GN - State begins work on budget
Proposals to cap college tuition and raise the tax on cigarettes may be among the amendments offered Tuesday in the House, as debate begins on a plan to cut $500 million from the state budget, legislative leaders said Monday.
While leaders urged members to keep amendments to a minimum to expedite the process, some House members are considering amendments to cap tuition and to increase the tax on cigarette packs, said Rep. Dan Cooper, chairman of the House Ways and Means Committee.
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Gov. Sanford: Budget sequel no one wanted must be solved
It’s been said that those who don’t study history are doomed to repeat it — which to me is just another way of saying there’s no education in the second kick of a mule.
While it’s good advice no matter how you say it, it’s unfortunately advice that too many in Columbia ignore all too often when it comes to the financial health of the state. Given what’s happening on Wall Street right now and with our own state budget, it’s worth taking a minute to remember how we got to where we are and to ask for your help in making sure that these mistakes aren’t repeated yet again.
Right now in Columbia, we’re dealing with budget shortfalls that were predictable, preventable and guaranteed to happen with the run-up in state spending. State government spending has grown more than 40 percent over the last four years — well ahead of the growth in South Carolina’s underlying economy and well ahead of the growth of people’s paychecks over the same time.
The result is that at a time where budgets of agencies like the Department of Corrections and others are already stretched to the limit, another $415 million is going to have to be trimmed from state government. What has happened in the credit markets will mean the size and duration of the budget cuts yet to come will grow. It now seems that legislative leadership is finally moving toward the same page many of their rank-and-file members were already on in saying that making those cuts across the board is no way to run government. As we soon deal with this budget situation, three real challenges lie before us, and I ask for your help because we believe with the right approach there can be a silver lining to today’s dark clouds. It is an opportunity to force long-term changes that will keep us from repeating these same mistakes.
First, we can’t think short-term and paper over problems in the hope that this economic downturn will be short lived. It won’t. The reason for our spending fights with the Legislature lie in the simple reality that growing government faster than the economy always produces problems and because we knew the business cycle was not dead. Things don’t go upward forever and our grandparents had it right when they talked about saving for the rainy days that always come. I believe this downturn, and consequently our budget challenges, will be prolonged and as a consequence it is very important that we not paper over shortfalls with things called annualizations. In laymen’s terms this means borrowing from Peter to pay Paul, and it creates budgetary holes for the following year. Instead, where we do make cuts they should be done as families and businesses do and make them real, rather than just cuts that exist only on paper.
Second, this should serve as an opportunity to deal with the capital side of the budget and other permanent liabilities, because they ultimately have an impact in the operating portion of our budget. The Comptroller General and I have tried several times — and been voted down — to put a hold on capital projects, given the increasingly stormy financial waters. Simply put, we didn’t think it made sense to build a host of new buildings when we’re facing shortfalls that make it tough to maintain what the state already has. In the same vein, I’ve asked that we reconsider the new automatic cost of living increase given to state retirees, since doing so rests on a new and higher assumed rate of return of eight percent. The law was changed this summer to give retirees an immediate benefit based on future predictions, even though, well before the current meltdown in the financial markets, people like Warren Buffet were saying this kind of return was impossible. It amounts to $2.7 billion that South Carolina taxpayers will one day have to come up with if the projections don’t materialize.
Third, it is essential we use today’s financial challenges as an opportunity to force changes to our governmental structure. Redundancy in the way that our government works in South Carolina means government costs us almost 140 percent of the U.S. average. We’re the only state in the country with a Budget and Control Board that performs the Executive branch functions handled by the other 49 governors in the country. We will always over-spend if we keep doing things the way we’ve been doing them.
These will be tough budget times over the months and I believe several years ahead. Whether or not these problems are papered over or addressed for the long term will be directly driven by the degree to which each of us makes our voice heard. Please take the time to engage in the debate before us.
Mark Sanford, a Republican, is governor of South Carolina.
Lawmakers must look at entire taxing system
Reasons abound for lawmakers to revisit the state’s 2-year-old property tax reform legislation. But they shouldn’t approach the issue piecemeal. That’s what got us in this predicament in the first place.
Point of sale reassessments, which are kicking in for the 2008 tax bills, are the latest complaint lightning rod. New market-value assessments come into play now when property changes hands or is extensively renovated.
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Editorial; P&C: Follow Sanford Fiscal Fix
Last week’s news for state government was even worse than expected, with a budget shortfall now estimated at $415 million. As the Legislature works on a solution in preparation for a special session, it should follow the governor’s lead.
