The Palmetto Insider

The blog of the South Carolina Policy Council

A Real Spending Cap Could Have Prevented the Latest Round of Budget Cuts

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As widely reported, the Budget & Control Board (BCB) approved a 5 percent, across-the-board cut to the state budget yesterday . This action by the BCB may cause furloughs and layoffs for some state agencies and will greatly affect some of the core functions of government such as corrections and public safety.

While most press accounts focused on the doom and gloom associated with across-the-board cuts, noticeably absent was a discussion of how we got to this point and what can be done to keep it from happening again. The short answer: implement a spending cap. As discussed in a new Policy Council report released yesterday, the state’s current spending cap is completely ineffective. Had the General Assembly abided by a real cap – say between FY06 and FY08, when they blew through $1.1 billion in new spending – we’d have the money now to pay for core services.

Check out the report, as well as our Best/Worst guide, for more good taxation and spending ideas. Unfortunately, there are also several bad ideas that will be considered in the upcoming session that will exacerbate the budget problem. These include funding recurring spending with nonrecurring federal stimulus dollars, possible tax increases and other measures that will stifle economic growth.

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Written by SC Policy Council

December 16, 2009 at 10:09 am

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