Transportation Secretary Addresses Congressional Subcommittee on Highway Funding Issues

June 24, 2008

Limehouse calls for funding sources beyond the gas tax

COLUMBIA, SC – June 24, 2008 – Transportation Secretary H.B. Buck Limehouse Jr. told members of Congress that the fuel tax is not providing the needed revenue to meet the needs of the country’s transportation infrastructure. Limehouse testified in Washington, D.C. Tuesday morning June 24, 2008, before the Highway & Transit Subcommittee of the House of Representatives Committee on Transportation and Infrastructure. The Subcommittee invited Limehouse and others to express their views on the current fuel crisis and its impact on the nation.

Limehouse pointed out that the increase in fuel prices has reached a point where the public is consciously driving fewer miles, which results in decreased revenues and increased costs for the South Carolina Department of Transportation, creating a two-edged sword for the agency. Limehouse said, The fuel tax has proven ineffective in meeting the demands made on our highway system. This is a shrinking revenue source, and it doesn’t apply to highway users who drive alternative fuel vehicles.

Limehouse described the conflict created between two of the nation’s policies related to energy: the reliance on gas tax revenues to fund transportation, while at the same time working toward a goal of less oil consumption, promoting the use of alternative fuels and fuel-efficient vehicles. He also noted the 2007 legislation that mandates fuel economy standards for vehicles to increase 40% by the year 2020.

Limehouse told the Subcommittee that revenue from motor fuel taxes in South Carolina have been below 2007 levels for the past three months, establishing a trend that he expects to continue through 2008. He noted that SCDOT has undertaken a number of cost saving measures throughout the entire agency during the past year. The effort has resulted in a cut of $18.7 million in the FY08-09 administrative budget. These funds will be added to the agency’s highway & bridge maintenance budgets. However, Limehouse said that these savings are not enough to keep up with inflation. These savings will be far outweighed by the inflation we have experienced in construction and materials, particularly petroleum-based materials like asphalt, said Limehouse.

Limehouse made his remarks to the Subcommittee at a time when Congress is considering the reauthorization and funding levels of the Highway Trust Fund. This is the fund from which state departments of transportation receive a return on the federal gas tax that is collected at the pump. Limehouse reminded the members that South Carolina is a donor state, meaning that more revenue from this state goes into the federal Highway Trust Fund than is returned for highway and transit programs. Currently, the state receives 92-cents for every dollar of federal fuel tax paid at the pump, and 42-cents on the dollar for transit programs.

Limehouse noted that South Carolina is the 41st state in geographic size, but maintains the 4th-largest state highway system in the country: 42,000 miles of roads and 8,300 bridges. In addition, South Carolina is a coastal state where census figures bear out that the state is a growth area, which puts added pressures on the transportation infrastructure system and mass transit services.

Limehouse pointed to partnerships as the future of transportation funding. We must look to create incentives for local governments to invest in highways and transit. These partnerships play a major role in resolving needs-based problems in a political environment.
All of us working together can do more than any one of us individually,
he added.

Limehouse concluded his remarks by saying that the nation must continue to encourage fuel efficiency and transit programs.
However he called for an end to the unequal funding formulas that favor some states over others. Limehouse stressed that the need to change this nation’s vision of highway policy is now and that new and creative means are needed so that transportation services can grow with the demand.