BCB-Like Authority Would Keep Bonding, Procurement Powers

February 18, 2013

Investigative Reports

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BlocksThe Senate Finance subcommittee examining a massive government-restructuring bill would allow a Budget and Control Board-like authority to retain some of the same powers, under a bill version that goes before the full committee Tuesday.

Yet a main sponsor of S. 22 told The Nerve he approves of much of what the subcommittee recommended as a “perfecting amendment” because he believes it strips the Budget and Control Board (BCB) of most of its powers over appropriations.

“In power and scope, the Budget and Control Board as we now know it would no longer exist,” said Sen. Shane Massey, R-Edgefield.

Bill supporters might also like the unaltered language requiring the House Ways and Means and Senate Finance committees to conduct joint public hearings five days after the governor provides lawmakers an annual executive budget.

“We’re not messing with that at all,” Massey said.

Other than the joint budget hearings, the other key areas targeted for creating a Department of Administration included the BCB’s vested power over state contracts, approving debt and authorizing additional spending for agencies running a deficit.

The new authority similar to the BCB, dubbed the “State Fiscal Accountability Authority,” would have procurement and bonding authority under changes to the bill unanimously approved by the subcommittee last Thursday.

The Senate Finance Committee will act on S. 22 Tuesday because it is scheduled for Senate floor debate Wednesday.

“We will certainly move the Department of Administration bill forward,” said Sen. Thomas Alexander, R-Oconee and chairman of the subcommittee charged with examining S. 22. Alexander was not available for additional comment Friday to The Nerve.

The South Carolina Policy Council, the parent organization of The Nerve, has an eight-point reform agenda that, among other things, recommends that lawmakers abide by the required joint-budget hearings, though they haven’t followed the law for decades.

The policy council’s reform agenda also recommends that the governor be fully accountable for the executive branch.

S. 22 originally was referred to the Senate Judiciary Committee, but Senate Finance Chairman Hugh Leatherman, R-Florence and a BCB member, moved the bill to his budget-writing committee last month in a deal reached during  a secret executive session of the Senate.

Gov. Nikki Haley, who chairs the BCB, has made restructuring state government a priority and has said Leatherman’s success in moving the bill to the Senate Finance Committee was a strategy to kill the bill as originally written. Critics contend that Leatherman wanted the bill in his committee so he could attempt to retain some control over state procurement procedures.

The other members of the BCB are state Treasurer Curtis Loftis, S.C. Comptroller General Richard Eckstrom, and House Ways and Means Committee Chairman Brian White, R-Anderson.

The subcommittee’s changes to S. 22 would:

  • Allow the creation of a new State Fiscal Accountability Authority (SFAA), which would replace the BCB. However,  the authority would have the same members as the BCB and could approve state bonds and state purchases – functions that currently are under the BCB;
  • Move loan programs from the BCB’s Office of Local Government to the Rural Infrastructure Authority. The Nerve has reported extensively about the Rural Infrastructure Authority, a recently created state economic-development agency here;
  • Clarify that the S.C. auditor reports to the new SFAA;
  • Establish a state agency deficit limit of $1 million that may be recognized by the Executive Budget Office and reported to the General Assembly;
  • Clarify that a portion of the staff of the Board of Economic Advisors move to the Legislative Fiscal Office to prepare revenue-impact statements on proposed legislation;
  • Create a Department of Information Security; and
  • Add procedures for instances when the director of the Executive Budget Office rejects a request for “other” funds for a review by the new SFAA. The SFAA could overrule the director with a majority vote.

The state functions to be moved to the new Department of Administration would include the Division of General Services, Office of Human Resources, Executive Budget and Strategic Planning Office, the Department of State Information Technology, and the Nuclear Advisory Council.

“General Services is a big one. Human resources is a big one,” said Massey of functions stripped from the BCB.

Massey said the new SFAA would not have the ability to authorize one state agency to borrow money from another one. He also said there will be further discussions about the proposed procurement authority under the SFAA.

“I think we’re getting there,” he said. “All of the other things in the bill are significant steps forward.”

In comparison the Senate Finance subcommittee’s version of S.22, the earlier Senate Judiciary Committee’s version would have:

  • Eliminated the Budget and Control Board (BCB);
  • Created a cabinet-level Department of Administration;
  • Moved all procurement activities to the Department of Administration;
  • Repealed the power of the BCB to loan funds from one agency to another, and would move it to the Legislature; and
  • Given authority to recognize deficits solely to the General Assembly, which was previously vested with the BCB.

Olson can be reached at (803) 254-4411 or curt@thenerve.org. Follow him on Twitter @thenerve_curt and @olson_curt. Follow The Nerve on Facebook and on Twitter @thenervesc.