General Assembly Not Hurting for Money

February 10, 2011

Investigative Reports

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The NerveThe S.C. Senate and House collectively had nearly $19 million in their general fund accounts as of Jan. 20 – enough to easily meet their operating budgets for the remaining five months of this fiscal year with millions left over, state financial records show.

In fact, the Senate started the fiscal year on July 1 with $2.3 million more in its general fund than what was appropriated for the entire year, and the House had a $2.8 million cushion, according to The Nerve’s review of cash status reports from the S.C. Comptroller General’s Office.

And those are just general funds. The Senate listed about $1.6 million in other fund accounts and nearly $20,000 in unspecified federal funds as of Jan. 20, while the House had about $132,000 in other funds, records show.

The General Assembly’s relatively flush accounts stand in stark contrast to a budget hole for next fiscal year that is projected to be more than $800 million. Two agencies – the departments of Corrections and Health and Human Services – formally asked the S.C. Budget and Control Board on Tuesday to run multi-million dollar deficits for the remainder of this fiscal year.

The House and Senate have special accounts that most people, including lawmakers, probably don’t know about. The Senate, for example, had balances in the following other fund accounts as of Jan. 20 according to its cash status report:

  • Reserve account: $198,493.60
  • Sale of assets: $18,192
  • Operating revenue: $13,823.32
  • Medical malpractice: $2,218.48
  • Historic Trust Fund: $251.44

Most of the Senate’s other funds – nearly $1.3 million as of Jan. 20 – were listed under two “increased enforcement collections” accounts, which, according to a state budget proviso (90.16), funnels extra state tax dollars collected by the S.C. Department of Revenue to various agencies.

The state budget designates that money for reapportionment, or the redrawing of legislative district lines as a result of last year’s U.S. Census.

Among its other fund accounts, the House as of Jan. 20 listed nearly $26,000 in operating revenue and about than $11,000 in rent collections from the Blatt Building on the State House grounds, where House members’ offices are located.

The House and Senate also had more than $73,000 and $61,000, respectively, as of Jan 20 in accounts labeled “education lawsuit,” likely referring to the nearly 18-year-old school funding case pending for before the S.C. Supreme Court.

Questions Unanswered

The Nerve last week attempted to get answers on the purpose and source of House and Senate other fund accounts, but neither House Clerk Charles Reid nor Senate Clerk Jeff Gossett responded to written questions.

Besides Reid and Gossett, the Legislature’s top four leaders – Senate President Pro Tempore Glenn McConnell, R-Charleston; Senate Finance Committee Chairman Hugh Leatherman, R-Florence; House Speaker Bobby Harrell, R-Charleston; and Dan Cooper, R-Anderson and the House Ways and Means Committee chairman – did not respond to written messages last week from The Nerve.

McConnell told his colleagues on the Senate floor last April that the legislative branch is a “core function of government,” and that “we have been through almost all of our reserves” in dealing with cuts to the Senate’s general fund budget in recent years.

Declaring the need to save money, the House furloughed itself for three weeks last session, while the Senate shut down for one week.

McConnell announced later that all Senate staffers would be furloughed for eight days this fiscal year to help cover additional estimated repair costs to the Gressette Building where senators’ offices are located, and Harrell recently announced that the House wouldn’t meet for two weeks this session.

Contacted last week, S.C. Comptroller General Richard Eckstrom told The Nerve that general fund appropriations for the House and Senate are drawn down “anytime those entities direct my office to make their disbursements.”

“We process their individual disbursements using the state’s central accounting system, and when we process their disbursements, we reduce their available general fund balances on a dollar-for-dollar basis,” he said.

Eckstrom said he didn’t know the purpose or origins of the Legislature’s other fund accounts, referring those questions to Reid and Gossett. But he said that based on his review of the chambers’ financial reports, it didn’t appear that many of those funds have been used in some time.

“Unlimited” Transfer Authority

Eckstrom also said the House and Senate have “unlimited authority” to carry forward unspent general fund money to the following fiscal year.

Both chambers have carried forward millions in recent years, according to records at Eckstrom’s office and chamber budgets submitted as part of former Gov. Mark Sanford’s proposed executive budgets.

The Senate, for example, carried forward $2.9 million in fiscal year 2006; $5 million in fiscal year 2007; $5.9 million in fiscal year 2008; nearly $7.3 million in fiscal year 2009; and about $5.3 million last fiscal year.

The ratified general fund budget for the Senate last fiscal year was $8.4 million; the carry-forward portion represented nearly 63 percent of the original appropriation.  From fiscal years 2006 through 2009, the carry-forward percentage ranged from 26 percent to 59 percent.

Eckstrom’s year-end report for last fiscal year showed that the Senate spent about $2.3 million more than what was budgeted for the chamber, despite a mid-year budget cut of about $746,000, carrying forward nearly $2.3 million into this fiscal year.

Gossett, the Senate clerk, did not provide specifics about the additional expenditures after asked by The Nerve last year in a state Freedom of Information Act request.

State agencies receiving general funds were subject last fiscal year to mid-year budget cuts totaling 9.04 percent.

The Senate was budgeted $12.3 million for this fiscal year, though it will receive an additional $1 million for reapportionment, giving it is largest ratified total budget in at least 12 years, The Nerve reported last year.

With the nearly $2.3 million in carry-forward funds, it started this fiscal year with $14.6 million in its general fund, records show.

In comparison, the House carried forward about $1.6 million in unspent general funds in fiscal year 2006; $2.7 million in fiscal year 2007; $2.8 million in fiscal year 2008; $3.3 million in fiscal year 2009; and approximately $1.1 million last fiscal year, records show.

Those amounts represented about 7 percent to 24 percent of the general fund appropriations for those years.

The House last fiscal year was budgeted $16.1 million, though even with a carry-forward of nearly $1.1 million, it spent about $13 million after a $1.4 million mid-year reduction, records show.

The House’s general fund budget for this fiscal year is $16.3 million, but after carrying forward $2.8 million, it started the fiscal year with $19.1 million, a 17 percent hike over its appropriation, records show.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org.