The Palmetto Insider

The blog of the South Carolina Policy Council

Local Aid to Subdivisions Cut

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In a budget year where House legislators ignored the opportunity to make targeted cuts to a number of nonessential services of government – State Museum, Arts Commission and Human Affairs to name a few – at least one fund is seeing a sizeable reduction.

Local aid to subdivisions – tax dollars shifted directly to localities – has been cut from $244 million to $216 million.

And while some localities will likely cry foul about the reduction – the reality is many local budgets have continued to grow despite the state cuts.

Moreover, discouraging localities from depending too heavily on state revenue is a good thing, just as the state should not be as dependent as it is on federal funds.

If municipalities are growing beyond the revenue they bring in, the appropriate response would be to scale back on spending. As the Policy Council has written, it is irresponsible to fill recurring spending holes with nonrecurring money – like federal dollars at the state level or state appropriations at the local level.

House Ways and Means Chair Dan Cooper defended the cut during the House’s recent budget debate, arguing that localities did not need the state funding – as evidenced by a 3 percent increase in government hiring at the local level during the previous year.

But why not apply the same logic to  the rest of government? For instance, by lowering fines and fees that result in excess revenue for agencies. Or, even better, implementing zero-based budgeting with the aim of reviewing the effectiveness of each appropriation.

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Written by Geoff Pallay

April 8, 2010 at 8:42 am

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