Published on June 2nd, 2020 | by Millennium Magazine Staff0
SCDOT Releases Initial COVID-19 Financial Impact Projections
The South Carolina Department of Transportation (SCDOT) has released its initial projections of the financial impact of COVID-19, indicating a decrease in agency revenues based on expected reductions in gas tax and car sales tax receipts.
SCDOT reported the financial forecast at the May 21, 2020, Transportation Commission meeting. Lower traffic volumes and a drop in car sales in the state are expected to result in a $78 million revenue reduction during the period April through July 2020. This short-term forecast predicts $54 million less in gas tax revenue and a $24 million decrease in vehicle sales taxes through July 2020.
SCDOT has been monitoring traffic volumes across the state since the beginning of this public health emergency. After significant drops in volumes in March and April, traffic has been increasing during May. Compared to 2019, March traffic volumes were down approximately 20%, April traffic volumes were down approximately 45% and traffic is down approximately 25% for May.
“We expect traffic volumes to continue to climb as the state emerges from the pandemic, and we expect the revenue gap to close over time,” said Secretary of Transportation Christy Hall. “Like everyone else trying to forecast the economic impact of this virus, it is unknown whether it will take six months or more than a year for revenues to return to pre-pandemic levels. At this time, we are conservatively planning for a longer recovery period that may last as long as two years with a potential $293 million total impact. We will update that projection as we see what unfolds through this July.”
In the interim, the Secretary has cut the internal operating budget of SCDOT by 11% for the remainder of this state fiscal year to meet the lower revenue forecasts and to ensure that all other mission-critical operations continue as planned.
“We are confident that the planning and preparation we have done will allow us to manage through this with no disruption to our core priorities including the road and bridge projects currently under construction,” Hall added. “We will closely monitor the situation over the next several months and plan to continue to advance our road and bridge program aligned to the revenue stream.”