South Carolina state budget (2010-2011)

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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]

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.[3]

2011 State spending & deficit in billions[4]
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[5]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$21.2 $0 $3.2 $6.8 $0.4 $1.7 $0.6 $22.7

FY2011 State Budget

See also: Archived South Carolina state budgets'\

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government online.[6]

State spending amounted to $1,109 per resident in FY2011, compared to $1,275 for every state resident in the 1999-2000 budget.[7]

On November 10, 2010, the Board of Economic Advisers estimated that state revenue projections were $229 million higher than previously anticipated.[8] The revenue surplus, however, was insufficient to make up for the deficits in the state's Medicaid, food stamp and welfare agencies, which posted total deficits of more than $270 million.[8]

Federal Funds

The state received approximately $290 million from the federal government under HB 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[9] $143.4 million of those federal funds were for education assistance but the state did not apply for those funds because it did not meet minimum higher education funding requirements.[10][11][12]

Passage of the State Budget

The Senate passed its FY2011 $5 billion budget on April 30, 2010.[13] The House passed its version of the budget on June 3, 2010, and the Senate passed the final compromise on the budget with a 22-16 vote minutes before the Legislature's mandatory adjournment for the year.[14]

Then-Governor Gov. Mark Sanford vetoed 107 measures in the bill on June 9, 2010. The governor's vetoes cut slightly more than $100 million in spending from a general fund budget of about $5 billion, and also rejected of projected federal Medicaid money, keeping the state from spending an additional $214 million.[15] Stanford's vetoes were estimated to cut $29.5 million and 180 jobs from the state Budget and Control Board, $4.5 million and 179 jobs at the Department of Health and Environmental Control, as well as $3.2 million for state programs for childhood immunizations, restaurant inspections, rabies control and sexually transmitted disease testing - essentially shutting down those operations or rendering them impractical to operate, according to spokesperson Amy Merrick.[16]

The budget passed in the legislature reduced public school spending to 1995 levels, which some estimates said could had resulted in the loss of up to 2,800 teaching jobs while furloughs would carve 64,000 days and up to $20 million from teacher paychecks.[14] The spending plan put $170 million in federal Medicaid bailout cash into long-standing programs for the state's disabled, elderly and poor.[14]

Fees were increased, including $5 for a boat license, $2 more each for hunting and fishing licenses, a $5 increase in court fines and forfeitures in magistrate or state court and adds a new fee of $50 for each court deposition taken.[17] Cuts varied from a one-year suspension of beach re-nourishment which saved approximately $3.2 million[13] to a decrease of 23% of the Attorney General's budget, saving $1.1 million.[18] Lt. Gov. Andre Bauer, presiding over the Senate, ruled that a $6 annual automobile registration fee which was in the budget violated Senate rules because it changed permanent law, but the Senate overruled his decision.[13]

The House previously passed a $5 billion budget that included a $0.50 increase in the state's cigarette tax, which, if passed, was expected to generate $88 million for a special fund for health needs.[19] The Senate's budget proposal featured a $0.50 cent increase in the cigarette tax to raise an estimated $129 million in revenue that would be earmarked for a state Department of Health and Environmental Control smoking cessation program and a Medicaid trust fund to offset the effects of disease caused by smoking.[19] In addition, the revenue would fund I-95 corridor economic development and a program for in-state marketing of produce.[19]

The state used the following strategies to reduce the budget gap for FY2011: furloughs, targeted cuts, agency reorganization, reducing local aid an tapping into the state's rainy day fund.[2]

State Budget and Control Board

The State Budget and Control Board was comprised of the Governor, the Treasurer, the Comptroller General, the Chairman of the Senate Finance Committee, and the Chairman of the House Ways & Means Committee. Gov. Sanford vetoed the agency's entire $25 million operations budget for FY2011.[20] The House sustained that veto, but that didn't mean the Board would cease to exist. Sanford said that the board had access to at least $60 million in unrestricted accounts that could be accessed to cover the agency's operating expenses for the year.[21]

The Board voted to suspend capital projects at more than a dozen state colleges that raised tuition costs above the national norm.[22]

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 provides 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.[23]

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 provides 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.[24]

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.[25]

  • From 2004 to 2008, the South Carolina legislature's spending increased by 40 percent.[26]
  • FY 2006-07 and FY 2007-08 combined, the General Assembly spent an additional $1.3 billion in surplus revenues.[27]

Budget figures

The following table provides 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[28] 2.9%
2007 20,266,849,917[29] 5.3%
2006 19,242,459,434[30] 6.7%
2005 18,033,783,808[30] 7.2%
2004 16,818,721,431[30] 9.0%
2003 15,424,866,119[30] 2.4%
2002 15,060,995,600[30] 2.2%
2001 14,730,477,146[30] 6.1%
2000 13,889,209,525[30] n/a

Accounting principles

See also: South Carolina government accounting principles

The South Carolina 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. The audit reports were published online. Richard H. Gilbert, Jr. was Interim State Auditor.[31][32]

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 include significant liabilities for the pension plans and for other post employment benefits, such as health care.[33] 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.[34][35]

