Posted on Wed, Mar. 10, 2004


Ways and Means budget still relies too heavily on one-time money


Associate Editor

FOR THE BETTER part of a decade, budget-writing in South Carolina has been part fantasy, part religious experience. Legislators would round up pots of money they knew wouldn’t be available in future years — left-overs from the previous year, proceeds from sales of state property, federal bail-outs and other “one-time” funds — dole them out among agencies to pay for programs that would need funding in future years, and then ask everybody to join hands and pretend that the money to keep paying for all those programs would somehow mysteriously appear the next year.

This practice, begun in good times, did as much as the recession to cause the deep and painful budget cuts over the last four years. But still it continued, only instead of creating new programs with the one-time money, legislators starved for cash started using that money to delay making tough decisions about cutting programs or raising taxes, pretending that the economy was going to rebound any minute now.

While the dwindling supply of one-time cash pots has reduced this practice, the budget proposed by Gov. Mark Sanford marked the first real departure. He still used more one-time money than is healthy, but he proposed to reduce the so-called annualization problem from this year’s $235 million (down from a pre-recession high of $700 million) to $144 million. A huge step forward.

On paper, the budget under debate in the House this week goes even further, reducing the annualization problem to a much more reasonable $61 million. But on top of that $61 million, the Ways and Means Committee plan gives agencies another $200 million in one-time money — some of which budget writers acknowledge might not even materialize this year — that budget writers are specifically warning they will not seek to replace next year.

In many ways, this is a distinction without a difference. Using $270 million that lawmakers know will not be available to spend the following year means that, once again, the state is putting off the inevitable.

Ways and Means Chairman Bobby Harrell argues that this year’s approach will change the dynamic and lead to the Legislature finally putting an end to this dangerous practice. The fundamental truth of legislative government is that it is easier to maintain the status quo than to change it, and this proposal, in Mr. Harrell’s view, will have the effect of upending the status quo without seeming to do so until the deed is done. His plan means that next year, rather than coming to the Legislature begging that their budgets not be cut any further, agencies will be begging that their budgets be increased. In other words, it will be the agencies, rather than budget writers, who will be trying to change the status quo.

Mr. Harrell also looks at this in what he sees as more practical terms. Making those cuts this year — rather than getting one year’s good use out of money the state has at its disposal — would amount to putting theory ahead of real people.

I agree that — from the perspective of this Legislature — the Ways and Means Committee’s plan to phase out the use of one-time money by next year is a huge step forward.

And Mr. Harrell’s real-people argument is a compelling one, and one I sometimes have a hard time getting around. A family struggling to make ends meet would sell off stocks or tap the retirement fund if that were the only way to pay the mortgage and the grocery bill for a few months, in the hope that things would improve before the cash ran out. But that family wouldn’t use the temporary cash to move the kids to private schools or sign up for a faster Internet connection — which this budget does, by creating new obligations such as the long-overdue pay raises for state employees. As long as the family still had ways to cut the monthly bills, such as turning down the thermostat or dropping the cable service, it wouldn’t even use the savings for something as important as signing up for health insurance. And you can bet that Mom wouldn’t wait until the savings ran out to go out and find a second job.

The problem with this plan to get us by on a prayer for just one more year is that it is a far cry from what we need in this state.

What we need is for our Legislature to determine what services the government needs to provide to the people of South Carolina, how much it costs to provide those services and how best to raise the money to pay those costs. And then our Legislature needs to pay those costs, whether they add up to more money or less money than the state is currently collecting. What this budget does is allow the Legislature to delay those decisions for yet another year — and, perhaps not coincidentally, scrape past another election year with the public believing that the situation is not as dire as it is. And that is a disservice to all the people of our state.

Ms. Scoppe can be reached at cscoppe@thestate.com or at (803) 771-8571.





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