Sunday, May 29, 2005
State has a long
way to go on solid budgeting
SC Statehouse Report
29, 2005 - - A friend observed this week that he buys shirts
online because it's easy and he can avoid the mall.
He, like millions of others, has shifted in the way he buys
things to make life easier and take advantage of innovation.
But most states, including South Carolina, continue to use
archaic tax systems that don't respond to changes in the way
people behave, live and do business. And that's why, in large
part, South Carolina faces a looming budget crisis in coming
years unless something is done.
A new report says South Carolina is among 11 of the states
in the nation that face the highest risk of not having enough
money down the road to pay for its current level of programs
and services. Because of the way the state's tax system is
set up, its shrinking tax bases will grow at a smaller rate
than the costs to maintain government programs at current
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So while South Carolina now might have a balanced budget
and the first surplus in years, it has a long-term structural
deficit and scores poorly on each of 10 risk factors identified
by the Center on Budget and Policy Priorities (http://www.cbpp.org).
"We're not trying to tell any state that they should
have higher taxes," says CBPP Deputy Director Iris Lav.
"But do you have a tax structure that keeps up with the
level of services you choose?"
In South Carolina, the answer is a solid no. Take a look
at just a few of the risks, as identified by the Center:
Shrinking tax bases. The state's sales tax base has
shrunk 13.4 percent since 1990 - - much higher than other
states - - and covers less household services than other states.
It doesn't help, for example, that South Carolina has more
than 60 sales tax exemptions that could generate $1 billion
a year in tax revenue if they were off the books. Also importantly,
the state's corporate tax base has shrunk 6.6 percent so that
corporations are paying less of their share of government.
"There's definitely a shifting of the tax burden that's
been going on for the last 10 years," said State Revenue
Department Director Burnie Maybank.
Internet/catalog sales. The state is missing up to
$395 million in sales taxes revenues because people have shifted
to buying things through the Internet and catalogs. Maybank
says the number is much lower - about $80 million - but agrees
the tax structure is set up to make it tough to collect taxes
from these sources.
WORLD: On Memorial Day
Sanford is wrong for SC
TRACK: Right on Sanford's strategy, Santee Cooper
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Seniors. According to the study, seniors in South
Carolina get tax breaks that exceed the average. Meanwhile
as a group, the growing elderly population will cost the state
more to provide services in future years. The continued costly
growth of Medicaid, for example, poses the biggest threat
to the budget because it squeezes money from other programs,
Brackets. The state's top tax bracket is $12,300,
which means most people's incomes are taxed at the same levels.
Because brackets don't reflect a real cross-section of incomes,
lower income people end up paying more than their fair share.
What's happening in South Carolina, much like at the federal
level, is that people want government to perform, but they
want to pay less.
"They haven't modernized the tax structures, but people
expect schools to have computers and they expect hospitals
to have MRIs so the costs of services that states are providing
are going up," said report co-author Liz McNichol.
Options to reduce the risks from a structural deficit in
the future include:
- Removing sales tax exemptions, which will grow the sales
- Close corporate tax loopholes
- Stop giving income tax cuts, especially to the rich.
- Eliminate tax breaks based on age, but consider them based
- Simplify the sales tax structure to make it easier to
collect sales taxes on Internet and catalog sales.
- Conduct longer term projections on spending and revenues,
including growth in cost of services.
Lawmakers need to wake up to budget realities and resist
the urge to try to give people something for nothing.
5/29: On Memorial
Another great cartoon by Bill McLemore:
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5/22: Sanford is wrong for SC
To the editor:
Governor Sanford constantly lectures us that he is all about
getting a great return on our tax dollars; and that he also
wants all South Carolinians to have a better quality of life,
and to increase trade and wages. That is great, I could not
So what is with all of these vetoes? Especially the veto
of funds to help the struggling community of Willington in
rural McCormick County? The funds earmarked for that community
amount to seed money to enhance tourism and
ultimately income, and more jobs! Let's see that sounds like
a good investment of tax dollars that will net an increase
in the quality of life for Willington Citizens, and increase
in wages. WOW, sounds like that money is in line with helping
meet the Governor's goals. What gives. I think this can be
explained by looking at the Governor's background of wealth
and privilege. He does not know what it is like to live from
pay check to pay check, to have to work nights and weekends
just to feed the family. He is not even a native South Carolinian!
