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South Carolina state budget

South Carolina
Annual
Fiscal Year 2012
Signed into law June 28, 2011
GF Revenue


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 is currently considering the governor's proposed FY2012 budget and drafting it's own version.[3]

South Carolina has a total state debt of approximately $56,539,512,000 when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the budget gap. [4]

See also: The South Carolina State Budget on State Budget Solutions
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 Health care Education Welfare Protection Transport Deficit
$21.2 $0 $3.2 $6.8 $0.4 $1.7 $0.6 $22.7

[edit] FY2013 State Budget

The state Board of Economic Advisors added nearly $1 billion to the FY2013 state budget. Gov. Nikki Haley has said she believes any new money in the state budget either should go toward the state pension deficit or be returned to taxpayers as a tax rebate, but some legislators have said they believe the money should be used to restore cuts previously made to state agencies' funding.[7]

Legislative Proposed Budget

The Senate approved a $6.6 billion FY2013 proposed budget on May 16, 2012. The budget adds additional judges, which lawmakers said was necessary because South Carolina's general court judges have the highest caseload nationwide. The budget bill now goes back to the House.[8]

Pensions

The Senate Finance Committee to increase state workers’ contributions to the state workers’ retirement system to 8 percent of their pay from 6.5 percent.[9]

[edit] FY2012 State Budget

The South Carolina Budget Control Board voted on Aug. 8, 2011, to increase insurance premiums for both employees and the state by 4.5%, saying that the had to do so to ensure that the system is sound and has the money required to meet employees' health care needs. [10]

The state budget for FY2012 as detailed in the passed appropriations bill can be found here.

South Carolina is spending $199 million on principal and interest payments for the state debt of $1.86 billion.[11]

[edit] Legislative Budget

The legislature approved a $6 billion state budget on June 22, 2011. The Senate passed the plan by a vote of 24-17 vote after the House approved it with a vote of 57-54 vote. In the House both Democrats and Tea Party-leaning Republicans voting against the plan.[12]

On June 28, 2011, Gov. Nikki Haley vetoed $213 million in proposed state spending, including $106 million in the state’s proposed $6 billion general fund budget and 107 million in spending from a separate state reserve fund.[13] The vetoes included[13]:

  • The entire $1.9 million budget for the state Arts Commission
  • $6 million for the Educational Television network
  • State money to pay for the 2012 Republican presidential primary
  • $5.5 million for tourism advertising
  • $38 million for maintenance at state colleges
  • $13 million for the state’s technical schools to train workers for Boeing’s new North Charleston aircraft plan

Gov. Haley pointed out that with her vetoes, she said, classroom funding would increase by more than $100 million over FY2011.[14]

Education

The approved spending plan raises the state’s per-student spending to $1,880 from its current $1,615, but does not meet the $2,720 required by a state school funding formula.[12]

Medicaid

The budget the legislature passed makes permanent Medicaid program cuts at the Department of Health and Human Services, which in early 2011 eliminated or reduced a variety of Medicaid services, including adult dental and vision services and the home health care visits. The budget additionally cuts $125 million from reimbursements to doctors, hospitals and other caregivers. Although some hospitals have cautioned the reductions will force some to cut staff, although the state Medicaid agency is dubious of that claim.[12]

Negotiations

A conference committee comprised of three Senators and three Representatives met on June 8, 2011, and adopted portions of the budget that were the same in both chambers' version of the budget. The biggest issues still to be resolved are how much state revenue should go to schools and how much to lower unemployment taxes for businesses with records of firing people.[15]

The Senate's proposed budget could social safety net programs but saves more teaching jobs than once expected and also offers businesses a $100 million tax break. The proposed budget cuts $125 million from reimbursements to doctors and hospitals. Other cuts include $9.5 million less in general taxpayer funds on public schools. That's after budget writers cut $19 million from a national teacher certification program and nearly $4 million from physical education programs. The budget does add $25 million in general taxpayer funds for public charter schools. Legislators used surpluses and reserves to pay for school operations, including $97 million to cover per-student classroom spending and $20 million to help wealthier school district avoid losing money under state's school funding formula.[16] The Senate budget puts an additional $105 million into schools, increasing per-student spending to $1,959 from the current $1,617, less than the $2,720 a state school funding formula says is required.[15]

