A plan announced Tuesday by Gov. Mark Sanford and House of Representatives leadership continues the funny-money approach to financial planning that now plagues the state. It is more of the same faulty policy-making that has resulted in per-student school allocations reverting to levels of almost a decade ago, unsafe roads, overburdened prisons, soaring college tuition, raids on trust funds, deficit spending and a loss in state services to the taxpayers.
Sanford and 90 of the 124 House members say they are in agreement on an election-year plan to reduce the 7 percent state income tax by .225 percent annually for 10 years. The goal is to reduce it to 4.75 percent.
Previously, the governor acknowledged that this cut in revenue would have to be balanced by an increase elsewhere. He had proposed an increase in the state tax on cigarettes to fill the void.
Now, with no public discussion that we know of, a different plan has been agreed to and is promised for post-haste delivery to the state Senate.
The senators should ask more questions. They might be able to see that the plan is a house of cards liable to fall flat.
The new proposal's very foundation is flawed. It is to be paid for by growth. If we have learned anything in the last decade it should be this: Growth is very costly. It does not come free. Growth demands more in state and local services -- more schools, roads, inspectors, you name it. So, if the state revenue stream does indeed increase due to growth, that money is needed for existing and expanded services.
Another pillar of the new plan is that the income tax cut would kick in only in years the state Board of Economic Advisers predicts a 2 percent growth in state revenue. That is faint comfort, considering the board's predictions for the past 12 years were never right, according to a study by The State newspaper.
It is foolish for the state to cut taxes based on a projection. If the projection is wrong, the revenue is lost but the expenses remain. What happens?
Presumably, the legislature likes the regular diet of midyear budget cuts that have wreaked havoc on state services over the past three years.
Also undermining this new plan are reports that South Carolina's tax rates -- when all exemptions and deductions are considered -- are not nearly as onerous or out of kilter as advertised.
Sanford is convinced this plan will help small businesses and attract new business into the state. If so, he needs to find a more reliable source of money to pay for the tax cut. Our bet is that businesses would be better served by improved services, such as better public schools and a top-tier university. Recent history has taught us that when the legislature cuts revenue, those very services suffer. We need to get away from the failed theory that you can always get something for nothing.