State Agencies’ Budgets Grew in FY 10

November 30, 2010

Investigative Reports

Print Friendly, PDF & Email

The NerveThe S.C. Senate ended last fiscal year with $4.5 million more in general fund revenues and nearly $2.3 million more in operating expenses than what was budgeted initially for the 46-member chamber, a review by The Nerve has found.

The Senate was among a dozen state agencies that recorded more general fund revenues at the end of the fiscal year on June 30 compared to what was initially appropriated for those agencies, according to the year-end general fund report by S.C. Comptroller General Richard Eckstrom.

Nine of those agencies, including the Senate, also spent more than what was initially budgeted for them, the report shows.

The dozen agencies’ budgets grew despite the fact that lawmakers have sliced $1.6 billion out of the state’s general fund budget over the past two fiscal years. Lawmakers returning to session in January are expected to chop up to another $1 billion out of the approximate $5 billion general fund budget, mainly because of a loss of federal stimulus dollars.

The state’s total ratified budget for this fiscal year is $21 billion, which includes federal and “other” funds, including college tuition and various fees and fines.

The Senate was budgeted $8.4 million at the start of last fiscal year but had a listed year-end general fund appropriation of nearly $13 million, an increase of nearly 54 percent.

The chamber spent approximately $10.7 million by the end of the fiscal year, a jump of nearly 27 percent over its ratified budget; and carried over the nearly $2.3 million balance into this fiscal year, according to Eckstrom’s report.

The Senate in 2009-10 recorded a transfer of nearly $5.3 million in unspent revenues – representing about 63 percent of its ratified budget – from fiscal year 2008-09, which was partly offset by a $745,000 reduction mandated under mid-year, across-the-board budget cuts by the S.C. Budget and Control Board, records show.

Ironically, Senate President Pro Tempore Glenn McConnell, R-Charleston, in September chided S.C. Department of Health and Human Services Director Emma Forkner over her concerns that her agency will run a projected deficit this fiscal year of more than $200 million.

“Frankly, I am tired of state agencies spending too much and then asking for forgiveness and permission to run a deficit they knew was coming,” McConnell wrote in a Sept. 29 letter to Forkner. “I prefer you balance your books and make the hard choices on the front end.”

Under a state budget proviso (70.12), the Senate and House are allowed to transfer any unspent revenues from the prior fiscal year. Generally, another budget proviso (89.28) allows state agencies to transfer up to 10 percent of their ratified appropriation minus any mandated reductions for the current fiscal year.

In addition to receiving carried-over general fund revenue last fiscal year, the Senate also was budgeted to receive $1 million more through another proviso (90.21). That money, generated through “increased enforcement collections” by the S.C. Department of Revenue, is designated for reapportionment, or the redrawing of legislative district lines as a result of the U.S. Census.

The dozen agencies showing general fund budget increases last fiscal year relied mainly or in part on unspent general fund revenue carried over from fiscal year 2009, according to The Nerve’s review of records provided by Eckstrom’s office.

Of the approximate 90 state agencies, offices or divisions listed in those records, more than a third recorded revenue transfers from fiscal year 2009, The Nerve’s review found.

In all, state agencies in fiscal year 2010 transferred nearly $219 million in unspent revenue from the previous fiscal year, records show.

Senate Staff Raises

So how did the Senate spend its additional millions last fiscal year? Some of it might have gone to salary raises for Senate staffers, according to records reviewed earlier by The Nerve.

The Nerve reported in a series of stories on legislative staff salaries, published the week of Nov. 8, that that seven employees received double-digit salary increases at the start of this fiscal year. The series also revealed that virtually all the Senate staffers whose salaries exceed $50,000 were given raises in each of the past two fiscal years.

The Senate’s ratified $13.3 million budget for this fiscal year, which includes another $1 million designated for reapportionment, is its largest ratified budget in at least 12 years, The Nerve found in an earlier review.

McConnell and Senate Finance Committee Chairman Hugh Leatherman, R-Florence, didn’t mention the staff salary hikes when pushing earlier this year for the multimillion-dollar budget increase for their chamber.

Still, despite the budget hike, McConnell announced in an Oct. 21 letter to Senate members that all Senate staffers would be furloughed for eight days this fiscal year to make up for a projected $500,000 in repairs to the Senate Gressette Office Building on the State House grounds.

