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Budget tightening targets $18.5 million in grants
By Scott Miller
Staff Writer
Gov. Mark Sanford has asked lawmakers to eliminate $18.5 million from the state’s Competitive Grants program, which he calls a “legislative slush fund.”
The program provides communities funds for economic development, education, social service and other programs.
Last year, for example, North Charleston received $28,856 to support vocational studies for children aging out of foster care and $50,000 for its Youth Empowerment Services program for underserved neighborhoods.
Charleston received $95,000 for the Camden Towers East Shed Restoration Project, and the Summerville YMCA received $100,000 for the Flowertown Festival.
Sanford’s request is the latest in efforts to balance a state budget that faces dwindling revenues.
He also called for lawmakers to cut $10.5 million from the S.C. Budget and Control Board’s “rainy day” fund and $20.5 million for the creation of farmers markets around the state.
But the Senate has its own ideas, as does the House.
No money
The S.C. Board of Economic Advisors lowered state revenue projections by $90 million for the upcoming fiscal year, or about 1.3%, leaving lawmakers looking for more cuts in an already trimmed state budget.
In addition, the revenue picture is bleaker than expected in the current fiscal year.
Sales-tax revenues are off $25 million from last year, or 12.2%, according to a March report from the BEA. Corporate income-tax collections dropped 22%, or $14.8 million, while individual income-tax revenues declined 19%, or $17.7 million.
The three coffers represent the top three sources of state revenue.
By fiscal-year end, BEA economists expect individual income taxes to show a 1.3% increase from the previous year, while sales-tax and corporate income-tax collections are not expected to rebound.
Sanford warned for weeks that BEA projections were too steep.
He sent a letter to BEA Chairman John Rainey in February requesting the agency reduce revenue projections by at least $100 million.
“I think the further north you go from there, the more prudent you should become,” Sanford wrote.
Cut spending
The Senate, meanwhile, kept it at $90 million. Members of the Senate Finance Committee met during an emergency session to trim an additional $40 million from next year’s budget.
The Senate had already cut $50 million from a budget approved by the House.
The latest Senate cuts, totaling $40 million, included dollars for tourism marketing, new
school buses, raises for state employees and others.
The endowed chairs research program at Clemson University, the Medical University of South Carolina and the University of South Carolina were among the biggest losers in the
Senate’s plan.
The Senate cut $20 million of the $30 million the House approved for the program.
“It is one of the most important things our state is doing to advance economic development,” said Greg Foster, a spokesman for House Speaker Bobby Harrell, R-Charleston.
Harrell has been an ardent supporter of the endowed chairs program.
“I’m sure it will be a highly debated thing in the budget process,” Foster said.
Sanford, meanwhile, doesn’t like the budget coming out of either chamber.
“Overall, we believe that the House and Senate budgets do a poor job of setting priorities, as across the board cuts do not set priorities, and we’d ask that they look very carefully at what we’re proposing in this plan,” Sanford said.
He wants to restore cuts to the Department of Commerce, Medicaid and the Department of Corrections.
Before the governor can grab his veto pen, if he takes that route, the budget awaits debate in the House.
With so many differences of opinion, it’s likely the Senate and House will meet in conference committee to finalize the budget before sending it along to Sanford’s desk.
Scott Miller is a staff writer for the Business Journal. E-mail him at smiller@scbiznews.com.
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