The "C" fund program operates as a partnership between South Carolina's counties and the SC Department of Transportation. It provides funding from a part of state gasoline tax revenue for the improvement of state, county and city roads as well as other local transportation projects.
The program first grew out of efforts in the 1940s to pave rural dirt roads that were a part of the state system.
Funding increases from "C" funds
The "C" fund program distributes funds to each county based on population, land area and rural road mileage. The program also allows for counties that contribute more to the "C" fund than they collect to receive a donor bonus allocation.
The "C" fund portion of the state gasoline tax was 2.66 cents per gallon before a new state law caused it to begin increasing annually in FY 2018-2019. The gasoline tax is 3.325 cents per gallon. In FY 2021-2022, when the new calculation of the tax is fully phased in, the portion will be 3.99 cents per gallon.
Counties must use the additional funds that result from the increase exclusively for repairs, maintenance and improvements to the state highway system. For FY 2019-2020, the state is distributing $96.5 million in total. Some of the counties with the highest apportionments during this time, not including the donor bonus, are Greenville County with $4.9 million, Richland County with $4.2 million and Horry County with $4.1 million.
Awarding "C" funds for projects
Each county has a County Transportation Committee. The CTC selects and approves projects to be supported by "C" funds. The CTCs also develop procedures for accepting applications for eligible projects as well as ranking projects and determining which it will fund. There are no requirements in state law for how each CTC awards projects.
In most cases, the legislative delegation of that county appoints the committee's membership. However, in some cases, county council serves as the CTC. This is the case in Abbeville, Chester, Clarendon, Jasper, Lexington and York counties. In Allendale, Barnwell, Beaufort, Berkeley and Dorchester counties, the county council appoints the members of the CTC.
Restrictions on "C" funds
CTCs must use at least 25% of each county's "C" funds for construction, improvements and maintenance of infrastructure that is part of the state highway system. Also, CTCs must use proceeds from the additional funds that come out of the cents-per-gallon increase that began in FY 2018-2019 for repairs, maintenance and improvements to state highways.
Beyond those restrictions, CTCs can use the funds for local road projects. They may also carry forward any uncommitted funds from one year into the next, as long as the amount does not exceed 300% of the county's total "C" fund apportionment for the most recent year.
The "C" Fund Program webpage includes links to the transportation plans for each of the counties.