S.C. Statehouse Report
Sunday, March 6, 2005
VIEW: http://www.statehousereport.com/columns/05.0306.budget.htm


COMMENTARY
State budget proposal has more stories in it
By Andy Brack
SC Statehouse Report

MARCH 6, 2005 - - The $5.9 billion state budget that will be considered by the S.C. House soon has two big stories that have been missed:

  • Even though the state has $246 million in new revenue this year, some smaller state agencies may face cuts.

  • Because the state may fully fund education for the first time in a few years, local school boards may be able to lower local taxes.

Story One: More possible cuts

Last year, the state's revenue continued to be off because of the national economic downturn. Because of shortfalls, lawmakers agreed to spend $9 million with the state Department of Revenue to attempt to generate $90 million in uncollected revenues. Collections of this pool of money, generally called "Maybank Money" because state Department of Revenue Director Burnet Maybank III came up with the idea, are on target, according to recent reports. In the coming year, another $45 million is projected to be collected for the general fund.

Selected state agencies
Agency 2004-05 Maybank Money 2005-06 proposed new spending *Is Maybank $ part of new spending?
ETV $1,026,992 $1,267,911
No
State museum $331,629 - $21,216
No
Dept of Mental Health $9,038,279 $9,012,038
Some
Dept. of Disabilities and Spec. Nds $9,033,318 $8,648,065
Some
Forestry Commission $1,006,311 $1,084,129
Yes
Dept. of Nat. Resources $1,651,310 $1,879,226
No
SLED $1,955,389 $6,258,065
Yes
Attorney General $664,241 $220,037
No
Dept. of Corrections $7,018,856 $12,034,539
No
Probation, Pardon, Parole $1,865,077 $347,685
No
Senate $637,110 0
No
House $767,737 0
No
Parks, Rec and Tourism $1,998,501 12,077,813
No
DHEC $7,675,331 $5,179,346
No
DAODAS $585,874 $1,036,049
No
* Essentially, this column reflects whether the 2005-06 budget included line items that appear to correspond closely with Maybank Money spending from 2004-05. If the answer is "Yes," it indicates state lawmakers allowed the non-recurring Maybank Money to become recurring. If "No," 05-06 spending represents new programs. Agencies either used the money as non-recurring and face no shortfall. Or they may face shortfalls -- or they didn't understand they could argue that Maybank Money should recur for them.

But last year, state leaders made it clear to agencies that if they got Maybank Money, it was for non-recurring things, like building repairs, not recurring spending like salaries.

"Agencies that treated that like one-time money like we told them will be fine this year," said House Ways and Means Chairman Bobby Harrell, R-Charleston. "Agencies that ignored our clear direction to treat it as one-time money may have difficulties. If they didn't [follow our instructions], it's their own fault."

What's really interesting about the proposed budget is that some agencies made the case to appropriators that their one-time money essentially should be extended. Other agencies didn't get extra.

For example, the S.C. Forestry Commission got $1,006,311 in Maybank Money last year. In the proposed 2005-06 budget, it gets $1,006,311 for wildfire suppression. Last year, the State Law Enforcement Division got $1,955, 389 in Maybank Money. In the coming year, the House budget proposes to give it $2 million in new money for "operating expenses."

Other agencies didn't get a windfall. In turn, they may face some small cuts internally if the Maybank Money was used for recurring expenses. A few examples:

  • SCETV received $1,026,992 in Maybank money; in the proposed budget it receives $1,267,911 in new money, but it's for a new satellite service, not to replace last year's money.

  • The Department of Probation, Parole and Pardon Services received $1,865,077 in Maybank Money, but received only $347,685 in new money, mostly for law enforcement salary increases. Department spokesman Pete O'Boyle said last year's money was used for one-time expenses so the department doesn't expect any cuts.

  • The Attorney General's office got $664,241 in Maybank Money last year, but only $220,037 in new money in the proposed budget.

  • The S.C. House and S.C. Senate got almost $1.4 million in Maybank Money last year. With both chambers' spending loaded heavily on staff, some cuts may be in the offing to stay within the budget.

ALSO THIS WEEK

McLEMORE'S WORLD: A commanding presence

SCORECARD: Thumbs up/down and mixed reviews

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Story two: School taxes may go down

A provision in the new budget would give local school districts the flexibility to drop local taxes.

Current law calls for local boards to raise taxes to match increases in state Education Finance Act dollars - - the money that mostly pays for teachers. Because the state has not been fully funding teachers for the last few years through the EFA, local boards often raised taxes to keep from cutting salaries.

But because the state is fully funding salaries this year, local boards don't need to match the state increase. In essence, they could get a windfall since they've added taxes over the years to take care of shortages. But because there's no shortage, they may not need the extra. But the current law doesn't allow them to adjust local taxes downward, Harrell says.

"Normally, the law says school districts can't lower funding levels below what was done last year," he said.

So he offered a provision that would allow them to do so this year. Districts that want to cut taxes can. Others might try to keep taxes the same and build up reserves.

RECENT COMMENTARY

McLEMORE'S WORLD
3/4: A commanding presence

Another great cartoon from Bill McLemore:


LEARN MORE DAILY

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SOUTH CAROLINA SCORECARD

Here's a "thumbs up" and "thumbs down" related to various political events from the past week:

Thumbs up

Clyburn. Hats off to U.S. Rep. Jim Clyburn for a convincing article in The State on Sunday opposing school vouchers.

Thumbs down

Sanford. It's time for the stupid stunts to stop and for the governor to engage with lawmakers, not prod them.

S.C. House. Democrats and Republicans should be ashamed for passing a same-sex marriage amendment to the Constitution. Not only does the proposal institutionalize discrimination (and surely will be challenged at some point), but the state already has a ban on same-sex marriage. This is a completely unnecessary measure designed to inflame, not move the state forward.

Rep. Joe Brown. The chair of the 3-M Committee has it wrong on doctor discipline....The legislature will be in session for 13 more weeks. There's more than enough time to pass a bill that will let consumers know more about doctors and complaints about them. It took less than a month for the House to pass a bill to name no roads after living people. Come on. This excuse doesn't pass the smell test in a House known as a racetrack.


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