With an ever-improving revenue picture for South Carolina, state
legislators might be tempted to loosen their fiscal constraints with new
plans for state spending. Gov. Mark Sanford persuasively argues for a more
responsible course.
The Legislature borrowed an estimated $500 million from trust and
reserve funds in 2001, 2002 and 2003, as state revenues fell short of the
mark. Now that revenues are rising, the governor recommends that the
Legislature repay what is owed those funds, which were established for
designated purposes.
Gov. Sanford reminded legislators of that duty Tuesday in comments
during a visit to a low-level radioactive waste disposal site near
Barnwell. The Legislature used $90 million from the Barnwell clean-up fund
during the tough budget years. The governor wants to begin repaying that
money, starting with $25 million this year. He said:
"Barnwell is a perfect real-world example of why keeping your word is
so important. We've made a promise to protect the environment with this
trust fund, but borrowing from it over the years has severely limited our
ability to keep that promise. That's something that we believe places an
unfair burden on future generations of taxpayers, and it's an example of a
larger problem that you see throughout both federal and state government
with respect to trust funds."
The governor also recommends repayment to the Pinewood Trust Fund, also
for environmental cleanup, and to reserve funds, including that serving
the state health plan. Legislators borrowed $130 million from that reserve
fund; the governor would restore $45 million this year from increased tax
collections achieved by the Department of Revenue.
Additionally, he urges spending $49 million to pay off bonds and reduce
the long-term debt. Comptroller General Richard Eckstrom has urged early
debt repayment, noting that state indebtedness is at a record level of
$2.5 billion, and may threaten the state's AAA credit rating, which
ensures favorable interest rates on state borrowings.
The Legislature followed the governor's lead last year and used an
unexpected surplus to pay off a $155 million budget deficit. That decision
wasn't easy, given the shortage of state revenues in the preceding three
budget years. But it was an important recognition of fiscal responsibility
and legislative accountability.
With the improved revenue picture, an extra $190 million may be
available this budget year and next, beginning July 1.
The Legislature should restate its commitment to fiscal discipline by
endorsing the governor's recommendations to "get our state's fiscal house
in order." Legislators should continue to show restraint on spending
surplus dollars.