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Governor Ignores Three-Fourths of Budget in Lashing Senate

When Gov. Nikki Haley took the S.C. Senate to task earlier this week for not falling in lockstep regarding her plan to dole out some tax relief, she left a little something out – about $17 billion, or three-quarters of the state’s budget.

Haley harped on the Senate repeatedly during a press conference Tuesday at the State House, stating that South Carolinians deserved $93 million in tax relief, an amount equivalent to 1.6 percent of the proposed $6.1 billion general fund budget for the next fiscal year being debated by the S.C. Senate.

“The budget is the ultimate expression of our priorities as a government, as a state,” she said. “It is time for us to show South Carolina – and everyone else – that in our state jobs, the people and our businesses come first.”

In her remarks, Haley did not mention the remaining 73.5 percent of the projected $23 billion overall budget for the 2012-13 fiscal year, which, in addition to general fund dollars, is made up of federal funds and “other” funds.

The irony is that while the general fund has fluctuated between the $5 billion to $6.7 billion since fiscal year 2000-01, federal funds and other funds have both grown sharply, which is why South Carolina’s budget has ballooned more than 46 percent, from $15.1 billion over the past decade alone.

Federal funds have jumped from $4.5 billion in 2002-03 to a proposed $8.7 billion for 2012-13, while other funds have increased from $5.1 billion 10 years ago to a projected $8.2 billion for the coming year, which begins July 1.

More than half of the federal funds South Carolina receives go to Medicaid, while much of the rest goes to state transportation and education. Other funds are generated annually through such things as fees, fines and other assessments levied by state agencies, along with tuition charged by colleges and universities.

The bottom line: Under the current budget being debated in the Senate, general funds have increased 12 percent over the past decade, while federal funds have mushroomed 92 percent during the same period and other funds 61 percent.

Yet Haley concentrated solely on general funds, even taking time to discuss the rise in that category since she first took office as a legislator in 2005.

“When I was in the Legislature, and I came into the House in 2005, we had a $4 billion budget; in 2006 we had a $5 billion budget; in 2007 we had a $6 billion budget,” she said. “Every year we watched it grow.”

A glance at an historical analysis of state spending produced by the state Budget and Control Board shows that while Haley identified the trend correctly, her first figure was off.

In fiscal year 2004-05, Haley’s first as a lawmaker, the state budget included $5.22 billion in general fund dollars. The following year, the general fund portion increased to $5.62 billion; while in 2006-07 it was $6.11 billion.

While recognizing the Senate for approving a $15 million small-business tax cut earlier this session, Haley implored the Senate for more:

“How much longer are we going to put jobs last; are we going to put people last; are we going to put small businesses last?” she asked. “1.6 percent of a $6 billion budget – there is no way you can make the people of South Carolina more proud than to do this.”

While Haley herself failed to provide examples when asked during the press conference of where her administration had offered cuts, her proposed budget for the coming fiscal year completely eliminates both state and federal funding for the S.C. Arts Commission, and state funds for S.C. Educational Television.

Haley said it’s up the Senate to determine what stays and what goes.

“They’ll say, ‘Well, where do we cut?’ Well, you know what, fellas, that’s your job.” she said. “That’s your job to figure out where to cut. We showed you where we cut; we’re happy to show you our executive budget. But you gotta roll your sleeves up.”

While Haley’s budget does propose phasing out the state’s corporate income tax and lowering the state’s individual income tax, it also recommends a number of items some might not consider essential, including:

  • Doubling the S.C. Department of Commerce’s Deal Closing Fund to $10 million;
  • Raising the S.C. Department of Agriculture budget by $3 million, with half of that serving as annually recurring money to advertise South Carolina agricultural products; and another $1 million targeted as a one-time infusion to help shore up the S.C. State Farmers Market; and
  • Boosting the S.C. Department of Parks, Recreation and Tourism’s budget by more than $8 million, or 13.6 percent, including an 18.7 percent jump in state funding.

At the same time, Haley did not include raises for state workers or teachers, though those were later written in by lawmakers.

The Senate has had the added luxury of having more money to work with, as the state Board of Economic Advisors has come out with rosier revenue projections for the state since Haley released her budget in January.

Reach Dietrich at (803) 779-5022 ext. 110, or kevin@thenerve.org.

State Agencies Other Funds Legislation General Assembly Budget Accountability Transparency

S.C. Senate S.C. ETV 2012-13 budget S.C. Arts Commission Gov. Nikki Haley