The House approved a FY2012 state budget bill which includes General Fund appropriations of $5.2 billion.[3][17] It reduces aid to public schools by at least $74 million and colleges will lose more than $16 million.[18] Colleges and universities will see reserve cash to pay for overdue maintenance projects.[16] Overall, the House budget increases spending by 3.5% and general fund spending will rise over 7%.[17]

[edit] Governor's Proposed Budget

Eight days prior to leaving office, Gov. Sanford released the FY2012 state budget.[19] How much influence the outgoing governor's budget will have is unknown.[19] His budget included measures such as a 5% salary reduction for any state worker making more than $35,000 a year, saving the state $98 million; having state workers take two unpaid holidays to save nearly $13 million; and reducing overhead at state colleges by $68 million.[19]

House Ways and Means Committee Chairman Dan Cooper said that he worked with Governor-elect Nikki Haley's fiscal crisis panel. He also said that the committee write the first legislative draft of the budget and Haley's proposals to trim a shortfall that could top $800 million would be incorporated there or later on the House floor.[20]

Haley's cuts include[3]:

  • $1 million for the 2012 presidential primary
  • $16 million from state worker health care spending
  • nearly $2 million from the state Arts Commission
  • $5 million from a University of South Carolina aviation and research program
  • $1 million from pay to lobbyists who work for state agencies.

Various committees in the state house are exploring the state's budget options. The Tax Realignment Commission is "a temporary and independent commission comprised entirely of non‐legislators, was created to assess the effectiveness of the state’s current tax structure and, in doing so, make recommendations to the General Assembly regarding necessary changes, if any, to that structure."[21] the State Agency Restructuring Study Committee is considering government efficiency.[22] The House Ways and Means Committee is considering eliminating 10 days from the school year, which would save $210 million.[23]

Haley is also urging new limits on what the state can spend, in a proposal that would refund any extra revenue back to the public. She has also proposed eliminating the state's corporate income tax.[24]

[edit] Budget transparency

South Carolina Spending Transparency is the publicly available website created by the South Carolina government. It discloses information about South Carolina's spending, and is managed by the Comptroller General. South Carolina's current Comptroller, Richard Eckstrom, has written extensively on the importance of state and local transparency.[25] 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 is available through my office’s site (www.cg.sc.gov), is serving as a national model for other states attempting their own transparency initiatives. Several states have contacted me hoping to duplicate our open-government ideas."[26]

[edit] Government tools

The South Carolina Spending Transparency database provides a searchable expenditures database.

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

Criteria for evaluating spending databases
State DatabaseSearchabilityGrantsContractsLine Item ExpendituresDept/Agency BudgetsPublic Employee Salary
SC Spending Transparency]Y
600px-Yes check.png
N
600px-Red x.png
Y
600px-Yes check.png
Y
600px-Yes check.png
N
600px-Red x.png
N
600px-Red x.png
See also: Evaluation of South Carolina state website

[edit] 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.[27]

[edit] Exempted accounts

In 2012, 13 state agencies pushed to make 65 separate accounts exempt from oversight, meaning that the money in those accounts could only be reviewed by people inside the agency. Agencies are allowed to apply for the status with the Budget and Control Board if "release of the information would be detrimental to the state or agency."[28]

[edit] FY2011 State Budget

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government here.

State spending amounts to $1,109 per resident in FY2011, compared to $1,275 for every state resident in the 1999-2000 budget.[22]

On November 10, 2010, the Board of Economic Advisers estimated that state revenue projections were $229 million higher than previously anticipated.[29] The revenue surplus, however, is insufficient to make up for the deficits in the state's Medicaid, food stamp and welfare agencies, which post total deficits of more than $270 million.[29]

[edit] Federal Funds

The state received approximately $290 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[30] $143.4 million of those federal funds were for education assistance but the the state did not apply for those funds because it does not meet minimum higher education funding requirements.[31][32]

[edit] Passage of the State Budget

The Senate passed its FY2011 $5 billion budget on April 30, 2010.[33] 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.[15]

