The values we uphold in the state budget

By: HUGH LEATHERMAN

Guest columnist

Chicken Little again is roosting at the State House in this election year, with certain politicians up for re-election using the discredited “The sky is falling” campaign slogan. When you hear dire warnings about the state budget, you know the politicians have reached rock-bottom in trying to make themselves relevant.

The truth is that the House and Senate have adopted budget bills that have similar goals: to meet the needs of the people without burdening the people with higher taxes. While there are differences between the two bills, the two documents are more similar than not, and I do not expect protracted disagreements as the conference committee irons out differences.

First, the big picture about taxes.

This Senate budget does not raise taxes and indeed sets aside $515,396,670 in continuing property tax relief. We enacted a separate income tax cut for small businesses amounting to more than $22 million as well. This action is designed to promote jobs and expansion in small business, which employs a majority of South Carolinians.

This is a continuation of a commitment the Legislature made years ago to take our state from one of the higher taxing states to one of the lowest.

On a per capita basis, South Carolina ranks 43rd among the 50 states in tax burden. Back in 1985, according to the Federal Bureau of Census, we ranked 27th. Back then, state tax collections in our state amounted to 7 percent of per capita income, compared with 6.1 percent nationwide. In other words, our tax collection rate was higher than the national average.

Through many tax cut initiatives, the Legislature has lowered South Carolina’s percentage to 6.1 percent, compared with a national average of 6.3 percent.

Some of these initiatives were indexing income tax brackets to stop income tax creep, reduction of the corporate income tax from 6 percent to 5 percent, elimination of the gift and estate taxes and property tax cuts to homeowners that exempted $100,000 of value for school operating purposes.

Over the years we also raised the homestead exemption for senior citizens from $20,000 to $50,000.

Because the Legislature has limited the growth of government by passing tax cuts over the years, total expenditures from the general fund grew from 1995 through 2005 at an average annual rate of only 2.44 percent. That’s a lower average annual rate than inflation and population growth.

The proposed Senate budget for the next fiscal year continues our push for improved public education while repaying all of the trust funds that were depleted during the national recession.

The budget fully funds the General Reserve Fund, which acts as a hedge against bad budgetary times.

The Senate version of the budget also establishes a fund that is limited to refilling the General Reserve Fund, buying school buses or hurricane preparedness. Gov. Mark Sanford requested additional spending for hurricane preparedness, given the increasing activity of hurricane season. It is prudent to have a disaster reserve account in place so that our response is rapid and adequate.

We all have a tendency to dive into the numbers when writing a budget and missing what a budget is all about. It’s about people.

The budget for the state Department of Education is just a group of words and numbers. But to many young families it’s a smaller class size for their elementary school student and an opportunity to learn more and get back on grade level.

The Department of Health and Human Services budget is just a group of words and numbers. But to many families, it is an opportunity for their elderly mother to receive nursing home care.

The Highway Patrol budget is just a group of words and numbers. But to a parent with a teenager in a disabled car on the side of a highway, those blue lights are a welcome sight.

The Department of Natural Resources budget is just a group of words and numbers. But to lovers of the outdoors, it’s about fathers taking their children hunting and fishing.

Yes, our annual budget is more than just a document. It is a reflection of who we are and what we value as South Carolinians. And we must never lose sight of that fact.

Sen. Leatherman is chairman of the Senate Finance Committee.