My dad always taught me that if you're going to offer "constructive criticism," try and say something nice up front - and in that vein I want to compliment the General Assembly for its work this year on a number of fronts. Small business health care reform, DUI reform and immigration reform all represent steps to improved quality of life in South Carolina. I genuinely appreciate the work that went into making these sometimes contentiously debated things happen.
Unfortunately, I don't think the paragraph above will change the dynamics in the current disagreement with some legislative leaders on whether or not we should allow across-the-board budget cuts in our state government to stand. Here's our situation, and here's why I think it's so important that you, your neighbor and a friend or two down the street should insist on changing the course we're on.
State government spending has grown more than 40 percent over the past four years - well ahead of the growth in South Carolina's underlying economy and well ahead of the growth of people's paychecks over the same time. Our disagreements on this level of spending and my warnings on that front have all been well chronicled over the past five years - and to a great degree represent water under the bridge.
This doesn't change the fact that spending growth has set us up to repeat the budget situation of the early 2000s, when during three years there were six rounds of budget cuts. In every instance, cuts were across the board because our political system has been designed to take the path of least resistance - generally not the one that leads to the best decisions, whether in our personal or business lives.
I don't think the path of least resistance and across-the-board cuts should be taken today, and here are a few reasons why:
In our family budget we differentiate between what we commit to the mortgage and what we commit to buying tickets to the movies. With $3.50/gallon gas there are thousands of families across South Carolina making tough choices on where they spend their money. No one says, "We'll just cut everything across the board by 3 percent," because they know the mortgage is in a very different category than movies and popcorn. Businesses across our state do the same thing in setting priorities - why shouldn't your state government?
If one knows they are going to get credit for getting things, and that someone different gets the blame when things are taken away, then one will single-mindedly focus just on getting things. I'm not blaming a legislator for this, but just highlighting the unusual incentive system that exists for a legislator to focus on things for the district as opposed to the overall bottom line in our budget. We are the only state in the nation with a Budget and Control Board, and when bad economic times come our way, the legislative body has handed to this small group the responsibility of making across-the-board budget cuts. So when economic times are rolling, a member can legitimately say to a constituent, "I got you this project or funding." And when economic times are less robust, a member can point the finger at the Budget and Control Board that cut the constituent's favored project.
The only way to begin to change this dynamic so that our political system is more reticent about overspending is indeed to have members dealing with budget issues both when the tide rises and falls. This is particularly the case given the fact that we have $27 billion in unfunded political promises that go well beyond the budget shortfalls of this year.
Finally, this is something that could be dealt with quickly by the Legislature. I've seen firsthand how in a few hours tens of millions of dollars in vetoes that we've offered could be dispensed with. If we wait on this until January it means there will be a de facto 1.5 percent across-the-board cut to all agencies. This doesn't make any sense when some agencies like Corrections or Education are already running deficits. It also makes no sense given the glaring differences in some spending categories. For instance, the Competitive Grants program is scheduled to spend $100,000 this fall to give German politicians a holiday at Myrtle Beach, and at the same time, the Department of Education is running shortfalls on fuel for school buses.
I won't belabor the point further, but I think targeted cuts now rather than later are vital to the priority-setting process essential in best using taxpayers dollars.
There are many fine members of the legislative body who agree with this, but the course that their leadership has embarked on is to the contrary. Only you can break this tie, and accordingly, I'd ask you make your voice heard.
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