To maintain and improve South Carolina’s extensive network of roads and bridges, the state depends on federal funding and state revenues from the motor fuel user fee and other driver/vehicle-related fees.
Federal Funding
Federal Funding plays a critical role in funding our transportation program. It accounts for a significant amount of South Carolina’s transportation budget. The primary funding source for federal highway investment in the United States is the excise tax on motor fuels.
- Federal Excise Tax on Gasoline: 18.4 cents per gallon
- Federal Excise Tax on Diesel: 24.4 cents per gallon
Fuel taxes are dedicated to the federal Highway Trust Fund (HTF). Other revenue sources dedicated to the HTF come from taxes on tires and heavy vehicles (trucks). Due to decreased buying power of fuel tax revenues over the years, the fund has been dependent on revenue transfers from other sources to remain solvent.
In 2021, Congress passed the Infrastructure Investment & Jobs Act (IIJA) which reauthorized surface transportation funds through 2026 and increased federal funding to states. Thanks to the IIJA, South Carolina is receiving approximately $250 million more in federal formula funding (roughly $1 billion, up from $750 million) thanks to the IJA. Revenue sources for the IIJA come from various sources including general funds.
State Revenue Sources
South Carolina’s transportation infrastructure revenue sources come from state motor fuel user fees and other vehicle-related fees. State revenue sources are used to match federal fund requirements, and they are critical to funding maintenance and repairs.
- Motor Fuel User Fees: The state’s predominant source for transportation infrastructure comes from motor fuel. Often referred to as the “gas tax,” the state collects a 28.75 cents per gallon user fee on motor fuel (gasoline and diesel) purchased in South Carolina. We have compiled additional details related to motor fuel revenue collections and trends here.
- Infrastructure Maintenance Fee: Fee imposed on purchasing a vehicle or transferring vehicle registration from another state. The fee is 5% for in-state purchases (capped at $500) and $250 for out-of-state transfers.
- Biennial Registration Fees: $16 of the biennial registration fee for passenger vehicles.
- Registration Fees for Alternative Vehicles: Biennial registration fees on alternative vehicles ($60 for hybrids; $120 for electric vehicles).
- Road Use Fees on Motor Carriers: Commercial vehicles over 26,000 lbs. pay a “road use fee” to the state. This fee is based on property tax formulas and captures revenues from interstate trucking operations. The majority of these fees go to counties and are treated like property tax revenues. The remainder is dedicated to the Infrastructure Maintenance Trust Fund.
- DMV Fines and Fees: Many fines and fees related to licensing and titling requirements are allocated to the SCDOT.
- Other Revenues: The SCDOT also receives revenues from fines, tolls, permits, and $120 million in recurring general funds.
These revenues are allocated their respective accounts and used by SCDOT to repair, maintain, and improve the state’s transportation network. On average, over 82% of SCDOT’s yearly expenditures go directly toward maintenance, preservation, and capacity improvements to existing roads and bridges
County Transportation Committees
A portion of state revenues from gasoline taxes (3.99 cents) goes directly to counties via C-Funds allocated to County Transportation Committees (CTC).
CTCs are a partnership between the state and the counties to fund local transportation projects and improvements to state and county roads and city streets. Generally, members of the CTC may be appointed by their respective legislative delegation or governing bodies at the local level. CTCs are separate entities from SCDOT, and members of the CTC are responsible for determining how money is spent across the county.
C-Funds are allocated based on a formula that takes into account land area, population, and rural road mileage. By law, CTCs must spend at least 33 percent of their C-Funds on the state highway system for construction, improvements, and maintenance.