Neither McConnell nor Leatherman responded last week to written or phone messages from The Nerveabout the chamber’s year-end figures for 2009-10. Senate Clerk Jeffrey Gossett, the chamber’s chief administrator, also didn’t reply to written questions.

Other Bigger Budgets

The Senate wasn’t the only state agency that recorded a large gap between initial and year-end appropriations last fiscal year, The Nerve’s review found. The S.C. Department of Commerce, for example, was budgeted about $5.9 million at the start of last fiscal year but listed a year-end appropriation of $17.8 million, a hike of nearly $12 million, or 200 percent.

The agency listed a carry-over transfer of $16.4 million in unspent revenues from the prior fiscal year, which was partly offset by a mid-year reduction of $461,529 and another $4 million transfer, according to records from Eckstrom’s office.

Year-end expenditures for Commerce were listed at $7.1 million, an increase of more than $1 million, or 20 percent, compared to its ratified budget. The agency carried over a $10.7 million balance into this fiscal year, records show.

Commerce spokeswoman Kara Borie did not respond to written questions last week from The Nerve.

Following is a list of other state agencies that recorded larger appropriations at the end of last fiscal year compared to the beginning of the year, according to Eckstrom’s report:

Social Services – $112.6 million (initial budget), $125.7 million (year-end budget);

  • Parks, Recreation and Tourism – $26.2 million, $35.6 million;
  • Health and Human Services – $824.4 million, $832.3 million;
  • Budget and Control Board (including various divisions) –$38.7 million, $47.4 million;
  • Transportation – $121,453, $5.1 million (Most of its budget comes from federal and other funds)
  • Election Commission – $1.5 million, $4.9 million;
  • Adjutant General – $6 million, $7.9 million;
  • Treasurer’s Office – $2 million, $2.8 million;
  • Labor, Licensing and Regulation – $1.9 million, $2.2 million;
  • Health and Environmental Control – $107.4 million, $107.5 million

Virginia Williamson, the Department of Social Services’ chief attorney, told The Nerve in a written response last week that the bulk of the approximate $13 million increase in expenditures at her agency last fiscal year was for expenses related to “behavioral health services in group homes and child caring institutions” that were no longer covered by federal Medicaid payments because of federal rule changes.

A total of nearly $25 million in unspent state revenues was transferred into the agency’s general fund last fiscal year, which was partly offset by $11.5 million in mid-year budget cuts, according to records from Eckstrom’s office.

The Nerve first reported that DSS and the departments of Corrections and Health and Human Services were heading toward deficits this fiscal year, and also was the first to report specifically about a $200 million potential shortfall this fiscal year at HHS.

HHS officials say their expenditures have skyrocketed with exploding Medicaid rolls resulting from the recession, while, at the same time, the Legislature has raided their reserve accounts for other agencies.

Records from Eckstrom’s office show that although HHS’ general fund revenues grew last fiscal year by a net of nearly $8 million with a transfer of unspent fiscal year 2009 revenues, the agency ended 2009-10 spending $218 million less than what was originally budgeted for its general fund.

HHS spokesman Jeff Stensland told The Nerve last week that difference occurred because lawmakers required HHS to return $225 million to the state’s general fund after the agency was designated to receive federal stimulus money for Medicaid programs.

The agency is expected to ask the state Budget and Control Board at its Dec. 14 meeting to run a $228 million deficit this fiscal year.

“There is a collective responsibility for this deficit,” Stensland said.

At the Treasurer’s Office, Deputy Treasurer Scott Malyerck told The Nerve that his agency’s initial ratified 2009-10 budget was hit with a $179,459 mid-year cut. The net approximate $800,000 increase resulted from an additional $970,470 in “pass-through monies” to the S.C. Student Loan Corp. for the Teacher Loan Corp., he said.

Labor department spokesman Jim Knight told The Nerve that the approximate $300,000 net increase for his agency were carryover funds from a nearly $1 million supplemental appropriation in fiscal year 2008 for urban search and rescue teams.

Other agencies, such as the Department of Parks, Recreation and Tourism, did not respond last week to written questions from The Nerve.

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