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Senate has opportunity to improve budget

By: SC Gov. Mark Sanford
web posted April 11, 2007

OPINION – Bolton, our third son, has always liked the story of the three bears -- of the papa, mama and baby bear, and of the porridge being hot, cold and eventually “just right.” Work has begun on the state budget, and because that means hot, cold or “just right” now deals with your money, it’s worth sizing up whether or not you think things are indeed right in this year’s budget.

Our story begins in January when I laid out over 300 pages of budget priorities for the year. Since then I have been largely silent publicly because we hoped we might have more impact on the budget if we worked within the system - rather than by trying to bring pressure on the system as we have in years past.

Given where we are in the budget process, those hopes are quickly evaporating. In fairness to Republican members of the House and their leadership, there was a good faith effort to incorporate some things we thought vital to the taxpayer. But the bottom line, however we got to this point, is that certain things we hoped for in the budget look very unlikely to make their way through the Senate.

So I publicly lay out my take on the budget because, for all intents and purposes, there is only one group really capable of making change to the budget – the taxpayers. You will have a chance to make an impact this week as the Senate takes up the budget, and I’d ask you make your voice heard.

Here is our situation.

In simplest form, we are getting ready to go over a spending cliff, and both the taxpayers and those served by government are going to get hurt in the process.

On spending: We will see another $1.2 billion come into Columbia this year. That could amount to roughly 10 percent spending growth over and above the 22 percent growth in government during the previous two years. It’s been our contention that government should not grow faster than the growth of people’s pocketbooks and wallets. In contrast, our state government spending not only grew much faster than incomes, but faster than the national average and almost double the Southeastern average.

Good times don’t last forever, and yet the excuses as to why South Carolina’s government should continue to grow at this sort of clip seemingly do. Three years ago it was that we had to catch up from previous cuts, two years ago the same, last year yet more of the same – as state government all the while grew from spending $5 billion to nearly $7 billion a year.  

On tax relief: Senator Leatherman has already signaled he is against the idea of cutting income taxes - which is precisely why the House built the income tax cut into their budget. The House viewed it as the only way to force the Senate to deal with the basic concept of returning some of the new $1.2 billion dollars. It is fair enough for members in the Senate to reject so-called “Part II provisos” as the way of instituting an income tax cut. It’s not fair to use that as an excuse not to cut taxes some other way and instead further grow spending.

We proposed returning almost 20 percent of the new money coming to Columbia by cutting income taxes, the House has committed to about 7 percent, and we believe it is crucial for our economy the Senate follow the House’s leadership in this small but important step.

On annualizations: We are moving into a real danger zone, as this practice represents borrowing from Peter to pay Paul. We proposed $73 million in annualizations -- the lowest level in the last 15 years -- the House proposed $242 million, and we would ask the Senate move in our direction to avoid both future cuts to programs people depend on and future tax increases. 

On future liabilities: South Carolina taxpayers are on the hook for $18 billion worth of unfunded political promises. If we do not deal with these issues in a serious way when we have lots of money coming in as we do this year, don’t count on folks in Columbia to deal with them when times are tough. We proposed committing $439 million to this problem. The House ended up at $200 million and we commend them for this start; we now ask the Senate to go still further in paying for these existing promises - before we make new ones.

The economist Milton Friedman once noted that the ultimate measure of government is what it spends. While not the only measure, it is an important one. More than anything this year’s budget will impact future services offered by government and the costs of those services to you as a taxpayer. I hope you will take the time to make your voice heard.

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