Deficit swept under the rug

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with deficit spending of the past.

It needs to be addressed next year.

South Carolina is risking its highly coveted AAA credit rating and is ignoring the state's constitution by running what looks, talks and walks like a budget deficit. A $155 million budget deficit was carried over from the 2001-02 budget year, and the funds to cover it are being pulled from what state Comptroller General Richard Eckstrom calls special "earmarked funds."

Eckstrom and Gov. Mark Sanford, two members of the state Budget and Control Board, tried unsuccessfully Wednesday to get the powerful five-member board to address this leftover deficit. The board's two legislative members — Sen. Hugh Leatherman, chairman of the Senate Finance Committee, and Rep. Bobby Harrell, chairman of the House Ways and Means Committee — said the Budget and Control Board didn't have the constitutional authority to address previous deficits. State Treasurer Grady Patterson joined the two legislators on this important vote.

More than $100 million has been raided from state trust funds created by law for special purposes and funded through user fees or donations. Those funds will be needed at some point in the future, and the Legislature has not developed a plan for repaying this money.

The $177 million that Eckstrom earlier identified as deficits from budget years ending 2002 and 2003 was taken from "earmarked funds" designated by the Legislature for special purposes. The Budget and Control Board did agree to pay off the $22 million from the budget year that ended June 30, but that begs the question of what will happen to the $155 million.

The budget picture continues to be bleak. The $5 billion budget adopted for this fiscal year appears unachievable in a state that shows little sign of economic recovery. Wednesday, the Budget and Control Board set aside the $98 million in its major reserve fund to cover this year's potential shortfall. The board also ordered state agencies to set aside about 1 percent of their 2003-04 budgets, with $22 million of the $43 million intended to cover the state obligations from the 2002-03 fiscal year.

Legislative leaders owe it to South Carolina residents to develop a plan for restoring the funds raided from special trust funds and earmarked funds. They also need to do what has been avoided for two years, and that is to set firm budget priorities next year, consider a few targeted tax increases and adopt a state budget that has integrity.