Legislators: Law on Budget Process has been Ignored

November 16, 2011

Investigative Reports

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The NerveA handful of legislators surveyed by The Nerve says the General Assembly has failed to adhere to state law when crafting South Carolina’s annual budget.

“It was brought to my attention at the end of the last session that the statutory provisions regarding how the budget was to be drafted weren’t being followed,” said Sen. Mike Rose, R-Dorchester.

Rose said he’s sent a note to the head of Senate research office to find out for certain whether the provisions have been followed and is awaiting a response. “All I can say is, if they were not being complied with, I don’t know why.”

Sen. Shane Massey, R-Edgefield, pulled no punches when asked if the Legislature’s appropriations committees were following the rules and holding joint public hearings on the budget.

“I know (former) Gov. (Mark) Sanford submitted an executive budget to the General Assembly each year. The budget committees in the House and Senate summarily disregarded those executive budgets and came up with their own versions,” he said.

“Since the process starts in the House, the House Ways and Means chairman and staff essentially write the budget,” Massey added. “Ways and Means will then have public meetings with all the agency heads before passing a budget to the full House. Senate Finance will also hold public meetings with the agency heads. I’ve never heard of the two committees meeting jointly, though.”

If true, the lack of transparency raises questions about whether taxpayers’ best interests are being served, and whether special interests are getting an advantage in that individuals and groups are able to unduly influence the budgeting process.

According to state law, the governor is required to prepare a recommended state budget based on a survey of state entities, their spending proposals and financial statements furnished by the comptroller general by Dec. 1 of each year.

Within five days of the legislative session starting, the governor must present his or her budget to the General Assembly. And within five days of that, the Senate Finance Committee and House Ways and Means Committee are required to begin holding joint public hearings on the budget.

The General Assembly may increase or decrease items in the budget bill as it deems to be in the interest of greater economy and efficiency in the public service, the law reads.

The 2012-13 budget year begins July 1.

“I am aware of the law but I don’t recall it ever occurring and I don’t recall anyone pushing for it,” said Rep. Gilda Cobb-Hunter, D-Orangeburg.

Cobb-Hunter said she would like to see joint public hearings on the budget take place both in the interests of transparency and to better educate the residents of South Carolina.

“It’s important because, first, everything public officials do ought to be open to scrutiny; and second, an informed electorate is crucial to the democratic process,” she said. “It makes for better policy, and it removes the notion of the public complaining that ‘nobody told us.’”

Sen. Thomas Alexander, R-Oconee, said as far as he can tell, joint budget hearings have not been taking place.

“Apparently this requirement was around long before the governor’s executive budget, which wasn’t instituted until the mid-1990s during the Campbell administration,” he said.

Alexander said though the General Assembly is not in session, he’s been communicating with officials in an attempt to clarify the situation, and he is hopeful that the matter can be resolved soon.

The Budget and Control Board for decades had responsibility for crafting a recommended state budget. But in 1993, Gov. Carroll Campbell, as part of his effort to restructure state government, signed legislation that transferred that authority to the governor.

Since then, the Office of State Budget, part of the Budget and Control Board, has helped the governor prepare an executive budget in accordance with revenue projections by the state Board of Economic Advisors. The BEA also is an arm of the Budget and Control Board.

However, at least one individual close to the budget process told The Nerve that he was unaware of legislators holding joint public hearings on the budget.

Jeff Schilz, who served as Sanford’s budget and policy director for the final three years of Sanford’s administration, told The Nerve last month that “the only joint (legislative budget action) would be the conference committee after the House has passed the bill and the Senate has passed the bill.

“Really what happens is Ways and Means does their own thing and Senate Finance does their own thing,” Schilz said.

In the end, the Senate Finance Committee Chairman Hugh Leatherman, R-Florence, ends up controlling the entire affair, Schilz added. “I mean Sen. Leatherman drives the budget process.”

Rose, the Lowcountry senator, said he doesn’t think there’s ever been a joint session of the House and Senate appropriations committees.

“I don’t know if it’s a question of blatantly not complying with a statue or that a lot of members of the committee just don’t know that it’s the law,” he said.

Citizen Reporters Brit Adams and Talbert Black contributed to this report.