Closing frenzy in Legislature

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The $5 billion state budget adopted in a mad frenzy this week would have been a bloody disaster except for this: Uncle Sam decided to play Santa Claus to revenue-starved states as part of the newly passed $350 billion federal tax cut and jobs creation package. But if South Carolina's economy doesn't improve dramatically over the next year, the budget problems will only be worse when legislators meet in January.

State lawmakers did a poor job over the past few months of setting priorities. But they must be given credit for using the one-time federal gift to shore up two critical areas in this state: Medicaid and education.

No bragging should be heard from state legislators, however. Most of them had a hand in creating the budget crisis by using nonrecurring revenue during the boom times of the 1990s to create new programs, expand existing ones and create huge property tax rebate programs. As predicted, when the economy turned sour and less revenue poured in, the state budget was badly out of balance.

The budget mess hasn't been solved, and the pain has only been lessened because of the one-time federal bailout for states. All of this should give Gov. Mark Sanford and state legislators an incentive to spend the next seven months searching for a lasting solution.

Sanford, who took office in January, has argued that South Carolina's income tax is too high, thereby hurting state residents and discouraging businesses from creating jobs. Late in the session, Sanford said he would support a much-debated 53-cent per pack cigarette tax increase if lawmakers would marry it to a cut in the state income tax. Sanford's plan went nowhere this year.

The governor should use the next few months to explain his tax plan and lobby for it. On its face, the plan makes sense, but the governor has to sell not only legislators but also skeptical state residents.

The reality is this, as Sanford and some legislators have said: South Carolina must grow its way out of this economic slump. That requires making this state a friendly environment for business and industry.

South Carolina will get about $260 million in federal funds over the next few months. In decisions made late last week, legislators decided to use $127 million for Medicaid, thus stabilizing that program for one more year, and $62.6 million to increase the base student cost to $1,777, according to a spokesman for the state Budget and Control Board. About $65 million has not been allocated.

The additional funding for local schools will prevent the devastating cuts that would have occurred under earlier versions of the budget, but public schools still will not be funded adequately. Many local school boards surely will raise local property taxes to help close the gap.

This legislative year ended with a few successes and much work left on the table for next year. Legislators failed most notably in not meeting the budget crisis head-on, but they were saved from total disaster by a federal handout.