Panel Approves $30M in ‘Other’ Fund Hikes

April 7, 2011

Investigative Reports

Print Friendly, PDF & Email

The NerveA special legislative committee created to oversee state agencies’ requests to increase “other” funds spending has approved nearly $30 million in increases so far this fiscal year, records provided to The Nerve show.

Since it began considering requests in November, the eight-member Joint Other Funds Oversight Committee has rejected about $4.3 million in increase requests, or 12.5 percent of the total sought, according to Office of State Budget records.

The committee issued its strongest “no” in a meeting last week.

The S.C. Department of Health and Environmental Control wanted to use $100,000 of $5 million generated from a 50-cent cigarette tax increase to help churches and public schools become smoke-free.

The agency also asked to use another $100,000 of the cigarette tax increase money to help doctors and other health care providers better teach patients to kick the smoking habit.

In hiking the cigarette tax from 7 cents per pack to 57 cents last year, lawmakers earmarked a portion of that money for smoking cessation programs. But some oversight committee members in last week’s hearing weren’t happy with how DHEC wanted to use the money.

“Looking through a lot of this, to me it’s just a lot fluff, to be honest with you – feel-good stuff,” Rep. Brian White, R-Anderson and committee co-chairman, said during the hearing.

White said he believed that the money would be better spent on an existing telephone counseling service for smokers, known as the “S.C. Qutiline,” rather than “putting signs up at a school” designating it as smoke-free.

Replied Wanda Crotwell, assistant to DHEC Commissioner Earl Hunter and a member of the agency’s executive management team, “It’s not fluff to us because if we can get school campuses smoke-free, that’s a huge step in the right direction.”

In the end, however, the committee in a voice vote approved only $850,000 of the $5 million total request to support the “S.C. Quitline.” Besides rejecting the separate $100,000 increase requests targeted to churches, schools and health care providers, the committee also nixed $900,000 for marketing programs for smoking cessation and $600,000 for a youth smoking prevention program called “Rage Against the Haze.”

In years past, DHEC and other state agencies typically could get mid-fiscal-year increases in other funds approved quietly through the Office of State Budget.

But the process now for the first time is more open – at least for this fiscal year. Since November, the committee has met four times to consider increase requests from eight state agencies.

The Office of State Budget has the final say on any increase requests presented to the committee, Les Boles, the state budget director, told The Nerve in a written response this week. He didn’t immediately answer, though, whether his office has signed off on the committee’s recommendations from November through last week.

Boles earlier told The Nerve that his office had rejected certain increase requests before the committee began meeting, though he added that the “bulk” of those requests were approved.

Before the committee was formed, the Office of State Budget had approved a total of more than $91 million in increases in other funds for this fiscal year for 26 state agencies, records show. The increases ranged from $7,694 for the S.C. Department of Alcohol and Other Drug Abuse Services to nearly $27 million for the state Department of Mental Health.

Other funds represent more than one-third of the total $21 billion-plus state budget, yet few people, including lawmakers, know what’s in that part or the fact that it typically grows during a fiscal year by hundreds of millions of dollars.

With cuts in recent years in their general fund budgets, agencies have been relying more on other funds.

The adjusted other funds part of the budget for this fiscal year, which started July 1, stands at $8.1 billion, nearly $360 million more than what was initially appropriated by the S.C. General Assembly.

Lawmakers in recent years have lowballed that part of the budget, often giving a false impression that they are cutting spending.

The Nerve first reported last year that since July 1, 1999, state agencies collectively had spent $3 billion more than what was initially appropriated to them by the General Assembly.

Other funds include such things as college tuition and fees, lottery proceeds, a portion of the state sales tax earmarked for K-12 education, gasoline taxes, motor vehicle license fees and court filing fees.

College tuition and fees, which are set by legislatively appointed boards of trustees, make up the biggest portion of other funds. In fiscal 2007, for example, those fees totaled nearly $1.4 billion, a Senate Finance Committee study found.

Tuition in recent years has been skyrocketing, though the S.C. Budget and Control Board last year tried to slow that growth by putting a moratorium on certain construction projects if tuition was raised above certain levels.

Other funds are separate from two other money pots in the state budget: general funds, which are made up mainly of personal and corporate income taxes, and most of the state sales tax; and federal funds.

The adjusted total budget for this fiscal year is $21.8 billion, including $5.08 billion in general funds and $8.6 billion in federal funds.

Created last year through a state budget proviso (70.27), the Joint Other Funds Oversight Committee is taking a deeper look into other funds. Besides White, the other oversight committee members include committee co-chairman Sen. Nikki Setzler, D-Lexington; Sens. David Thomas, R-Greenville; Mike Fair, R-Greenville; and Kevin Bryant, R-Anderson; and Reps. Murrell Smith, R-Sumter; Michael Pitts, R-Laurens; and Jim Battle, D-Marion.

The oversight committee has recommended approval of most of the proposed increases it has considered, starting with a $1.5 million increase in November for the S.C. Department of Public Safety for a computerized records tracking system in troopers’ cars with money funneled through the state Department of Transportation.

Besides the $850,000 increase approved last week for DHEC, the committee also has recommended more than $27.5 million in other fund increases requested by various other agencies. Those include, according to Office of State Budget records:

  • $20.5 million to the Commission on Higher Education for endowed chair programs, which are funded in part with state lottery proceeds, at the University of South Carolina and Medical University of South Carolina;
  • $2.87 million to the S.C. State Housing Finance and Development Authority for its mortgage down payment assistance program;
  • $1.9 million to the S.C. Judicial Department in lease proceeds from the department’s computer automation program;
  • $989,020 to the Commission on Higher Education for a statewide electronic library program for 58 public and private colleges, funded through membership dues and fees for services;
  • $605,500 to the State Treasurer’s Office from investment management fees and other “special revenue funds” authorized by state budget provisos, to be used to offset general fund cuts in “critical” operations;
  • $325,000 to the Department of Archives and History through the auction sale of Confederate money, the proceeds of which would be used to expand the agency’s storage capacity for rare records; and
  • $317,181 to the Comptroller General’s Office, $250,000 of which is a transfer from the S.C. Budget and Control Board to reimburse the office for a portion of payroll costs related to the implementation of a computer finance system for state agencies.

The committee at last week’s meeting narrowly approved the $317,181 request by the Comptroller General’s Office after several lawmakers raised questions about the payroll expenses for the computer finance system.Other than gutting the $5 million request by DHEC, however, the committee thus far has rejected a portion of only one other increase request – $139,500 to the State Treasurer’s Office.

And the committee apparently will not be dealing with the bulk of the projected $360 million increase in this fiscal year’s other fund budget for the state. In his written response this week to The Nerve, Boles said the committee would not consider it because “these funds have already been appropriated by the General Assembly.”

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