Click here to return to the Post and Courier

Santee Cooper's land sale should benefit state taxpayers

State Sen. Luke Rankin of Myrtle Beach has a point when he says Santee Cooper's board of directors doesn't have the power to designate which state agencies will get money from its surplus land sales. But his point is a technical one. The General Assembly does have the power and that's the body that the governor has asked, through his budget proposal, to allocate the land sale revenue to help make up the state's huge budget shortfall. Returning an estimated $13 million in revenue from surplus land sales to the state's general fund for the benefit of all the taxpayers is not only the right thing to do, it's what the governor believes state law requires.

Much is being made in the state Senate about a resolution passed by the Santee Cooper board that calls for the sale of property and designates which state agencies would get the funds. The resolution clearly is an outgrowth of the governor's budget meeting last summer with officials of Santee Cooper, a state-owned electric power and water provider, at which he made it clear he felt Santee Cooper should be making a greater return to the state.

The governor isn't trying to change the formula that determines how much Santee Cooper sends to the state treasury -- not yet anyway. But that deserves further exploration. An agreement reached in the late 1980s between state and Santee Cooper officials resulted in Santee Cooper giving the state, semiannually, 1 percent of its gross revenue as opposed to 1 percent of its net earnings. Last year that amounted to $10.4 million and this year projections are that payment will be around $11 million. Still, the governor's office points out that the return to stockholders from investor-owned South Carolina utilities is much greater, ranging between 5 and 6 percent.

That issue, however, is separate from the one now causing a stir in the Senate, where a resolution is pending before the Judiciary Committee to prohibit Santee Cooper from selling the surplus land for any purpose except rate reductions to its customers.

Clearly some senators have a very different reading of the applicable state law from the governor, which they even cite in the resolution. Here's what Section 58-31-110 says:

"The South Carolina Public Service Authority is a corporation completely owned by and to be operated for the benefit of the people of this state, and any and all net earnings thereof not necessary or desirable for the prudent conduct and operation of its business, or to pay the principal of and interest on its bonds, notes or other evidences of indebtedness or other obligations or to fulfill the terms and provisions of any agreements made with the purchasers or holders thereof or others shall be paid over semiannually to the state treasurer for the general funds of the state and shall be used to reduce the tax burdens on the people of this state."

The Santee Cooper board has determined that it has surplus land that isn't necessary for the "prudent conduct and operation of its business." The governor argues that if the Santee Cooper land is surplus, it should be sold for the benefit of all its stockholders, who are, according to the law, "the people of this state."

We agree with that portion of the Senate resolution that says only the General Assembly can decide where the land sales funds will go if they aren't going to the direct benefit of Santee Cooper. But that's easily taken care of, either through the Legislature's approval of the governor's budget proposal, which includes the Santee Cooper money, or through a separate resolution.

The real issue is whether the surplus land sale money should be used "to reduce the tax burdens on the people of this state." The Santee Cooper board has agreed, through its resolution, that is the intent of the law. So should the General Assembly.

Click here to return to story:
http://www.charleston.net/stories/012704/edi_27edit1.shtml