JULY 16, 2010 – Stealing from Peter to pay Paul has long been a state budget tradition as warring priorities and changing economic fortunes have continuously shifted the budget landscape.

But, what if Peter doesn’t have any money to pay Paul? In South Carolina where state General Fund budget projections have shrunk from a recent $7.1 billion to $5 billion for the 2011-12 fiscal year, what then?

Isn’t it obvious? You mug Mary! (Get it? Peter, Paul and Mary?)

While “mugging” probably isn’t the best verb, the state is stepping up efforts to bring in other funds it has been missing out on – beyond the billions in sales tax exemptions being debated in monthly tax realignment commission meetings.

Extra money appropriated

Last year, the General Assembly cut a check for an additional $2.2 million to the state Department of Revenue for the 2009-10 fiscal year in hopes that added investigators would turn up more money owed to the state.

With 60 more investigators on board, it was hoped that an additional $48 million would be gathered from delinquent accounts to out-of-state businesses generating revenue in South Carolina that may or may not have known they owed taxes. Instead of $48 million, the additional employees actually brought in $106 million. That is almost as much money as the state is expected to receive in the coming year for the increased cigarette sales tax, which will go to pay down state health care offerings and programs.

Increased tax collections from Revenue investigators were part of some rare good news in the capital this week as economists reported the state collected $140 million more in 2009-2010 than was expected.

In the 2010-11 budgeting process, buoyed by the current year successes and mindful of looming shortfalls, legislators sent Revenue an additional $5.5 million – enough, according to Revenue spokesperson Adrienne Fairwell, to create approximately 90 more jobs.

Daunting new goal

With the additional money -- a nearly 250-percent increase over the previous year’s extra -- comes a daunting $100-million goal. But if the extra Revenuers can double their goal as they did this year, then it could bring the state a much-needed $200 million.

The proviso which dedicated the extra money, which Gov. Mark Sanford attempted unsuccessfully to veto earlier this year, requires monies gathered as a result of the additional investigators are to be put into a separate account, and not swallowed into the General Fund.

The money will be split among a list of 27 needy state coffers, ranging from $2.1 million to fund the Budget and Control Board, $7 million to fund tech schools, $11 million to offset public school bus fuel costs, to nearly $3 million for the Judicial Department, and smaller items like special schools and academies around the state.

Anything raised past the $100 million goal will be further split up, with the first $8 million going to the Department of Motor Vehicles, then a million apiece for Forestry, firefighting efforts, and so on.

So how did Revenue do it? Fairwell is keeping mum: “The Department does not divulge or discuss its audit and collection procedures,” she said. It does, she said, attempt “to identify businesses and/or individuals who are delinquent on their taxes and we utilize all of the tools available to us to collect.”

Fairwell said there was not “average” target.

“The account types vary. There is no set account type or pattern. Again, amounts owed vary and cannot be detailed because amounts owed also include penalties and interest. There is no set ‘delinquent’ time.”

Fairwell was also mum about who was next: “The Department is not at liberty to discuss its processes and therefore will not comment on ‘who efforts will be focused on’ at this time,” she said.

Challenges ahead

A source of concerns for some critics, speaking on condition of anonymity, is how Revenue would tackle the issue of getting taxes paid on Internet sales inside South Carolina by outside companies. Currently, Revenue has “19 of the top 25 Internet retailers registered to collect sales tax on behalf of the state,” according to Fairwell, who went on to say South Carolina has reciprocal agreements with other states.

Crystal ball: As good as a job as Revenue has done securing delinquent sales and income taxes with a comparative pittance, it’s only going to get tougher as the delinquent pool will get smaller with each success. This could put Revenue’s future extra millions on the endangered list in coming years. Until then, it looks like everyone had better pay their taxes.

7/9:  What's up with the Budget and Control Board?

6/25:  Teaching teachers about abuse

6/11:  Election provides questions and answers

 

The monthly meeting of the Taxation Realignment Commission will be held Wednesday at 10 a.m. in 105 Gressette. More.

• New resource: The Budget and Control Board has begun to publish an oft-updated calendar of state governmental meetings. Go to http://www.bcb.sc.gov/BCB/BCB-all-meetings.phtm for more information.

The good news was that unemployment is ebbing and more and more people are finding work – more than 40,000 more since January. The bad news was that tax collections were dragging about 2.5 percent behind this time last year, and nearly 6 percent behind since two years ago this time.

Watching the pennies

As the final six months of State Treasure Converse Chellis's term starts, he announced this week the beginning of a five-month study on the possible implementation of zero-based budgeting for the state.

