The Palmetto Insider

The blog of the South Carolina Policy Council

Reading Between the Lines: The Senate Budget Increases Spending

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Don’t believe everything you hear in the media about the budget. The Senate officially took up the budget yesterday, and there have already been many proclamations about the dire state of revenue.

In reality, as the Policy Council reported yesterday, the Senate budget is actually higher than the House version. And both budgets are higher than last year’s appropriation bill. The only part of the proposed FY10-2011 budget that’s smaller is the General Fund, and the cuts are more than offset by increases in federal money and revenues from fines and fees in the fast-growing Other Funds budget.

The Total Senate budget ($21.161 billion) increases spending by $60 million from the House version ($21.101 billion):

  • General Fund: Increases from $5.068 billion in the House-passed bill to $5.086 billion — a net change of about $18 million.
  • Other Fund: Increases from $7.765 billion to $7.807 billion – an increase of $42 million.
  • Federal Funds: Remain the same at $8.268 billion

Let that sink in.

Lawmakers are talking about budget cuts, but the total budget bill allows for more government spending than last year’s budget bill.

This is because Senators are only talking about the General Fund – the “$5 billion spending bill. But the General Fund is the smallest slice of the budget pie. The total budget includes more than $15 billion in supplemental funding to the budget in the form of Other Funds and Federal Funds budgets. A large portion of that money comes from fee and fine increases – which have been driving increased government spending for years.

The focus on the General Funds budget creates misleading impressions about state spending. “We’re going to be living on a 1995 standard when we should be living on 2010 standard,” said Clarendon Sen. John Land in a statement to the media.

One assertion made by a local media outlet is that, “The deepest cuts will come to education, not just to K-12, but to higher education as well, which will see funding levels at their lowest in 25 years.”

Perhaps some digging should be done on the true state of those budgets. Here are the facts:

Higher ed funding — as portrayed in the Summary Control document – is $664 million. The General Fund will then reduce $91 million in funding. But that is more than offset by $117 million in additional funding from the federal stimulus program, and increased enforcement of tax collections.

Add it up, and higher ed spending increases by $26 million.

The K-12 budget is a similar story: Using last year’s agency base of $1.9 billion, the Senate budget would increase K-12 spending by $90 million. This number comes from a $103 million General Fund cut, $13 million increase from Department of Revenue enforcement, $176 million from the stimulus, and $3 million from increased Federal Medical Assistance Percentages.

The General Fund is indeed down, but the total budget – the numbers that we should be talking about – are up.

Several amendments were introduced yesterday that would start prioritizing spending – an important step toward greater budget transparency and accountability.

Time will tell as to whether Senators can follow through on prioritizing spending – like getting out of the golf course ownership business – and ensuring funding goes to core functions of government.

Read The Palmetto Insider, The Nerve and SC Policy Council for updates on the budget debate.

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Written by Geoff Pallay

April 28, 2010 at 12:37 pm

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