The Palmetto Insider

The blog of the South Carolina Policy Council

Gov. Sanford Fires a Warning Shot Over the Budget

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Earlier this week, Gov. Mark Sanford sent a letter to the General Assembly detailing some of his concerns about a state budget bloated with extra spending and additional fine and fee increases.

The letter highlighted several items in the budget the governor is implying he will veto if it comes across his desk. Some of the problems he sees are as follows:

  • Maybank Money – This is money that is to come from stricter tax collection enforcement. Two problems here: 1) using nonrecurring dollars to fund core services; and 2) the money may not materialize. Last year, stricter enforcement efforts generated $48 million. The House budget plans on getting $45 million more this year. But the Senate increased that figure to $90 million. Agencies that would receive funding from this bounty include: $35 million for Aid to Subdivisions (local governments); and $11 million for the Department of Education (for school bus fuel). But what happens if this funding doesn’t materialize?
  • New fees are a major part of the budget, especially the Senate budget. All told, there are about $45 million in new fees. Among those: $22.7 million in driver’s license fees that will go to Public Safety; and a $50 filing fee for courts that will generate $16 million for the judicial branch.
  • Senate Operations funds are slated to increase by roughly $4 million. During a time when teachers may be furloughed, it seems inconsistent for the Senate to increase its own funding by almost 70 percent.

The governor’s letter also mentioned the $175 million in increased money from the federal government (Part IV of the budget) that will further place the state in a deep budget hole next year. A new twist, here, though, is that the money may not be approved by Congress.

Other budget problems not mentioned by the governor include:

  • The Budget and Control Board budget received a $1.9 million increase in the Senate budget.
  • Flexibility proviso, 89.87, authorizes an additional $1 billion in government spending – money that is not technically allocated in the budget. The Senate budget allows agencies to use Other Funds to make up for General Fund shortfalls – dating back to FY08-2009 levels ($6.7 billion).
  • The ongoing raiding of Other Funds dollars to maintain general agency expenditures and fund special projects.

Written by Geoff Pallay

May 7, 2010 at 1:11 pm

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