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South Carolina state budget (2009-2010)

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South Carolina's $5 billion state budget for FY2011 was passed on time[1] and reduced a budget gap for FY2011 using furloughs, targeted cuts, agency reorganization, reducing local aid an tapping into the state's rainy day fund.[2] The legislature was currently considering the governor's proposed FY2012 budget and drafting it's own version.[3]

South Carolina had a total state debt of $31,097,531,391 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.[4]

2011 State spending & deficit in billions[5]
Total spending Health and protection services Education Econ dev Protection Government Debt service Nat resources
$23.1 $11 $7.8 $1.7 $0.88 $1.1 $0.19 $0.17
2011 Local spending & deficit in billions[6]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$21.2 $0 $3.2 $6.8 $0.4 $1.7 $0.6 $22.7

FY2010 State Budget

See also Archived South Carolina state budgets

The state finalized its FY 2010 budget in May of 2009, passed by the South Carolina Legislature on May 13, 2009 and signed (with some vetoes) by Gov. Mark Sanford on May 19.[7]

South Carolina Budget and Control Board (See "Budget Background" for more information about the BCB) ordered 4% across-the-board cuts to South Carolina’s budget on September 3, 2009 due to lagging revenue collections to address an estimated $200 million deficit for the current fiscal year.[8] First quarter FY 2010 General Fund revenues from July to September 2009 declined 6.3% from the previous year, $1.555 billion 2008 to $1.458 billion 2009. Individual income tax collections declined 6.2% and sales taxes declined 6.8% for the first quarter.[9] The state made $566.5 million in cuts to the FY2010 budget after it was passed.[2][10]

South Carolina's FY 2010 budget that started July 1, 2009 was composed of 5 major funds:[11]

General Funds $5.7 billion
Federal Funds $7.8 billion
Earmarked Funds $4.6 billion
Restricted Funds $2.6 billion
Total Funds $20.7 billion

49.6% of General Funds were appropriated for K-12 and higher education. Health and social rehabilitation agencies received 24.5% of the General Funds appropriated; from all funding sources however, health and social rehabilitation agencies received 43.8%.[12]

FY 2010 budget revenue for all funds was $8 billion, $5.7 billion of which was General Funds. The top 5 state revenues are:[13]

Individual Income Tax $2.5 billion
Sales Tax $2.2 billion
Insurance Tax $174 million
Corporate Tax $129 million
Beer and Wine Tax $107 million

South Carolina also had a $98 million shortfall from FY 2009. The Budget Control Board approved in September 2009 Comptroller General Richard Eckstrom taking funds from some state agency accounts that would not be used until later in the fiscal year to cover the FY 2009 deficit with the understanding the transfer would be paid back.[14] Regarding the 4% cuts, Gov. Mark Sanford previously had argued the Legislature should deal with budget shortfalls by coming into session and making targeted spending reductions. But this time, he said waiting until lawmakers come back into session in January would give agencies much less time to absorb the cuts, making the cuts even more painful.[15]

Budget background

See also: South Carolina state budget

The South Carolina Budget and Control Board (BCB) plays a key role in the general management of state government. This institution was unique to South Carolina and provided a broad array of services to other parts of the public sector as well as administrative and regulatory functions. The Board was made up of the Governor, the Treasurer, the Comptroller General, the Chairman of the Senate Finance Committee, and the Chairman of the House Ways & Means Committee. Created in 1978, the Executive Director was the chief administrative officer for the Board and serves at the pleasure of the five members of the Budget and Control Board. His office was responsible for administration, operation of the Board divisions, and legal matters. Frank Fusco was named the Board's Executive Director on August 15, 2007.[16]

The General Reserve Fund balance must equal 3% of General Fund revenue and may be withdrawn only for the purpose of covering operating deficits. If amounts were withdrawn from the Reserve Fund, the South Carolina Constitution provided a schedule for restoring the Reserve within three years. For Fiscal Year 2008-2009, the General Reserve had a balance of $108.1 million; however, this balance was eliminated to help offset a year-end deficit. The FY 2009-10 contribution to the General Reserve Fund was $63.9 million, which was the current balance.[17]

South Carolina's fiscal year begins July 1 and ends June 30 of the following year. Agency budget requests were submitted to the Governor by October, after which the Governor compiles his recommendation for the new fiscal year. Every January the Governor was required to submit an Executive budget to the Legislature containing an itemized plan of proposed expenditures, the amount appropriated for the last preceding appropriating year and for the current year. Following a series of meetings the House and the Senate pass a version of the budget. If both versions did not match a six member conference consisting of both House and Senate members was assembled to sort through the differences. The Governor had final say on the budget and had the power to veto sections. In 1998 the state Supreme Court ruled that the Governor cannot strike individual sentences. A two-thirds majority was needed in both Houses to override the Governor's veto.[18]

