Op-Ed

By Gov. Mark Sanford

There was much fanfare last year about pigs, pork barrel spending and vetoes, yet lost in the commotion was what the vetoes were all about—the constitutional requirement of a balanced budget in South Carolina. Those vetoes were not about individual spending items but rather about using the only tool left to extinguish the remaining $16 million of a $155 million unconstitutional deficit.

Given the amount of new money coming into state government this year, the vetoes I recently laid out are in the same vein, less about the underlying spending than about two larger themes. First, should our government grow faster than the incomes of the people who pay for it? Second, should we pay back trust funds borrowed from when times were tough before we begin new and additional spending?

On the first point, I think it is a bad idea for government to grow faster than the incomes of the people who pay for it. Working people across our state are sending $707 million of additional and new money to Columbia this year. If we do what has been proposed, spend all of it, that proposal represents a 9.1% increase in spending from last year. But folks in South Carolina aren’t getting a 9% increase in their paychecks. In fact, personal incomes are projected to grow by 3.8% this year, and the five-year average is 1.4% each year. Using a different measure—population plus inflation—annual growth has averaged 3.6% during the past two years.

Faced with a budget that grows government at more than double the rate of people’s incomes, we pushed hard to give some of the money back in the form of a tax cut. Most in the House and a few in the Senate agreed with that notion. But our proposal got trimmed so that only $2.5 million of the $707 million in new money is being sent back to the taxpayer.

Even if you disagree with the idea of spending less, our state’s practice of simply spending whatever comes in creates an up and down pattern that many believe is harmful to state agencies, their employees and the citizens they serve. That is why it makes sense in years like this one to limit our spending, pay back trust funds and allow for a more modest and sustainable rate of government growth.

On trust funds, I believe in the principle of doing first things first, which in this case means that we should pay back money borrowed when times were tough before we begin new and additional spending. Families across our state live by this principle; when times are tough, they borrow from the proverbial cookie jar. Small businesses do the same, and in both cases, when times get better, the first order of business is to put money back in the cookie jar. We should do the same in managing our state’s financial affairs.

Where money is spent is just as important as how much money is spent in any budget. Here, only 16.7% is dedicated to trust fund replenishment, while 83.3% is allocated to new spending. I credit the House and Senate for the way they funded education, healthcare and law enforcement. But here is the catch; even after you subtract our vetoes, this budget keeps spending at the highest level approved by either chamber during the legislative process in education ($190 million more), Medicaid ($80 million more), law enforcement ($37 million more) and that still leaves $185 million available for any other items the General Assembly might wish to fund.

That is why I believe these vetoes clearly reflect an attempt to meet in the middle on replenishing trust funds. We did not propose what I would have liked to do, which is completely repay all trust funds. Instead, we proposed $96 million in vetoes, which would get us up to about $210 million in repayment, or about half of what is owed, with $226 million remaining to be repaid. Overall spending would drop from 9.1% to 7.5%, or roughly equal to what originally passed in the House and Senate budgets this year.

After we pay back trust funds, it is the General Assembly’s prerogative to fund many of the projects that we vetoed. All we ask is that we put 7% more of this money to paying down trust funds this year. That is important, not only because I think it ought to be a first order of business, but also because it makes common sense. Gas has never before been at two dollars a gallon in my life, interest rates are rising and no one knows what happens next with the national economy – but if it does slow down, we will be better off as a state having paid back more of the money we currently owe.

Mark Sanford is governor of South Carolina.

SUBSCRIBE | REPRINTS | CONTACT US

Phone: 843-849-3100    Fax: 843-849-3122