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.[34] Stanford's vetoes could 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.[35]

The budget passed in the legislature reduces public school spending to 1995 levels, which could result in the loss of up to 2,800 teaching jobs while furloughs will carve 64,000 days and up to $20 million from teacher paychecks.[15] The spending plan puts $170 million in federal Medicaid bailout cash into long-standing programs for the state's disabled, elderly and poor.[15]

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.[36] Cuts varied from a one-year suspension of beach re-nourishment which saved approximately $3.2 million[33] to a decrease of 23% of the Attorney General's budget, saving $1.1 million.[37] 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.[33]

The House previously passed a $5 billion budget that included a $0.50 increase in the state's cigarette tax, which, if passed, is expected to generate $88 million for a special fund for health needs.[38] The Senate's budget proposal features 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.[38] In addition, the revenue would fund I-95 corridor economic development and a program for in-state marketing of produce.[38]

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]

[edit] 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.[39] The House sustained that veto, but that doesn't mean the Board will 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 this year.[40]

The Board voted to suspend capital projects at more than a dozen state colleges that have raised tuition costs above the national norm.[41]

[edit] Budget Background

The South Carolina Budget and Control Board (BCB) plays a key role in the general management of state government. This institution is 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 is 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 is the chief administrative officer for the Board and serves at the pleasure of the five members of the Budget and Control Board. His office is responsible for administration, operation of the Board divisions, and legal matters. Frank Fusco was named the Board's Executive Director on August 15, 2007.[42]

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 are 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 is the current balance.[43]

South Carolina's fiscal year begins July 1 and ends June 30 of the following year. Agency budget requests are submitted to the Governor by October, after which the Governor compiles his recommendation for the new fiscal year. Every January the Governor is 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 do not match a six member conference consisting of both House and Senate members is assembled to sort through the differences. The Governor has final say on the budget and has the power to veto sections. In 1998 the state Supreme Court ruled that the Governor cannot strike individual sentences. A two-thirds majority is needed in both Houses to override the Governor's veto. [44]

  • From 2004 to 2008, the South Carolina legislature's spending increased by 40 percent.[45]
  • FY 2006-07 and FY 2007-08 combined, the General Assembly spent an additional $1.3 billion in surplus revenues. [46]

[edit] Accounting Principles

Main article: 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. The audit reports are published online. Richard H. Gilbert, Jr. is Interim State Auditor.[47]

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 does 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 does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[48] South Carolina's CAFRs are 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 has served as South Carolina's Comptroller General since 2002.[49]

Credit Rating Fitch Moody's S&P
South Carolina[50] AAAAaaAA+

[edit] Stimulus

South Carolina has received $2.9 billion in federal funding.[51]

[edit] Public Employees

Main article: South Carolina public employee salaries
Main article: South Carolina public pensions

According to 2008 Census data, the state of South Carolina and local governments in the state employed a total of 290,248 people.[52] Of those employees, 241,725 were full-time employees receiving a net pay of $826,764,431 per month and 48,703 were part-time employees paid $48,338,796 per month.[52] More than 54% of those employees, or 159,155 employees, were in education or higher education.[52]

As of 2010, 15,224 employees in South Carolina make over $50,000/year. Their combined salaries equal $1,133,969,806.00.[53]