  • From 2004 to 2008, the South Carolina legislature's spending increased by 40 percent.[19]
  • FY 2006-07 and FY 2007-08 combined, the General Assembly spent an additional $1.3 billion in surplus revenues.[20]

Budget figures

The following table provided a history of South Carolina's budgeted spending in recent years. Figures were based on the budgets as they were ratified by the legislature, and did not take budget cuts into account:

Fiscal Year Total Expenditures Change from Previous Year
2008 20,858,585,100[21] 2.9%
2007 20,266,849,917[22] 5.3%
2006 19,242,459,434[23] 6.7%
2005 18,033,783,808[23] 7.2%
2004 16,818,721,431[23] 9.0%
2003 15,424,866,119[23] 2.4%
2002 15,060,995,600[23] 2.2%
2001 14,730,477,146[23] 6.1%
2000 13,889,209,525[23] n/a

Accounting principles

See also: South Carolina government accounting principles

The South Carolina Office of the State Auditor performs financial audits of state agencies, the annual financial audit of the State's General Purpose Financial Statements, and the annual Single Audit of the State's Schedule of Expenditures of Federal Funds. Audit reports were published online. Richard H. Gilbert, Jr. was Interim State Auditor.[24][25]

The Institute for Truth in Accounting (IFTA) rates South Carolina “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider South Carolina's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not included significant liabilities for the pension plans and for other post employment benefits, such as health care.[26] South Carolina's CAFRs were annual publications of the South Carolina Comptroller General, the state's top accountant supervising state spending, keeping the state's books and maintaining accounting controls over state agencies. Richard Eckstrom had served as South Carolina's Comptroller General since 2002.[27][28]

Credit Rating Fitch Moody's S&P
South Carolina[29] AAA Aaa AA+

Economic Stimulus Package

South Carolina would receive approximately $290 million from the federal government under HR 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[30][31]

South Carolina was expected to receive approximately $2.8 billion from the $787 billion economic stimulus package ARRA 2009.[32] According to White House officials the stimulus bill was estimated to create or save 50,000 jobs.[33] However, believing the state's budget deficit resulted from irresponsible spending, not actual need, Governor Sanford vocally opposed the American Recovery and Reinvestment Act of 2009. In taking this stance, Sanford conflicted with members of the state legislature. Despite the opposition of Sanford and others to a federal stimulus, some assert that opposition to stimulus funds would not be acted upon.[34] However, on March 11,2009 Gov. Mark Sanford became the first governor to announce that he rejected $700 million in federal stimulus money. The Governor said that he believes that the stimulus money would destabilize South Carolina's economy.[35] Sanford was quoted in The New York Times saying:

"We simply cannot afford to base 10 percent of our state budget on money that would disappear in two years’ time."[36]

Of the American Recovery and Reinvestment Act as a whole, Sanford said:

"What you're doing was buying into the notion that if we just print some more money that we don't had and send it to different states, we'll create jobs. If that's the case, why isn't Zimbabwe a rich place?"[37]

Gov. Mark Sanford speaks against the stimulus plan

According to preliminary reports South Carolina was expected to receive:[32]

  • $445.5 million to offset its budget deficit and education shortfalls
  • $1 billion in tax relief for South Carolinians
  • $882 million in extra Medicaid payments
  • $566 million in increased unemployment benefits
  • $482 million to build and repair roads and bridges
  • $335 million for low-income health insurance
  • $260 million for food stamps
  • $59 million for weatherization[38]

Budget transparency

South Carolina Spending Transparency was the publicly available website created by the South Carolina government. It discloses information about South Carolina's spending, and was managed by the Comptroller General. South Carolina's current Comptroller, Richard Eckstrom, had written extensively on the importance of state and local transparency.[39] He wrote in December, 2008, that:

"Earlier this year, I worked with Gov. Mark Sanford to create an easy-to-use spending transparency Web site. It contains detailed spending information for more than 80 state agencies, giving the public more access than ever to information about how state government spends its hard-earned tax dollars. This Web site, which was available through my office’s site (www.cg.sc.gov), was serving as a national model for other states attempting their own transparency initiatives. Several states had contacted me hoping to duplicate our open-government ideas."[40]

Recently, South Carolina agencies came under fire for spending $3 billion in "other" funds, which had little transparency on where funds came from or how they were spent.[41]

Government tools

The South Carolina Spending Transparency database provided a searchable expenditures database.[42]

The following table was helpful in evaluating the accessibility and scope of the information provided by the South Carolina Spending Transparency page.

