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Article published Jan 26, 2003
Smith's plan would slow down the growth in state
spending
Much of the reason behind South Carolina's state
budget crisis is overspending by lawmakers, not just during lean years but
during the previous economic boom.
When state revenues were growing,
lawmakers invented new spending programs to spend all of it, and then some. Each
year's growing revenue wasn't enough to fulfill their wish lists of state
programs, so they created programs that depended on future revenue growth to pay
for them.
They even started annual spending programs that were funded only by
one-time funds, money available only that year. They put off permanent funding
decisions until the next year.
They spent all the money the state had and
more. So when the inevitable economic downturn came, the state suffered.
Not
only did revenue not grow, it declined. Lawmakers have had to cut spending for
three years in a row. Workers are being laid off. Programs are being
cut.
That's why House Speaker Pro Tem Doug Smith, R-Spartanburg, has been
pushing for a law that would limit how much lawmakers can increase state
spending each year.
His drive is likely to be adopted by a tax study
committee operating under House Ways and Means Committee Chairman Bobby Harrell.
And the proposal received a boost from Gov. Mark Sanford in his State of the
State address last week.
The legislation will be introduced soon and is
likely to be similar to a law in Colorado. It would limit the annual growth in
state spending to population growth plus inflation. One possibility would limit
the annual increase in state spending to the percentage increase in state
population plus the consumer price index or 6 percent, whichever is greater. In
recent years, state spending has grown by as much as 9 percent in a single
year.
In a growing economy, when state revenues rose higher than this limit
on state spending, the state would be restricted in how it could use the surplus
money. It could return the funds to taxpayers, save it for lean years, spend it
on infrastructure improvements or use it to respond to natural disasters. The
limits in the bill could only be overridden by a two-thirds vote of both houses
of the General Assembly.
Such a limit would prevent state government from
growing to the point where it takes an ever-expanding economy to support
it.
It would impose a measure of discipline on lawmakers to prioritize state
spending and live within the state's means.
This is a worthwhile measure to
control the growth of the government. The governor and lawmakers should tailor
the law to the needs of this state and enact it.