[edit] External links

[edit] See Also

South Carolina taxpayer-funded lobbying

South Carolina public pensions

[edit] 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. ↑ 3.0 3.1 3.2 Businessweek "SC House approves $5 billion spending plan" March 16, 2011
  4. ↑ State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  5. ↑ South Carolina Legislature, Executive Budget 2011-2012
  6. ↑ USA Spending, State Guesstimated* Government Spending
  7. ↑ The State "Scent of new money fuels agencies’ hopes" Nov. 29, 2011
  8. ↑ The State "SC senators give key approval to budget" May 16, 2012
  9. ↑ The State May 10, 2012
  10. ↑ WSPA.com "SC Budget Board Raises State Health Care Premiums" Aug. 9, 2011
  11. ↑ CNBC.com "SC Senate approves covering federal share of port" April 26, 2012
  12. ↑ 12.0 12.1 12.2 [ http://www.thestate.com/2011/06/22/1869530/sc-house-approves-6-billion-state.html The State "Legislators send governor $6 billion budget plan" June 23, 2011]
  13. ↑ 13.0 13.1 The State "Haley’s vetoes hit schools hardest" June 28, 2011
  14. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named vetoes
  15. ↑ 15.0 15.1 15.2 15.3 15.4 Forbes "Panel working out final SC budget compromise" June 9, 2011
  16. ↑ 16.0 16.1 Businessweek "SC Senate wrapping up work on $6 billion budget" May 16, 2011
  17. ↑ 17.0 17.1 The South Carolina Policy Council "Proposed House Budget Largest in South Carolina History" Visited March 2, 2011
  18. ↑ The Post and Courier "SC $5.2B spending bill wins OK, heads to House" Feb. 24, 2011
  19. ↑ 19.0 19.1 19.2 Bloomberg "SC Gov. Sanford releases final state budget" Jan. 5, 2011
  20. ↑ Businessweek "Top SC budget writer will help crisis panel" Nov. 24, 2010
  21. ↑ South Carolina Tax Realignment Commission
  22. ↑ 22.0 22.1 [The Charleston Post & Courrier "Despite cuts, South Carolina's budget woes will persist in 2011" Sept. 26, 2010 ]
  23. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named consider
  24. ↑ Stateline.org "South Carolina's Haley pushes tax cuts despite budget shortfall" Dec. 27, 2010
  25. ↑ Herald-Journal, "Urge local governments to put spending information online," December 28, 2008
  26. ↑ Herald-Journal, "Urge local governments to put spending information online," December 28, 2008
  27. ↑ South Carolina Executive Order 2007-14
  28. ↑ "13 agencies want to keep parts of their budgets secret," The State, February 7, 2012
  29. ↑ 29.0 29.1 Businessweek "SC budget gets glimmer of good news: $229M surplus" Nov. 10, 2010
  30. ↑ Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  31. ↑ CNNMoney.com "States playing fast and loose with teachers' jobs money" Sept. 20, 2010
  32. ↑ The Miami Herald "South Carolina falls short of requirements for federal education funds" Aug. 18, 2010
  33. ↑ 33.0 33.1 33.2 The Spartanburg Herald Journal "SC Senate approves budget after 17-hour session" April 30, 2010
  34. ↑ The Charleston Regional Business Journal "Sanford veto pen strikes budget 107 times" June 10, 2010
  35. ↑ Bloomberg Businessweek "SC House returning to deal with vetoes" June 15, 2010
  36. ↑ wspa.com "Taxpayers Face Fee Increases in SC Senate Budget" April 30, 2010
  37. ↑ Business Week "South Carolina budget has winners, losers" April 30, 2010
  38. ↑ 38.0 38.1 38.2 TheTimesandDemocrat.com "Senators say smokes, education, abortion will be part of budget talks" April 5, 2010
  39. ↑ The State "Budget keeps bleeding as lawmakers quit for year" June 30, 2010
  40. ↑ The Herald June 26, 2010
  41. ↑ Businessweek "SC budget board suspends college construction" Sept. 30, 2010
  42. ↑ South Carolina Budget and Control Board Web site, retrieved November 11, 2009
  43. ↑ Office of the State Budget Web site, retrieved November 11, 2009
  44. ↑ Children's Trust of South Carolina,"Budget Process," retrieved March 23,2009
  45. ↑ Wall Street Journal, "Two Governors and the GOP Future," February 20, 2009
  46. ↑ State of South Carolina,"Executive Budget: fiscal years 2009-2010," January 9,2009
  47. ↑ South Carolina Office of the State Auditor Web site, retrieved November 11, 2009
  48. ↑ Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  49. ↑ South Carolina Comptroller General Web site, retrieved November 11, 2009
  50. ↑ State of Indiana, “State Credit Ratings-as of June 24, 2009"
  51. ↑ Recovery, "Stimulus Spending by State"
  52. ↑ 52.0 52.1 52.2 2008 South Carolina Public Employment U.S. Census Data
  53. ↑ The South Carolina Budget and Control Board "Query State Salaries Over $50,000" Last checked March 1, 2011
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