State House Update – Week of March 9-12, 2009

The House of Representatives spent this past week debating the budget. After many hours of debate and two late nights including one to nearly 3 a.m., we passed a balanced budget which does not raise your taxes. The House budget now goes to the Senate, then to Conference Committee, and finally to the Governor. A lot can happen to the budget between now and when the Governor gets it.

Much has been written about the federal stimulus money. Like most of you, I would not have voted for the stimulus in Washington. Now that the stimulus bill is law and the money is coming to the states, I have heard from many of you that we should accept the money that is available to South Carolina so that the money does not go to another state. South Carolina is supposed to receive $8 Billion in stimulus money over two years. Ninety-five (95%) percent of that money is being sent by the Federal Government directly to state agencies, cities, counties, and school districts with no state legislative oversight. The other five (5%) percent for this year is approximately $350 Million and is called “State Fiscal Stabilization” money. This is the only money over which the state legislature has any control. We, as taxpayers in South Carolina, will pay it back whether we accept it for use in our state or reject it so it can be spent in another state.

In understanding the state budget, it is important to know that about 75 percent of our state general fund budget is money that goes to K-12 education; higher education; law enforcement; and Medicaid. The other approximately 25 percent goes to the rest of the state agencies. Even after using the federal stimulus money for education, law enforcement, and Medicaid, the House had to find places in the other 25% to cut to balance the budget. The House budget writers estimated that those cuts would have to equal about $125 Million for a balanced budget. (Remember that even before additional cuts, the state is facing a revenue shortfall of over $1 Billion and there have already been three cuts made to the current budget since last July.) If the House rejected the federal stimulus money for education, law enforcement, and Medicaid, then the House would have to cut nearly $400 Million from the budget on top of the $125 Million. Those cuts would mean substantial impacts including up to another 4,000 teachers laid off; 5 prisons closed; and 3,500 prisoners released early into the general population. Like most of you, I want to do everything possible for our state to avoid such layoffs and closings on top of the nation’s second highest unemployment rate at 10.4%. Thus, the House voted to accept the stimulus money and was able to find a way to balance the budget without raising taxes simply to meet General Fund requirements.

The Governor did not tell the House his position on the “fiscal stabilization” portion of the stimulus money until the day after the House voted to accept the money and after the House finished most of the budget debate. Even including this money, the House general fund budget this year will be over $1 Billion less than last year due to the well documented revenue shortfall. The Governor is right about budget annualizations and that is why the House leadership told state agencies to expect larger cuts next year and the following year as state government makes more cutbacks and weans itself from the federal stimulus money.

Locally, concerns have been raised about the aid to local governments fund being cut. The House budget writers proposed a $122 Million cut to local governments receiving these funds. This would mean a return to mid 1990s state funding for local governments. I made it clear to the House leadership that I would not support a cut of that amount. With input from Mayor Cavanaugh; County Administrator Clay Killian; and Councilman Gary Bunker, I worked with other members to find a way to keep reductions to this fund as low as possible. The House budget that passed funds local governments at the 2005/2006 levels (a $50 Million cut instead of $122 Million) like other areas of state government and provides flexibility to local governments over their state appropriated funds as those governments also deal with the current fiscal crisis.

Recently, I filed a bill two weeks ago to require that students under the age of 18 without a high school diploma who drop out of school lose their driver’s license. The bill provides that a student can keep the license even if dropping out if the student meets certain hardship requirements such as needing to go to work to support himself or his family. The bill further provides that students who bring alcohol to school; who bring illegal drugs to school; or who assault a teacher at school will lose their driver’s license. Also, I filed a bill as cosponsor to enact the “South Carolina Fiscal Accountability Act” which will require the legislative audit council to conduct evaluations of programs of certain state agencies and departments to determine if these programs have outlived their usefulness; will provide for a procedure to implement recommendations after such evaluations; and will require “zero-base” budgeting principles in preparation of the state’s budget.
The Governor’s Nuclear Advisory Committee met this week in Columbia. We voted unanimously to ask the Governor to contact the Department of Energy as to the decision to abandon Yucca Mountain as the Nation’s future repository for highly radioactive wastes, including spent nuclear fuel from commercial and governmental programs as well as materials from the Cold War. We also consider it imperative that the DOE solicit and address the concerns of key stakeholders in any decision regarding nuclear waste disposal. We urge the Governor and the Congressional delegation to insist that the interests of South Carolina be represented on any panel convened to determine the permanent disposition of highly radioactive wastes.
During this week, I attended the ribbon cutting for the new Woodside Plantation Aiken Design Center. Additionally, I talked with many of you about lots of issues including the cigarette tax; the Graniteville/Vaucluse water system; education funding; conservation; road and drainage concerns; and the point of sale property tax provision. Your opinions and recommendations are very helpful to me.

Thank you for the privilege and the opportunity to represent you. I am determined to work on your behalf to make our State Government more efficient; effective; and accountable.

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