The state's continuing bad fiscal news confirms the wisdom of the comprehensive review of state spending and agency operations undertaken by Gov. Mark Sanford. There's been a great deal of conversation about streamlining state government, improving accountability and eliminating duplication over the years, but this administration appears particularly willing, even eager, to do something about each.
So far, the administration has recommended remedies including the merger of state health and human services agencies; the sale of surplus property, such as the port facility at Port Royal; and an increased contribution from public utility giant Santee Cooper. The necessity of fiscal improvements was underscored last week by new revenue projections.
On Friday, the state learned from the Board of Economic Advisers that it can expect a revenue shortfall of $108 million during the current fiscal year. The best that can be said for that dismal report is that it's better than last year's, which required some $500 million in midyear cuts.
The Budget and Control Board apparently will be forced to deal with the imbalance this week, and the only option available to it is an across-the-board cut. The state also faces a $177 million deficit from previous budget years.
Agencies have withstood continued cuts to the point that some essential services have been jeopardized. The Department of Corrections and the Department of Mental Health, for example, were provided increased allocations at the beginning of the current budget year, in recognition that their situations were even more precarious than the state's fiscal circumstances.
Faced with the state's longstanding and continuing financial problems, Gov. Sanford, his Cabinet and his Commission on Management, Accountability and Performance (MAPS) have undertaken an important review of state agency operations, administrative structure and programs, which already has produced some results.
Commerce Secretary Bob Faith, for instance, has cut $2.3 million off his agency's payroll. Gov. Sanford has called that an example for other agencies to follow, and Friday's BEA estimates say that will probably be the case, whether or not they are so inclined.
Meanwhile, the Department of Corrections is looking at alternative sentencing for nonviolent offenders to reduce its primary expense, and to allow offenders to return to work and make restitution to victims and pay child support, as required. The agency also is increasing food production for inmates, thereby cutting a drain on the general fund.
The administration's major effort to reduce waste, fraud and abuse has been undertaken by the MAPS commission. Headed by former gubernatorial candidate Ken Wingate, its members are businessmen who bring a different viewpoint to their analysis of state government. The commission will soon produce recommendations for improving state government, including cost cuts.
The state's non-recurring financial problems have forced some discipline in the Legislature. It has, for example, sharply reduced its use of revenue for continuing expenses. Legislators may actually have been on the way to confronting the state's Medicaid crisis when the federal government provided a surprise allocation late last session that temporarily took them off the hook. It now appears they won't be able to rely on an improved revenue picture to more generally resolve the state's budget difficulties.
By next session, legislators are expected to begin considering government restructuring proposals from the governor. The state's ongoing financial difficulties should make them receptive to change. Putting additional agencies under the authority of the governor will provide for heightened accountability, key to ensuring their economical operation.
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