Credit Rating Fitch Moody's S&P
South Carolina[36] AAA Aaa AA+

Economic Stimulus Package

South Carolina should 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.[37]Cite error: Invalid <ref> tag; invalid names, e.g. too many

South Carolina was expected to receive approximately $2.8 billion from the $787 billion economic stimulus package ARRA 2009.[38] According to White House officials the stimulus bill was estimated to create or save 50,000 jobs.[39] 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.[40] 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.[41] 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."[42]

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?"[43]

Gov. Mark Sanford speaks against the stimulus plan

According to preliminary reports South Carolina was expected to receive:[38]

  • $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[44]

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.[45] 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."[46]

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.[47]

Government tools

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 provides a searchable expenditures database.[49]

One South Carolina project was noted in Senator Coburn and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. One project gave the state $897,000 to plant trees.[50]

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.[51]

Public employee salary information

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.[52]

The Sun News provided a state salary database including the names, positions and salaries of state and local government employees making $50,000 or more a year in base salary.[53]

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. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  4. South Carolina Legislature, Executive Budget 2011-2012
  5. USA Spending, State Guesstimated* Government Spending
  6. FY 2011 CAFR
  7. Cite error: Invalid <ref> tag; no text was provided for refs named persist
  8. 8.0 8.1 Businessweek "SC budget gets glimmer of good news: $229M surplus" Nov. 10, 2010
  9. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  10. CNNMoney.com "States playing fast and loose with teachers' jobs money" Sept. 20, 2010
  11. The Miami Herald "South Carolina falls short of requirements for federal education funds" Aug. 18, 2010
  12. H.R. 1586
  13. 13.0 13.1 13.2 The Spartanburg Herald Journal "SC Senate approves budget after 17-hour session" April 30, 2010
  14. 14.0 14.1 14.2 SC Legislature OKs final compromise on $5B budget June 3, 2010
  15. The Charleston Regional Business Journal "Sanford veto pen strikes budget 107 times" June 10, 2010
  16. Bloomberg Businessweek "SC House returning to deal with vetoes" June 15, 2010
  17. wspa.com "Taxpayers Face Fee Increases in SC Senate Budget" April 30, 2010
  18. Business Week "South Carolina budget had winners, losers" April 30, 2010
  19. 19.0 19.1 19.2 TheTimesandDemocrat.com "Senators say smokes, education, abortion would be part of budget talks" April 5, 2010
  20. The State "Budget keeps bleeding as lawmakers quit for year" June 30, 2010
  21. The Herald June 26, 2010
  22. Businessweek "SC budget board suspends college construction" Sept. 30, 2010
  23. South Carolina Budget and Control Board Web site, accessed November 11, 2009
  24. Office of the State Budget Web site, accessed November 11, 2009
  25. Children's Trust of South Carolina, "Budget Process," accessed March 23,2009
  26. Wall Street Journal, "Two Governors and the GOP Future," February 20, 2009
  27. State of South Carolina, "Executive Budget: fiscal years 2009-2010," January 9,2009
  28. [http://www.scstatehouse.gov/sess117_2007-2008/appropriations2008/tas87.htm South Carolina General Assembly, "H. 4800: General Appropriations Bill for fiscal year 2008-2009"]
  29. South Carolina General Assembly, "H. 3620: General Appropriations Bill for fiscal year 2007-2008"
  30. 30.0 30.1 30.2 30.3 30.4 30.5 30.6 Office of State Budget, "Historical budget information for each state agency?," September 13, 2006
  31. South Carolina Office of the State Auditor Web site, accessed November 11, 2009
  32. audit reports
  33. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  34. South Carolina Comptroller General Web site, accessed November 11, 2009
  35. CAFRs
  36. State of Indiana, “State Credit Ratings-as of June 24, 2009"
  37. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  38. 38.0 38.1 The State, "Its senators voted no, but S.C. would get billions from stimulus," March 10,2009
  39. American Recovery and Reinvestment Act, "Estimated job effect," accessed March 23,2009
  40. Washington Post, "Keep Your Stinking Stimulus," February 20, 2009
  41. Miami Herald, "S.C.'s Sanford makes it official, rejects $700 million stimulus," March 11,2009
  42. The New York Times, "South Carolina Governor Rejects Stimulus Money," March 20,2009
  43. CNN, "S.C. governor evokes Zimbabwe in arguments against stimulus," March 11,2009
  44. The Post and Courier, "S.C. to weatherize, boost green energy," March 18,2009
  45. Herald-Journal, "Urge local governments to put spending information online," December 28, 2008
  46. Herald-Journal, "Urge local governments to put spending information online," December 28, 2008
  47. Watchdog, S.C. agencies had spent $3 billion more in “other” funds, Sept. 22, 2010
  48. Wall Street Journal, "Stimulus Spending by State," March 12,2009
  49. South Carolina Spending Transparency
  50. "Summertime Blues, 100 stimulus projects that give taxpayers the blues" August 2010
  51. South Carolina Executive Order 2007-14
  52. The State database of South Carolina government employee salary information
  53. The Sun News state salaries database