Hefty Agency Budget Hikes Requested for FY 2014

October 22, 2012

Investigative Reports

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Budget HikeFive state agencies, including three colleges and universities, would see their general fund budgets more than double next fiscal year, under their proposed spending plans released Friday by the Office of State Budget.

So far, the Office of State Budget (OSB) has publicly released proposed fiscal 2014 budgets of 49 of more than 100 state agencies, divisions, college and universities tracked by the office, which helps the Governor’s Office and S.C General Assembly prepare their annual budgets.

The 2013-14 fiscal year starts July 1. Under state law, agencies must submit their proposed budgets for the upcoming fiscal year to the governor – in recent years by way of the Office of State Budget – by Nov. 1.

The 46-member Senate and 124-member House typically have bypassed the traditional budget process when it comes to their respective chamber budgets, often waiting until after the legislative session starts before publicly releasing their proposed spending plans – and in recent years, quietly slipping in budget hikes for themselves, as The Nerve has repeatedly pointed out.

The Senate, however, broke with that tradition last month, submitting its proposed fiscal 2014 budget to the Office of State Budget. According to documents filed by the chamber’s main administrator, Senate Clerk Jeffrey Gossett, the proposed fiscal 2014 appropriation for the chamber would be slightly more than $13.2 million, the same as this fiscal year’s “actual” budget.

But the total ratified budget for the Senate for this fiscal year was $12.8 million, according to OSB records – nearly $414,000 less than the listed “actual” appropriation. Given that it’s not uncommon for state agencies’ budgets to be adjusted upward during a fiscal year after dipping into reserves or receiving other revenue, the proposed budget increases for next fiscal year likely would be larger in a number of cases when compared to this fiscal year’s ratified budgets.

The total state budget, which this fiscal year stands at $23.6 billion, is made up of three pots of money:  general, federal and “other” funds, which include such things as tuition, lottery proceeds, 1 cent of the 6-cent state sales tax, and various fees and fines charged by state agencies.

The Nerve’s review found that of the 49 agencies whose proposed fiscal 2014 budgets were released Friday by the Office of State Budget, the following five are requesting general fund increases of more than 100 percent (budget figures and percent changes are rounded):

FY13 (“Actual”) FY14 % Change
University of South Carolina – Beaufort $1.75 million $5.16 million 195%
Francis Marion University $12.63 million $36.79 million 191%
College of Charleston $22.9 million $66 million 188%
S.C. Inspector General’s Office $311,344 $833,972 168%
State Election Commission $4.56 million $10.92 million 138%

Of the 49 agencies, 26, or 53 percent, are requesting general fund increases next fiscal year, with 14 seeking hikes of double digits or higher, The Nerve’s review found.

When total budgets are considered, the following five agencies are requesting the biggest-percentage increases for next fiscal year:

FY13 (“Actual”) FY14 % Change
State Election Commission $5 million $12.57 million 151%
S.C. Inspector General’s Office $339,899 $833,972 145%
Lander University $41.39 million $96.68 million 134%
Francis Marion University $56.37 million $85.39 million 51%
S.C. Treasurer’s Office $5.58 million $7.87 million 41%

For the colleges and universities in the above lists, deferred maintenance and major renovation or construction projects make up large chunks of their requests for more funding. Lander University, for example, is seeking nearly $50 million in state bonds to replace its student center and to renovate the campus library; Francis Marion University is requesting $20 million in non-recurring general funds for a new education and business school on campus.

The Election Commission wants $5 million more next fiscal year and unspecified recurring annual appropriations in following years to replace the state’s current electronic voting system, a project, which, according to budget documents filed by Marci Andino, the commission’s executive director, is required under federal law, though it is five to six years away.

State Inspector General Patrick Maley, whose office was created last year through an executive order by Gov. Nikki Haley, is requesting an additional $500,000 mainly to hire five full-time auditors/investigators, which, if approved, would more than double his current staff.

State Treasurer Curtis Loftis in budget documents said he is not requesting any more general funds next fiscal year. But he is asking to increase his other fund appropriation by $1.28 million to add an eight-member consulting staff that would convert an old computer system used for managing the state’s investment and debt services to work with a new software accounting system being implemented statewide.

Lillian Koller, director of the S.C. Department of Social Services, wants an additional $4.5 million in general funds next fiscal year to complete development of an automated child-support enforcement system. Because of years-long delays, the state to date has been penalized by the federal government more than $104 million, according to budget documents filed by Koller.

The agency’s proposed general fund budget next fiscal year would increase about 7 percent to about $133.5 million, though its total budget would increase by about 1 percent to about $2.17 billion.

Two other multi-billion-dollar state agencies – the departments of Education and Health and Human Services – also are requesting both general fund and total budget increasesin fiscal 2014.

The Department of Health and Human Services is requesting a general fund increase of nearly $186 million, or about 17 percent, over this fiscal year’s “actual” appropriation, bringing its proposed 2014 general fund budget to $1.28 billion. Its proposed total budget would increase about 9 percent to $6.5 billion.

Agency Director Tony Keck in budget documents said that even if South Carolina opts out of an expansion of Medicaid programs under the federal Patient Protection and Affordable Care Act, commonly known as “Obamacare,” new federal mandates are projected to cost the state an additional $69.7 million in fiscal 2014. And $64 million more is needed next fiscal year to keep up with a projected 2.8 percent growth in monthly Medicaid rolls, he said.

The Department of Education is proposing to increase its general fund budget next fiscal year by $87.4 million, or 4 percent, to $2.29 billion; and its total budget by about 1 percent to $3.8 billion. Superintendent of Education Mick Zais in budget documents said an additional $34 million is needed to buy school buses, with $29 million more proposed for school bus shop operations.

The proposed budgets by state agencies are expected to be considered by Haley, who likely will release her proposed executive budget for fiscal 2014 in January. State law requires the governor to present a proposed budget to the Legislature within five days after the beginning of each annual legislative session.

State law also requires that the Legislature’s budget-writing committees – the Senate Finance and House Ways and Means committees – hold joint public hearings on the governor’s spending plan within five days of receiving it, The Nerve has previously reported.

But state lawmakers have routinely ignored that part of the law.

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