Slim revenues clear way for cigarette tax, bitter fighting
By Bill Davis, senior editor
JAN. 2, 2009 -- The biggest topic of the 2009 legislative session is also the first law of elections: it’s the economy, stupid.
Several sources predict that a faltering and sinking state economy will hamstring funding sources, and by extension, will focus legislators on what are truly essential roles and actions of state government. It will decide what will happen and won’t happen.
If illegal immigration reform was the legislature’s top agenda item in 2008, then 2009 will be the year of the purse-string.
A Statehouse wonk running the numbers said this week that, thanks to a series of cuts to the 2008-09 budget, baseline spending has been reduced from just over $7 billion to just under $6 billion, or roughly equal to the 2005 baseline state budget.
For those out of the loop, state government did not grind to a halt in 2005. In fact, it was a much better year than 2002, the last year massive budget cuts ravaged state agencies. As it turned out, 2005 was the first really good year for state revenues after the last dot.com recession, and legislators and budget writers used the influx of tax revenues to re-fund crippled agencies.
But there are a few issues that will make 2009 harder than four years ago.
First, there have been four years of inflation driving up prices and costs. While real estate prices have received crushing blows and gas has slunk down from the $4 gallon mark, the rest of the state’s economy hasn’t sunk as quickly.
Second, with the rise of accountability, the legislature has become more demanding of its state agencies over the last few years, asking for had already been asked to do more with less.
Third, there are more people for state government to serve. According to a recent U.S. Census report, the state had the highest rate of people moving into South Carolina than any other state in the nation.
The federal agency estimated that, in the 12 months between July 2007 and July 2008, roughly 50,000 Americans immigrated, or “in-migrated”, into South Carolina. Georgia, by comparison, welcomed 27,000.
More political intrigue ahead
With increased demand and pressures, 2009 may see more political intrigue than 2008, when fighting was kept to a minimum because everybody pretty much accepted that there was no “extra” money to squabble over.
But now that there will be a lot “less” money, legislators may be more likely to take to the rostrum to protect pet projects.
As a result, one of the best political battlegrounds in upcoming session may be the proposed cigarette tax increase. Currently, South Carolina’s 7-cents per-pack cigarette is the lowest in the country, and 2008 saw some legislators, most Democrats in the House, looking at increasing it as a way to better fund Medicaid offerings. The federal government offers a three-for-one deal that will triple any cigarette tax funds.
Now, an increased cigarette tax is being viewed by some legislators as a fatted calf, the state’s only source for new funding on the horizon.
The fight on the floors of both the House and Senate could extend past making the cigarette tax increase debate revenue neutral by matching the increase with offsetting cuts - - the issue that led its defeat last session.
Now, the battle will be on to raise the cigarette tax to, one, take advantage of the fed’s program; two, fund a one-for-one state program to underwrite employee healthcare plans in the private sector if a three-for-one waiver can’t be gained; and three, further raise it past last year’s 50-cent proposed increase to fund critically cash-short agencies.
Crystal ball: Sources tell Statehouse Report that, thanks to preemptive cuts authored by the Budget and Control Board, the state’s budget bleeding may be somewhat staunched. Why? Because the cuts were conservative in nature and were for bigger drops in revenue than were actually projected. That way the legislature wouldn’t have to cut into the budget in the first weeks of the session. We’re unconvinced. Since money is the number one reason for discord in marriages, we expect 2009 to be far stormier than 2008.
A smattering ahead
A smattering of meetings will take place in the House and Senate next week as the legislature prepares to return for the 2009 session. The 118th Session of the South Carolina General Assembly is scheduled to begin January 13.
Sanford saves Budget and Control Board?
Gov. Mark Sanford’s refusal to sign-off on a $146 million loan package from the federal government to underwrite the state’s unemployment commission until the last second may have some unintended consequence that the governor may not be real happy with: the salvation of the state’s Budget and Control Board.
Sanford, upset over the Employment Security Commission’s seeming inaction to protect its dwindling funds, refused to sign the deal until Dec. 31 because he wanted more accountability and better statistical information to flow out of the state agency. The state pays out somewhere in the neighborhood of $14 million a week in unemployment checks. South Carolina has the third-highest unemployment rate in the country at 8.4 percent. More: http://www.bls.gov/news.release/laus.nr0.htm.
Some critics around the state decried the holiday brinksmanship, saying that while Sanford had a good point, he was going about it the wrong way. One rumor now coursing through the Statehouse this week was that Sanford’s actions actually may have strengthened the case for the Budget and Control Board, a frequent target of the governor, as a protection from future stalemates like this one.
