We're relieved to see that at least
some state leaders appreciate the desperate plight of South
Carolina's state agencies and public school and are willing to back
off earlier, intractable stances on taxes.
Last week, the Senate Finance Committee voted to raise the
sales-tax cap on cars, from $300 to $2,500, generating as much as
$93 million next fiscal year. By eliminating a tax break on
manufacturing equipment, the committee found another $53 million
equipment in the 2003-2004 budget. The committee also agreed to
eliminate a small sales tax break for citizens 85 and older. That
would make another $5.9 million available.
The committee's chairman, Hugh Leatherman, said he hoped the
additional money would keep schools from having to lay off teachers,
increasing the number of students per class.
Actually, the state Department of Education estimates that
Palmetto State schools would be $240 million short if the House
version of the budget were to stand. So, even with the Senate's
newfound cash, public schools estimate they would need another $88
million or so to hold their own.
For the record, the Senate Finance Committee plan would give
schools $1,894 per student, $151 more than under the House's budget.
As Sen. Nikki Setzler, D-West Columbia, put it, "You're still going
backwards."
Backward, as in 1995, the last time the General Assembly
allocated so little for public education.
The Senate showed its flexibility in earlier agreeing to raise
state cigarette taxes to 53 cents a pack in order to help pay for
Medicaid. Without that tax increase, the state would be
$171 million short next year, and since every state dollar spent
on Medicaid produces $2.25 in federal money, the impact is
major.
Gov. Mark Sanford has said he would support raising the cigarette
tax, provided it were tied to a gradual reduction in the state
income tax. The governor came to Rock Hill last week as part of his
campaign to push for income-tax reform. Although we think he is
overestimating the impact of cuts in income taxes, we appreciate
that it was a principal plank in his election. He is showing
leadership, and he deserves credit for taking on the GOP-controlled
House, which remains opposed to any tax increase -- no matter how
necessary.
Faced with a half-billion dollars in projected shortfalls next
year, the state will have to tighten its belt under the best of
circumstances. Most citizens understand the needs for cuts. But when
so many agencies and schools are on a starvation diet, telling them
to lose weight is not the answer.
