Posted on Mon, Feb. 21, 2005


Legislature likely can bank on revenue leader’s pledge
Under Maybank, agency is on target to raise $90 million as promised

The Associated Press

A year ago, state Revenue Department director Burnet Maybank was offering legislators an odd deal.

He wanted $9 million to hire people to enforce the state’s tax laws and promised to quit if he didn’t raise at least $90 million.

On target to raise that and more, the lanky Charleston lawyer is credited with helping fill a hole in the state’s budget.

The Legislature raised the stakes for Maybank, saying he would have to bring in at least $300 million in regular tax law enforcement collections even before he could begin counting money toward the $90 million goal.

It remained a safe bet, Maybank said.

“We looked at how far the Department of Revenue had fallen off with the collection activity,” he said.

At the same time, he expected a recovering state economy would make it easier for people to pay back taxes. And auditors already had identified several taxpayers who owed the state millions.

“We had several checks from taxpayers of $2 million and up that went into” meeting the goal, Maybank said.

Between July and January, Maybank’s effort had pulled in $56 million — about $3 million ahead of projections. The Revenue Department had collected $216 million, well ahead of a $175 million projection.

State budget writers aren’t expecting a repeat performance. Estimates for the budget year that begins July 1 show Maybank’s increased enforcement efforts will bring in only about $45 million.

The House Ways and Means Committee begins writing its version of the budget this week. Chairman Bobby Harrell, R-Charleston, says agencies were told last year they would not have “Maybank money” in the new fiscal year’s budget. His committee will decide whether to fill those funding gaps or force those agencies to cut spending.

Gov. Mark Sanford tapped Maybank as revenue director in 2002 when the Republican took office. It’s Maybank’s second stint in that Cabinet-level office. He had served in the same job from 1994-98 for former Republican Gov. David Beasley. In between, Maybank practiced regulatory and tax law.

When Sanford was skeptical of Maybank’s proposal while crafting his executive budget last year, Maybank shopped the plan to the state’s chief budget writers.

“He sat in my office last year and said that if he couldn’t deliver on what he was telling us that he would resign,” Harrell said. “I thought that was a pretty strong statement.”

“I think we’ve known Burnie longer than the governor had known him, and we had a great deal of confidence in his ability to deliver on what he said,” Harrell said.

Besides, Maybank had done a similar program years ago under Beasley, Harrell said.

Senate Finance Committee chairman Hugh Leatherman, R-Florence, said he had grown to respect and trust Maybank over the years and was more than willing to take his bet.

“I did not hesitate,” Leatherman said. “He’s the type of person that when he tells you something, he’s got some good basis for telling you that.”

By May, Sanford was worried that Maybank’s plan was turning into a way to pay for day-to-day agency operations. Sanford took the extreme step of showing up at a meeting of the Board of Economic Advisors to ask them not to include the Maybank money in a revised budget forecast. Sanford said Maybank’s cash should be “icing on the cake” and not something to use in basic agency budgets.

At the time, Sanford’s relationship with the Legislature was at a low point. His appearance at the board “was totally inappropriate” and an effort to influence the forecasting group, Harrell said at the time.

It’s not that Sanford didn’t support Maybank’s effort, said Will Folks, the governor’s spokesman. But Sanford disagreed with legislators’ plans to use the money to fill huge holes in Cabinet and non-Cabinet agency budgets. For instance, Maybank money accounted for a fifth — $19.7 million — of the state Department of Social Services budget.

Programs need to be paid for with regular funding sources, Folks said.

“It’s not an objection to the additional revenue. It’s an objection to relying on it to fund critical needs before you’re sure that money is going to be there,” Folks said.

Harrell said there was no doubt the money would materialize.

“We accepted him on his word, and he proved to be good to his word. He’s proved to be more than good on his word,” Harrell said.





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