Statehouse Report, others help Manning band
When it looked like the state’s only official invitee for the Jan. 20 Presidential Inaugural parade was struggling to raise money, S.C. Statehouse Report swept into action by setting up an online donation page for the Manning High School Golden Pride band.
Why? Because it seemed like a no-brainer for the band to use the Internet to garner collections, just as President-elect used the Internet to generate millions of small donations to capture the nation’s top office.
By the start of this week, students and the Manning community had raised $28,000 toward the $40,000 cost of participating in the parade. To date, the online effort has raised more than $1,000 in additional donations.
Even better news is that the band definitely will go to Washington to take part in the festivities, thanks to a $10,000 donation earlier this week by South Carolina Enterprise for Excellence, a Greenville-based nonprofit founded by former S.C. Democratic Party Chair Joe Erwin and his wife, Gretchen.
If you’d still like the help, the band can use more donations to help replace duct-taped instruments and buy more instruments for the fall. Click here to donate.
UPDATE: Recent articles
State Rep. Olin Phillips (D-Gaffney) passed away Saturday, Dec. 28, at his home of an apparent heart attack at his home three days after turning 74 years old. Phillips had served in the House since 1979.
Sanford should apologize to South Carolina residents
By Andy Brack, editor and publisher
JAN. 2, 2009 - - Maybe the people of South Carolina now see Gov. Mark Sanford for who he really is - - a sanctimonious, rigid ideologue who puts policy before people.
Over the last two weeks, the governor’s true colors have emerged as he pitted more than 77,000 unemployed South Carolinians against a zealous desire to have an audit and make some other changes at the state Employment Service Commission.
Up until the last day of the year, Sanford resisted applying for a $146 million federal loan to keep the unemployment benefits checks flowing to out-of-work South Carolinians.
And even though he finally ended the game of grandstanding to make a point that ESC needed an audit, he played with people’s lives in ways that he never before had done.
Here’s what people should say to him:
“Governor, it’s not right what you’ve done. South Carolinians who played by the rules and paid their unemployment taxes deserve to receive benefits if they’ve been thrown out of their jobs. At a time when their families are mightily suffering, they don’t deserve to be pawns in some state or national drama that you’re staging.”
People should forget Sanford’s good looks, his charm in a crowd and all of those blue stickers that tout his “leadership.” Instead they should see him as a guy who will do anything to make a point.
- Remember when he took pigs to the Statehouse lobby to complain about pork-barrel politics? Cute, but the pigs defecated on him.
- Remember when he got a horse and buggy to show up near the Statehouse steps to rail again against the legislature? Cuter, but state lawmakers were onto his grandstanding.
- Remember when he vetoed the whole budget just to show his imperial displeasure? Didn’t work. Lawmakers saw through the stunt.
It’s time for Mark Sanford to start acting like a governor and not a spoiled child who isn’t getting his way. It’s time for this governor to apologize to South Carolina for stressing out its residents and failing to lead.
* * * * *
On a much different note, all residents of South Carolina should be inspired by the Manning High School Golden Pride band, which earned a much-coveted invitation to perform in the Presidential Inaugural Parade on Jan. 20, 2009.
“Everyone’s excited,” said 43-year-old John Nelson of Alcolu whose 16-year-old son plays bells in the band. “It’s an awesome opportunity for the students.”
Ninth-grader Joy Mitchell, who plays the flute in the band, said she felt overwhelmed by the opportunity to participate in the parade honoring Barack Obama. “I will tell my grandchildren everything we did.”
Clarendon School District Two Chairman Bobby Fleming said the whole Manning community had a great sense of pride in being picked to represent the state in the parade.
“The great grandparents of these children came up in a world that was totally different,” Fleming said. “Now these children have a chance to participate - - not just observe - - in history. This is just unbelievable.”
The 85-member band has been working hard over the holidays to get its three-song repertoire and marching down pat in preparation for the big event. They’ll play “Stand By Me,” “The Final Countdown” and “Carolina In The Morning.”
Students have also been raising money to pay for the $40,000 cost to perform in Washington. After raising more than $25,000, S.C. Statehouse Report worked with band officials to set up a Web site to make it easier for people across the state to donate through the Internet.
Why? Because presidential candidates like Obama proved a lot of small donations can make a difference. While a recent $10,000 donation the Greenville-based South Carolina Enterprise for Excellence put the band over the top on funding its trip, people across the state can still give $10 or $25 to allow the band to buy a few new instruments and other resources.
