Surplus money must
be used to repay trust funds
IT’S HARD TO remember the last time South Carolina’s fiscal house
was in order.
Long before the economy soured, legislators had fallen into the
irresponsible practice of using surplus money that wouldn’t be
around the next year to start new programs and dole out tax
cuts.
Now that we are finally pulling out of the bad times, lawmakers
are in grave danger of falling right back into that bad habit, which
increased the pain of the shrinking budget and will do the same if
it happens again.
When lawmakers return to work in January, they will have $99
million of this one-time money burning a hole in their pockets. The
money is from an annual reserve fund, which was designed to help pay
the bills in case of a mid-year budget shortfall. For the past three
years, officials have had to tap that fund to keep the government
running; but since there was no shortfall last year, the Legislature
is free to spend the money.
Gov. Mark Sanford has signaled he wants to use it to start paying
back $187 million that lawmakers raided from trust funds to pay the
bills through the shortfall.
Of course, few people want to do that, because it doesn’t buy
anything now. Meanwhile, the state needs new school buses and
bridges and school buildings, and state buildings are crumbling
under neglect.
Even more immediately, the state needs more Highway Patrol
troopers and after-school and summer school programs and prison
guards. Some legislators want to throw caution to the wind and spend
the one-time money shoring up those programs, or giving pay raises
to struggling state employees.
Any talk of using this pot of money left over from the 2004
fiscal year to pay for ongoing operations in the 2006 fiscal year
should be a non-starter. That is precisely the kind of action that
hastened and lengthened our fall into fiscal crisis; repeating that
pattern will have the same results. There is no question that the
economy eventually will hit another soft spot. The only question is
how soon. We simply cannot afford to set ourselves up for a repeat
of the recent crisis.
The more difficult question is whether to buy the buses and road
repairs and buildings — all one-time expenditures — or to pay back
the trust funds.
It’s tempting, looking at our growing infrastructure needs, to
take the first approach. After all, as one legislator put it, the
debts are money the state owes itself — money that will just sit
unused in trust funds.
That’s true — just as it once was true in Washington, back when
the Congress started “borrowing” money from the Social Security
trust fund. And now we face the choice of breaking our promise to
retirees who can’t survive if we do, or of raising taxes
tremendously to pay the bill. Bills — even those the government owes
itself — eventually come due.
Even more significantly, our government is built on public trust.
Raiding trust funds, then refusing to pay them back, is a perfect
way to erode that trust.
Yes, we have urgent needs in our state, and paying back trust
funds rather than starting to meet those needs will cause pain. But
if there’s no pain in having raided trust funds, then there will be
nothing to stop legislators from doing it again when times get bad —
or even when times aren’t so bad, but they just want to spend more
money.
Use the surplus to pay back the trust funds. We can’t allow it to
become easy to break with the public trust. |