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
South Carolina Spending Transparency Y
600px-Yes check.png
N
600px-Red x.png
Y
600px-Yes check.png
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png
See also: Evaluation of South Carolina state website

Economic stimulus transparency

  • South Carolina Comptroller General Richard Eckstrom had been choosen by the governor to lead a stimulus transparency group. Eckstrom plans a unique coding system to match up and track the stimulus money to ensure it was used for its intended purpose. The oversight group was also developing a website to let citizens monitor these funds

The South Carolina Spending Transparency database provided a searchable expenditures database.[44]


Support for creation of the database

Governor Mark Sanford signed South Carolina Executive Order 2007-14 on August 30, 2007. The order required the comptroller to compile and disclose information concerning how the state agencies of South Carolina allocate revenues.[45]

Public employee salary information

On South Carolina's state homepage, citizens can find a searchable state employee database.[46]

The State publishes a database of South Carolina government employee salary information. Users can search by a partial name, a partial agency name, or all employees in an agency. It also had handy lists of employees earning more than $150,000 and $100,000, along with the top 5 highest-paid employees by agency.[47]

The Sun News provided a state salaries database including the names, positions and salaries of state and local government employees making $50,000 or more a year in base salary.

External links

See also

South Carolina government sector lobbying

South Carolina state budget

South Carolina public pensions

References

  1. The Charleston Regional Business Journal "Sanford veto pen strikes budget 107 times" June 10, 2010
  2. 2.0 2.1 National Governors Association and National Association of State Budget Officers Fiscal Survey of States June 2010
  3. Cite error: Invalid <ref> tag; no text was provided for refs named bw
  4. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  5. South Carolina Legislature, Executive Budget 2011-2012
  6. USA Spending, State Guesstimated* Government Spending
  7. South Carolina General Assembly, "H. 3560 General Appropriations Bill for fiscal year 2009-2010 As Ratified by the General Assembly Title Page," July 2, 2009
  8. Independentmail.com, "Budget and Control Board cuts 4 percent from S.C. state budget," September 3, 2009
  9. South Carolina Budget Control Board, "BEA Working Group Meeting," October 15, 2009
  10. South Carolina Budget and Control Board
  11. South Carolina General Assembly, "H. 3560 General Appropriations Bill for fiscal year 2009-2010 As Ratified by the General Assembly," May 26, 2009
  12. Office of the State Budget Web site, retrieved November 11, 2009
  13. South Carolina General Assembly, "H. 3560 General Appropriations Bill for fiscal year 2009-2010 As Ratified by the General Assembly," May 20, 2009
  14. Independentmail.com, "Budget and Control Board cuts 4 percent from S.C. state budget," September 3, 2009
  15. WSPA.com, "SC Budget & Control Board Approves 4% Cut From Agencies Thursday," September 3, 2009
  16. South Carolina Budget and Control Board Web site, retrieved November 11, 2009
  17. Office of the State Budget Web site, retrieved November 11, 2009
  18. Children's Trust of South Carolina,"Budget Process," accessed March 23,2009
  19. Wall Street Journal, "Two Governors and the GOP Future," February 20, 2009
  20. State of South Carolina,"Executive Budget: fiscal years 2009-2010," January 9,2009
  21. [http://www.scstatehouse.gov/sess117_2007-2008/appropriations2008/tas87.htm South Carolina General Assembly, "H. 4800: General Appropriations Bill for fiscal year 2008-2009"]
  22. South Carolina General Assembly, "H. 3620: General Appropriations Bill for fiscal year 2007-2008"
  23. 23.0 23.1 23.2 23.3 23.4 23.5 23.6 Office of State Budget, "Historical budget information for each state agency?," September 13, 2006
  24. South Carolina Office of the State Auditor Web site, retrieved November 11, 2009
  25. The audit reports
  26. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  27. South Carolina Comptroller General Web site, retrieved November 11, 2009
  28. CAFRs
  29. State of Indiana, “State Credit Ratings-as of June 24, 2009"
  30. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  31. H.R. 1586
  32. 32.0 32.1 The State,"Its senators voted no, but S.C. would get billions from stimulus," March 10,2009
  33. American Recovery and Reinvestment Act,"Estimated job effect," accessed March 23,2009
  34. Washington Post, "Keep Your Stinking Stimulus," February 20, 2009
  35. Miami Herald,"S.C.'s Sanford makes it official, rejects $700 million stimulus," March 11,2009
  36. The New York Times,"South Carolina Governor Rejects Stimulus Money," March 20,2009
  37. CNN,"S.C. governor evokes Zimbabwe in arguments against stimulus," March 11,2009
  38. The Post and Courier,"S.C. to weatherize, boost green energy," March 18,2009
  39. Herald-Journal, "Urge local governments to put spending information online," December 28, 2008
  40. Herald-Journal, "Urge local governments to put spending information online," December 28, 2008
  41. Watchdog, S.C. agencies had spent $3 billion more in “other” funds, Sept. 22, 2010
  42. South Carolina Spending Transparency
  43. Wall Street Journal,"Stimulus Spending by State," March 12,2009
  44. South Carolina Spending Transparency
  45. South Carolina Executive Order 2007-14
  46. state employee database
  47. database of South Carolina government employee salary information