To donate, go online to:
Happy New Year.
Highlighting the Electric Coops of SC
The public spiritedness of our underwriters allows us to bring SC Statehouse Report to you at no cost. This week's spotlighted underwriter is the Electric Cooperatives of South Carolina. More South Carolinians use power from electric cooperatives than from any other power source. South Carolina’s 20 independent, consumer-owned cooperatives deliver electricity in all 46 counties to more than 1.5 million citizens. As member-owned organizations, cooperatives recognize their responsibility to provide power that is affordable, reliably delivered and responsibly produced. More at www.ecsc.org or www.livinginsc.coop.
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Time to stick up for our democracy
By ASHLEY LANDESS
President, SC Policy Council
JAN. 2, 2009 -- Last year, the Policy Council opened up a debate about transparency, and in doing so gave the public a rare peek behind the curtains at the Statehouse. Angry legislative leaders lashed back at those who supported open government, and watered down or killed reform measures that would have allowed citizens to hold lawmakers accountable and see how their tax dollars were being spent.
The excuses offered by the leadership – from protecting “tradition” to the “high cost” of open government – have to be embarrassing for those who still delude themselves that this legislature is about serving the public.
The biggest lesson from the transparency debate is less that legislative leaders arrogantly ignored the will of the people to protect their power, and more that they knew they could get away with it. Citizens caught a rare glimpse of the real problem in our state – it is run almost entirely run by one branch of government. There is no real separation of powers in South Carolina, and thus no true democracy.
Think about it. Legislators control our courtrooms and our classrooms, our cities and counties, our health care and welfare systems and increasingly our entire economy, not to mention our election process. Reform is almost impossible – those who tried to implement transparency last year were publicly punished by the Speaker of the House. The governor is supposed to execute the laws made by the General Assembly, but cannot practically do so despite being elected to run the state. Judges are appointed by the legislature – they are accountable to the body that both makes the laws and decides who interprets them.
Citizens simply cannot hold the entire legislature accountable for what goes wrong in our state, even though that is ultimately who bears the responsibility. Voters can get rid of their own legislators, but that does little good when they cannot control the leadership. As long as legislative leaders make their voters happy, they keep getting re-elected, and amassing power by which they keep their positions.
South Carolina citizens have less say in their government than in any other state. If we want to change that, we will have to stand up and claim our right to American democracy.
Lawmakers obviously don’t think that can happen. They might be right, but it bears remembering that America was founded by a strong people who craved freedom and individual liberty. They knew the only way to ensure both was to run government themselves, and they had to put up a tough fight for the right to do so.
South Carolinians should not give up on democracy, nor accept the status quo. We must not sit back and let American democracy die first in South Carolina – a state whose citizens fought for freedom at the birth of our nation, and have fought to preserve it for the 200 years since.
From education reform to setting budget priorities, there is much disagreement among citizens. We have a right to settle those disagreements through the electoral process, and then openly in our government chambers. We have a right to know everything happening in our government, and to decide if we like it or want to do it differently. In order to control our own government, we will have to change it. This is the year we should decide to do that.
Ashley Landess is president of the South Carolina Policy Council.
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Who's up and who's down
Barrett. U.S. Rep Gresham Barrett (R-S.C.) has announced his intention to donate the amount of his automatic raise to charity. More: Greenville News.Can a gubernatorial campaign be considered a charity?
Drought. Increased rainfall has seen lake levels around the state rise; the downside, the return of dreadfully tacky pontoon boats. More: Greenville News.
Unemployment. First, the governor refuses for months to sign off for a federal loan to underwrite the state’s unemployment system, and now state economists are stumped as to why South Carolina continues to rank near the highest in the nation for unemployment. More:
News. The second most read staff-written story at The Post and Courier this year? Sullivan’s Island resident and movie star Bill Murray’s wife sues him for divorce. Obama primary wins? Fifth and ninth. More: Post and Courier.
So, that nation’s economy is in the toilet, port business is slipping from record highs and you’re in danger of losing one of your biggest shipping accounts, Maersk, and now’s the time to hand out $700,000 in year-end bonuses? Where does the State Ports Authority thinks it works, Wall Street? More: Post and Courier.
Sanford. A millionaire reared on a plantation playing chicken with unemployed families’ Christmases is the height of, well, umm, we can’t say it because it’s so bad.
Ringing in the new year