Even those legislators who have routinely opposed Gov. Mark Sanford’s efforts for budget frugality would be hard pressed to deny that he has better credentials as a fiscal hawk than anyone in the General Assembly. Too bad the Legislature has generally ignored his efforts to curtail state spending during his years in office.
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Barrett:Nuclear renaissance can fuel S.C. economy
Energy independence is the greatest challenge of the 21st century. We must not be intimated by this challenge, but rather inspired by the opportunities it affords and confident that the American spirit of innovation will enable us to find a practical, permanent and renewable solution.
No option can be left off the table. While new technologies such as wind, solar and hydrogen energy are being developed and perfected, we must turn our attention to the domestic resources readily available today.
Much of the talk recently has centered on offshore drilling and tapping domestic oil supplies. Undoubtedly, drilling is a key component to solving our energy problem, but what if I were to tell you that right here in South Carolina we have the potential to further develop an energy resource that is more abundant than oil, cleaner than natural gas and cheaper than solar power? What if I were to tell you that developing this technology would create hundreds and possibly thousands of new jobs?
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Lee Bandy: Spratt presses Bush on China
October 4, 2008 — U.S. Reps. John Spratt, D-S.C., and U.S. Rep. Howard Coble, R-N.C., fired off a letter to the president this week, urging rapid action on illegal Chinese imports which they say are costing Americans their jobs.
The two members are co-chairmen of the Congressional Textile Caucus.
They maintained in a joint letter to the president that the action is needed to stem an expected surge in imports after Jan.7.
“The need for stronger enforcement of trade with China has never been more evident,” Spratt said.
“From problems with lead and other toxic substances in children’s toys to recent trade cases that have revealed dozens of illegal subsidies, China is the leading violator of U.S, trade laws,” Spratt pointed out.
Coble warned that China’s behavior has severe consequences for American workers.
The U.S. says China’s unfair trade practices have resulted in the loss of 1.5 million U.S. manufacturing jobs.
“All told, over one million workers are at risk if China attempts to once again monopolize the U.S. market due to the removal of quotas,” Spratt and Coble said.
In this week’s two votes on the administration’s economic rescue package, Spratt voted for the measure twice. Coble opposed it on the first vote, and after intense lobbying, changed to support the measure voted on Friday.
AP: Sanford Ready to Make Cuts
COLUMBIA — Gov. Mark Sanford is asking state agency heads to meet in Columbia on Tuesday to identify programs that could be cut from the state budget.
The State newspaper of Columbia reported that Sanford wrote directors Thursday, asking them to prepare a list of the “least-vital” 10 percent of their budget.
The governor has asked lawmakers to return to Columbia and trim at least $400 million from the state budget because of revenue problems. Sanford wants to prepare a list of cuts lawmakers could consider before the Nov. 4 election.
The Board of Economic Advisors meets Wednesday and could cut its revenue estimate for the state by 4 percent or more. The board cut the estimate by 2 percent in July.
The Budget and Control Board already has ordered 3 percent cuts in spending.
The State: SC delegation together on bailout
WASHINGTON — Rep. Gresham Barrett jumped on board the bailout express Friday as all six House members from South Carolina helped Congress pass a $700 billion financial rescue bill.
The House voted 263-171 for sweeping legislation to authorize the U.S. Treasury to buy or insure bank assets whose values have plunged in the country’s economic turmoil.
“We have come up with an incredible piece of legislation that addresses not just Wall Street, but Broad Street, where all the automobile dealerships are located in my hometown,” U.S. House Majority Whip James Clyburn told reporters after the historic vote.
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P&C, Kropf: Barrett Says He’ll Back Plan
Economic necessity and tax breaks helped make a $700 billion banking system bailout attractive enough for U.S. Rep. Gresham Barrett, R-S.C., to change his no vote to a yes.
Barrett, an Upstate Republican, said Thursday night he plans to vote for the package today. Barrett was the only member of the South Carolina delegation voting against it last week.
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GN, editorial: Economic Questions Left Unanswered
With the looming $700 billion bailout of the financial industry, the next president is likely to have his hands tied in trying to reduce the federal budget deficit or prevent the approaching fiscal calamity in the Social Security and Medicare programs. Even before the bailout, however, neither John McCain nor Barack Obama offered detailed ideas for getting the federal government’s fiscal house in order.
Neither candidate is talking about the tough choices necessary to bring the federal budget back into balance while ensuring the long-term solvency of Social Security and Medicare.
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