“It just proves you can't hide anywhere in the world,” Sudduth observed.

With the globe's second highest economic growth last quarter at 11 percent, Turkey is an emerging economic tiger that has grown to become the world's 17^th largest economy.

In a society that pays attention to economic might, Turkey seems to be flexing its global wings. But the Turks, a gracious people who once ruled people on three continents, today appear caught between the desire to be a first world nation and the reality that there's a lot of the second world still left inside its borders.

“I just get a feeling that there's not a strong consensus on what they want to be,” said Sudduth, one of several South Carolinians on a cultural exchange this week in Turkey.

On one hand, there's a great pride in Turkey for being a pro-Western secular democracy that has shunned the injection of religion in government since the 1920s. (Just about everyone in Turkey is Muslim, although reportedly half are observant.) The country has modern hospitals with fancy technology found in the best American hospitals. Students are steered to study math and science so they can help the nation grow its professional class.

Perhaps taxi ("taksi" in Turkey) drivers are the same everywhere.

NOTE: Obama Administration official Stacey Brayboy offered graduation remarks May 2 for students at Augusta's Paine College.  Here are excerpts from her commencement address:

By Stacey Brayboy
Special to Statehouse Report

Sometimes you can be so close to a situation that you can’t see the good in it. I say that to say that I see you going from Good to Great.   Earlier this week, I shared a moment of greatness when I stood on the balcony of the Lorraine Hotel in Memphis, Tennessee. I stood on the grounds that a true King walked. He had a dream that was cut short behind people that were afraid of true social and economic justice for America. The dream is still alive today in each of you because I see it in your eyes and feel it in this place.

You have accomplished a lot.  Maybe a few of you can relate to a story of a young person being told that college was not for you them.  They were asked, “How are you going to pay for it?” They were told, “You have big dreams there my friend. If you made it to college it’s going to be tough. You have determination, courage and a strong will but young people like you from rural America don’t have the support base to help you make it.” Imagine, if you can, that young person running in the house and the glass door closing behind and they burst into tears. Why? Because all their dreams of going to college were shattered from this conversation.  

Now take a deep breath and imagine a praying grandmother who grew up in a segregated South and understood the value of an education, saying to you:  “You have determination, courage, and the power of prayer. If you believe in yourself and get an education no one can ever take that away from you.  Don’t worry, Study hard.”

How many of you can relate to or know first hand a story similar that one. Or perhaps someone told you that you were taking on a very big task for such a young person and you must be out of your mind too.  Raise your hand? Don’t be shy.  I am raising mine.   Guess what?  You made it...  This is your day!!  And you are going from Good to Great!  

We have seen a nation change over the past few years. A nation that joined a movement for change.  A movement that I joined  by serving as the South Carolina State Director and working along the sides of  people from across this country, black and white, young and old.  There was something unique that we shared. It was a common belief that by educating, sacrificing, hard work we could bring this country together to support electing the first African America President.   Was it easy?   Let me answer by saying we all knew that change would never be easy but we also knew without hope and belief in what we were trying to accomplish, we could not help turn a page in history which I believed has truly paved the way for this graduating class.  

You all know the story of David and Goliath.   For those of you who don’t... Let me refresh your memory. – [it was about] a young man who protected his people by using his sling shot and take down a giant.     In today’s society, you all will face giants name Goliath – the giant of no longer just competing jobs with students from Atlanta, South Carolina or Chicago. You are competing with students for China and Japan.   The giant of international competition for advance technology, the giant of a high jobless rate, the giant of the decline and lack of young black entrepreneurs, the giant of hypertension, the giant of child obesity, the giant of a dwindling rural America where families know each other by name, a giant of a dwindling farmers and food produced here in the U.S. and the giant of peer pressure  

Your journey through Paine College has provided you with the tools you need to tackle any of these issues facing our neighborhoods and facing our nation.  Your  studies here have made you good.  Good enough to compete in the world and address and tackle any issue.  You have the power of knowledge that has prepared you to go out a slay any giant. 

You can never rest on your last  victory or accomplishment.   Your matriculation through this  great institution has prepared you  to join others in your generation to tackle some of the biggest giants.  You are going to have help along the way from the Joshua Generation and the generation of leaders who brought us this far today.    Look at where we have come as Americans, look at how far we have come as a people. Look at how far you have come today. Class of 2010, you are going from Good to Great! Thank you.

MUSC. The Medical University of South Carolina was listed amongst the nation's best hospitals in its treatment of six specialties, according to U.S. News and World Report.More.