Gov. Henry McMaster will ask lawmakers to approve $1.1 billion in additional state funding to salvage road construction projects threatened by inflation-driven cost overruns across South Carolina.

The proposal, part of McMaster’s 2026 executive budget expected next week, would represent one of the largest single-year infrastructure investments in state history. Without the funding, dozens of projects could face delays or cancellation as construction costs continue rising faster than original estimates.

“We cannot allow critical infrastructure improvements to stall because of market forces beyond our control,” McMaster said during a Columbia press briefing Tuesday. “South Carolina’s economic future depends on maintaining our commitment to these projects.”

The funding request comes as several high-profile Charleston-area road projects have already experienced significant cost increases. The I-526 completion project, originally budgeted at $420 million in 2019, now carries an estimated price tag exceeding $550 million. Similarly, the Mark Clark Expressway improvements have seen costs jump nearly 30 percent since initial approval.

State transportation officials blame the increases on steel and concrete price volatility, supply chain disruptions, and labor shortages that have plagued construction nationwide since 2021. The South Carolina Department of Transportation estimates current projects statewide are running an average of 25 percent over original budgets.

“Every month we delay means higher costs,” said Rob Thompson, deputy secretary for engineering at SCDOT. “The governor’s proposal gives us the resources to move forward rather than watching these numbers climb even higher.”

McMaster’s budget will propose drawing the additional funding from the state’s record $3.2 billion surplus, generated largely through higher-than-expected tax collections and federal recovery funds. The administration argues using surplus money avoids new taxes or borrowing while addressing immediate infrastructure needs.

The proposal faces scrutiny from fiscal conservatives in the Republican-controlled General Assembly, who have previously opposed large spending increases even during surplus years. Several lawmakers questioned whether the state should commit such massive resources to offset what some consider temporary market disruptions.

“We need to be very careful about creating expectations that the state will always bail out projects when costs rise,” said Sen. Tom Davis, R-Beaufort, who chairs the Senate Finance subcommittee on transportation. “There has to be accountability for these massive overruns.”

Charleston-area lawmakers generally support the proposal, citing the region’s critical infrastructure needs and economic growth pressures. The metropolitan area has added more than 150,000 residents since 2010, straining roads designed for much smaller populations.

Rep. Nancy Mace’s successor in the Statehouse, Rep. Russell Ott, D-St. Helena Island, said the funding could accelerate several Lowcountry projects that have languished due to cost concerns.

“Our infrastructure was already behind where it needed to be,” Ott said. “We cannot afford to let it fall further behind because of inflation.”

The proposed funding would supplement the existing $2.8 billion in transportation funding approved through the state’s Roads Bill in 2017. That legislation, passed after years of political battles, raised the gas tax and established dedicated revenue streams for road improvements.

Transportation officials say the new money would primarily target projects already under contract or in advanced planning stages. Priority would go to interstate improvements, major arterial roads, and safety upgrades with the highest traffic volumes.

Charleston area projects that could benefit include the long-awaited I-26/I-526 interchange reconstruction, Highway 17 widening through Mount Pleasant, and bridge replacements on several major thoroughfares. The region currently has $800 million in active or planned road projects, according to SCDOT records.

Business groups have endorsed the proposal, arguing that delayed infrastructure improvements cost more in lost economic activity than the state investment required. The Charleston Metro Chamber of Commerce estimates that traffic congestion already costs the regional economy $400 million annually in lost productivity.

“Every day we wait, businesses make decisions about where to locate based on our transportation network,” said Bryan Derreberry, the chamber’s president. “This investment protects our competitive advantage.”

Environmental groups worry the additional funding could accelerate projects without proper review of alternatives or mitigation measures. Some have called for more emphasis on public transit and other transportation options beyond road construction.

The proposal will face its first test when McMaster presents his budget to the General Assembly in January. Legislative leaders have not committed to supporting the full amount, though early reactions suggest broad agreement that additional transportation funding is necessary.

“The number is eye-catching, but so are the cost overruns we’re seeing,” said House Ways and Means Chairman Murrell Smith, R-Sumter. “We need to examine this carefully and make sure taxpayers are getting value for their investment.”

State budget writers will also need to balance transportation funding against competing priorities, including education, healthcare, and tax relief measures that have strong legislative support. The General Assembly is expected to take up the budget proposal when the 2026 session begins in January.

Construction industry representatives say delays in approving additional funding could force contractors to abandon projects or demand even higher prices to account for continued inflation risks. Several major firms have already requested contract modifications on current state projects.

The governor’s office plans to release detailed project lists and funding allocations when the full budget proposal is unveiled next week. Transportation officials will brief legislative committees throughout January on specific cost increases and project timelines.

For more coverage of state budget and infrastructure issues, visit our Politics & Government section.