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Rhetoric vs. Reality: Did the debate over budget vetoes really matter?

web posted July 30, 2012

GUEST OPINION - If you followed the debate over the state budget and the governor’s budget vetoes, you might have had the impression that there was genuine disagreement about the size and scope of government. There was no such disagreement. True, the governor issued $57.1 million in line item vetoes. But that amounted to less than one percent of the budget. And while 33 of the governor’s 81 budget vetoes were sustained, these were almost all small-dollar items. Altogether, the General Assembly sustained about $4 million worth of budget vetoes – a miniscule .019 percent of the budget.

That’s too bad – this would have been a great year for a knock-down, drag-out debate over the growth of South Carolina state government. The legislature’s original $23.6 billion spending plan – well over $1 billion larger than last year’s budget – positively brimmed with favors for special interests, gratuitous government expansions, and massive funding hikes for clearly non-core programs and agencies. The governor’s vetoes touched some items in these categories, but left most of them alone.

So, at the beginning of the veto debate, we had a $23.641 billion budget (that’s billion with a “b”). At the end of the debate, we had a $23.637 billion budget.

Local Pork Projects. In her veto messages, the governor explained that projects or events she vetoed would benefit very specific communities or organizations and don’t merit funding from the state. Accordingly, she vetoed several projects worth, in total, about $1.2 million.

Yet the budget allocated a much larger amount – $5 million – to seven regional economic development organizations, some of which just happen to have legislators on their boards, and all of which, by definition, have only regional significance. These allocations went unchallenged by the veto pen.

Programs that “Don’t Work.” In her veto messages, the governor insisted that state government had an obligation to, if necessary, eliminate programs that “don’t work.” So she vetoed the Writing Improvement Network, S.C Geographic Alliance-USC, and the Certificate of Need program, totaling just over $3 million. She also vetoed the Arts Commission’s entire budget; a $200,000 proviso for the SC Manufacturer’s Extension Partnership; and the Sea Grant Consortium. These vetoes were worth just over $2.5 million.

One wonders, then, why a $10 million tax break for Hollywood producers went untouched, since “film incentives,” as these tax breaks are called, indisputably don’t work: indeed they generate a net loss in revenue equal to $0.81 on every dollar. The legislature and governor also left in their $8 million subsidy program for destination-specific tourism marketing, and $50,000 for the notoriously over-budget and underperforming Farmers Market.

Also: funding for the above-mentioned Manufacturing Extension Partnership – $682,000 for a consulting firm that lobbies state government – remained unchallenged. Other projects escaped unchallenged: $250,000 for the McCord Center Safety Improvement Project, for example, or $393,000 for the National Flight Academy.
Higher Ed Earmarks. Tuition keeps rising at the state’s public universities even as the universities spend more and more public resources on projects that have little or nothing to do with the education of young people. It was encouraging, therefore, to see that Gov. Haley vetoed earmarked funding to higher education institutions worth about $6.4 million. These included a Clemson University Plant Technology Lab, a College of Charleston Digital Technology Pilot Project, and four others.

Other higher education earmarks, however, went untouched. For instance: $3.5 million for a training facility at Central Carolina Technical College, $1 million for a “research vessel” at Coastal Carolina University, $2 million for a science center at the College of Charleston.

Excessive Growth. Several agencies and programs saw vast increases from the previous year’s budget. The governor certainly vetoed a few of these gratuitous budget hikes. Examples: $3 million for the Rural Infrastructure Fund, $500,000 for Department of Agriculture marketing and branding, and the $10 million from the Mortgage Settlement Fund (supposedly for the purpose of aiding victims of mortgage fraud) going to the Deal Closing Fund (that is, corporate welfare).

Yet massive increases drew no criticism from the governor. The Department of Commerce saw an increase of nearly $20 million from last year. Even if the governor’s $10 million veto had been sustained, the agency’s budget would have still increased by $10 million. Additionally, the governor included in her executive budget $3.2 million for Marketing and Promotion in the Department of Agriculture, a 189 percent increase from last year. Lastly, although she vetoed the extra $10 million to the Closing Fund, she conceded that the fund already has $15 million – a $5 million increase from last year.

In short: Don’t be fooled. This year’s budget debate wasn’t about whether government should grow by billion-dollar leaps and bounds. That question was already decided, and it wasn’t in decided in taxpayers’ favor.

Dillon Jones

Editor's note: Dillon Jones is a policy analyst at the SC Policy Council

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