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The New Media Department of The Post and Courier

WEDNESDAY, FEBRUARY 23, 2005 12:00 AM

Put state's 'fiscal house' in order

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.


This article was printed via the web on 2/23/2005 1:30:18 PM . This article
appeared in The Post and Courier and updated online at Charleston.net on Wednesday, February 23, 2005.