Charleston County Residents Might Be Responsible for $600+ Million Interest on I-526 Project
A major infrastructure issue under discussion in Charleston County could see residents shouldering over $600 million in interest costs. The matter, revolving around a potential penny tax extension, is set to be voted on by the Charleston County Council this coming Tuesday.
The Referendum Proposition
The proposed referendum aims to extend a penny tax initially passed in 2016. Council leaders have framed the tax extension as crucial to raise necessary funding for the $2.3 billion Mark Clark Extension Project.
One council member predicted that the county might have to amass more than $600 million in debt to cover interest costs on the $1.8 billion it would also have to borrow for its share of the road extension project.
“Council member Larry Kobrovsky said, “We have an awesome responsibility … to see to all the traffic needs of the county. I’m a fiscal conservative and a conservationist, and this fails on both hands. Those in favor of it think you’re either for this or you want everyone to sit in traffic, but I don’t think this is the only way to do that. Even if we pass this, it will be 15 years before anyone starts feeling any sort of alleviation from it.”
The Funding Breakdown
In 2019, South Carolina’s infrastructure bank agreed to cover $420 million for the I-526 extension project. Since then, however, the total project cost has escalated to its current $2.3 billion estimate.
This substantially increased estimate leaves Charleston County taxpayers potentially on the hook for about $1.8 billion and an additional $648 million in associated borrowing costs.
Pending Projects from 2016 Referendum
Controversially, the new tax proposal would also fund numerous “carryover projects” from the 2016 sales tax, which have been left incomplete due to an absence of sufficient funds.
This allocation amounts to nearly 5% of the revenue, equating to roughly $282,223,000, based on information provided by Charleston County Chief Financial Officer Mack Gile. The significant carryover projects include U.S. Highway 78, Palmetto Commerce Parkway, and Dorchester Road.
Council Divides on the Matter
Tying these unfinished projects to the contentious Mark Clark project has evoked diverse responses and led to a divide within the council. Some council members have vociferously criticized this approach, considering it poor governance, while proponents believe the combined approach aids in preventing division among county residents.
What Is at Stake?
The Mark Clark Extension Project represents more than a third of the costs for road projects contained in the proposed referendum. Additionally, various other crucial projects have been included, ranging from constructing multi-use paths and pedestrian/bike bridges to much-needed flood mitigation improvements and widening roads.
If the proposed referendum goes onto the ballot in November and fails, not only does the Mark Clark project remain unfunded, but it would also be the case for the other listed projects, including those added by the county council prior to its final passage.