And you know, he never sponsored legislation in Congress that
resulted in any change or improvement. This
man is all talk - and no action. He could not get a consensus
to get himself out of a wet paper sack!
Furthermore, He is also an egg headed Libertarian and he
allows these pointy headed ideas to over rule common sense.
This is not pork! This is about helping people to help themselves.
But Mark cannot understand that, after all this is the same
Mark Sanford who tells poor black children in Allendale County
that they can have better schools if they just study harder,
and their parents pay more taxes, and get local business to
pay for school related expenses. Sure Governor, and I have
lake front property for sale at a real deal in the center
of the desert in Saudi Arabia!...
Again, in his defense, Mark not being a real native of South
Carolina, and of course very wealthy and privileged, does
not have a clue about what it is like growing up in rural
South Carolina. If he did he would know what a tremendous
blessing Santee Cooper was and is....to all of us. We are
not interested in this particular business making a profit
on the backs of South Carolina Farmers and hourly wage earners
in rural South Carolina!!!!!!
Many years ago, the only way electricity was delivered to
rural, underdeveloped, and poor South Carolina was and is
through the South Carolina Electrical Cooperatives. These
co-ops provide a real deal for rural South Carolinians, and
having experienced it first hand, I think they do a darn good
-- Sandy Gibson, Lexington, S.C.
Here's some recent feedback to Statehouse Report:
doesn't care for Average Joes, Sandy Gibson, Lexington,
with what passes as a Republican, Janet Upshaw,
on Sanford is liberal hogwash, Lew Richards, Manning,
Shavone Gadsden, sophomore, Columbia College
on Neanderthal column,
Natalie Mann, Bluffton, SC
will be different
This section tracks past forecasts by Statehouse Report with
other media reports:
In Statehouse Report:
could be vastly different next year:
"After 11 years of stability
under Wilkins forceful leadership, next years
House could easily become a more raucous place."
In other outlets:
5/22/05, Bandy in The State: Wilkins'
shoes will be tough to fill: "Regardless
of who wins, the victor will have problems with right-wing
Republicans who are likely to try to test the new speaker
may be using legislature as tool:
"A high-ranking Republican
senator is just one of several who say the poll-popular
Sanford seems to be trying to build a case that he is
being thwarted from what he wants to do by an obstructionist
General Assembly - - even though it is controlled by
5/18/05, The State: Election
2006: Sanford vs. Legislature: "With 163
budget vetoes Tuesday, Gov. Mark Sanford began to lay
the groundwork for his re-election next year
a campaign that could pit him as much against fellow
Republicans who control the General Assembly as any
Democrat who challenges him."
service has one master, not two: "While
all of this has been going on, some members of the Santee
Cooper board (i.e., Gov. Sanford's appointees) have become
increasingly activist in nature. Charges are flying that
board members are micromanaging on everything from corporate
contributions and power contracts to working intimately
on a privatization study."
The Post and Courier: First
Lady's involvement questioned: "'It's worse
than we expected," [State Sen. Luke] Rankin said
Thursday. "I had seen a few e-mails and heard rumblings
of some of these issues, but I didn't realize there were
so many documents that call into question so many things.".
SOUTH CAROLINA SCORECARD
Here's a "thumbs up" and "thumbs down" related to various
political events from the past week:
Wilkins. Hats off to House Speaker David Wilkins,
who was confirmed Thursday night unanimously by the U.S. Senate
to be America's new ambassador to Canada.
Peeler. Congrats to Sen. Harvey Peeler, R-Cherokee,
who was elected the new Senate majority leader. He'll follow
Sen. Hugh Leatherman, who will resign on Aug. 1.
Reese. If you thought changes to the Senate rules
this year would completely keep the Senate from breaking down.
Sen. Glenn Reese, D-Spartanburg, proved it could be shut down
with a parliamentary manuever this week.
Sanford. Some 95 percent of the governor's vetoes
were overridden. His press secretary attacked House members.
Some senators say the governor has become irrelevant in the
Santee Cooper. Santee Cooper board member Keith Munson
rightly finally resigned amid complaints of micromanaging.
Sanford withdrew nominations of two others to the board.
Bauer. The Free Times reports that the S.C. Department
of Transportation bought 1/10th of an acre from Lt. Gov. Andre
Bauer for $130,000 -- some $47,500 more than it was appraised.
The deal smells. More: http://www.free-times.com/News/newsmain.html#bauer
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