The SCDOT was among the state agencies who testified before the Senate Finance Committee as they began virtual budget deliberations this week. While SCDOT does not receive general fund revenues, because they depend on transactional fees and fuel taxes, they have not been immune to the pandemic’s impacts.
Secretary of Transportation Christy Hall provided an update to the committee on the SCDOT’s finances and actions to keep projects moving forward.
She noted that traffic volumes leveled off in June and remain within 5-15% of 2019 levels. Hall said that car sales were strong despite the reduction in fuel tax revenues, which helped alleviate adverse impacts on revenues for the agency.
Revenue impacts from traffic declines are not immediately felt by SCDOT. Timing plays a key role because of the way fuel tax revenues are collected and ultimately deposited into SCDOT’s account. In addition, tax filing extensions also amplified the importance of timing in regard to financial management. The following illustrates the actual gas tax deposits since March:
According to the data, motor fuel collections are down about $49 million, car sales were up $14.8 million, and DMV fines remain steady. This results in a net revenue loss of $34.2 million since April.
Moving forward, SCDOT is projecting a 6% decline in gas tax revenues and car sales tax revenues through 2022.
Secretary Hall said that the SCDOT continues to work to maintain core operations, keep road and bridge projects moving forward, and protect liquidity for a potential second wave of the virus or other shocks.
In response to the revenue interruptions, the agency implemented a hiring freeze and a 12% cut to the internal operating budget – which equates to roughly $34 million. Similar actions will continue through 2022, depending on revenues.
To date, South Carolina has not had any project delays or cancellations because of the pandemic. In fact, thanks to a collaborative effort between industry partners and SCDOT, a joint workforce safety plan was created in March to ensure that precautions were taken to keep crews safe and allow projects to continue to move forward, all at a time when many other sectors of the economy came to a halt.
Moving forward, SCDOT will continue to monitor revenues and align projects with revenue receipts.
View the full presentation here.