep. Chip Limehouse (who is on the board, which is largely controlled by legislative leaders), remarked that “my thought process was let’s take this tragedy and turn it into an opportunity for more money for the DOT.”

Pretty clear. Limehouse also said that “without the [Infrastructure Bank] board, you don’t have the money at DOT to do anything.”

The STIB is not supposed to be a primary funding source for roads, but Limehouse is in effect saying that it is, even though it undertakes no maintenance or repair. Rather, it funds new and expansion projects in politically influential counties (10 out of 46 counties have gotten the vast majority of STIB funds).

We still have no plan from anyone on priorities, cost, and process for flood repairs, but Limehouse continued his speech to defend his colleague on the STIB board, Senate President Pro Tempore and Finance Chairman Hugh Leatherman, who has control over just about every board that governs transportation, from the Finance Committee to the Infrastructure Bank board, to the Joint Transportation Review Committee that nominates the DOT commissioners (Leatherman’s son-in-law, John Hardee, is on the DOT commission – and as The Nerve revealed earlier this year, Hardee’s company also has a contract with the DOT).

Senator Leatherman has arguably been the chief driver of the tax increase. He has openly stated: “I’m going to get money for DOT any way I can get it. The flooding event is one thing. The DOT’s needed money for a long time.”

Translation: the federal disaster relief offers an opportunity to draw down untold amounts of money – whatever the cost to struggling South Carolinians.

And make no mistake, there will be a cost. The federal dollars come with strings, and that 25 percent match required from the state will hurt. Right now, dollars are already being spent – how much we don’t know. The governor has not made her agreement with the federal government available yet to the public. We know less than ever about the cost of our road repair, but we’re already seeing the direction in which politicians are headed and it’s not toward the systemic reform that would force accountability and transparency on a system that is almost entirely out of citizens’ control.

Ashley Landess is president of the South Carolina Policy Council, The Nerve’s parent organization

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