Tom Young talks state budget, government restructuring, taxes

With a $5 billion general fund budget that is $2 billion less than it was two years ago, the S.C. General Assembly could face another $980 million shortfall in 2011, S.C. Rep. Tom Young said Thursday.

“We need to prioritize spending,” he told Aiken Sunrise Rotary members. “There’s a zero-based budgeting requirement for the 2011 preparation of the budget. We need to do that to get a handling on spending.”

One problem, Young said, is that the budget is so dependent on sales tax revenue that has decreased in recent years. South Carolina needs comprehensive tax reform, he said, and a state commission is scheduled to make recommendations for reform later this year.

For some reason, Young said, that commission was instructed not to consider changes to Act 388, a property tax reform measure that in part substituted sales tax revenue for property taxes on owner-occupied homes for school operations. An effort to amend another provision, one that would limit market value increases when a home is sold, didn’t make it through the legislature.

Young expressed hope the S.C. Tax Realignment Commission (TRAC) will go ahead and look at Act 388 on its own initiative.

Many S.C. residents, he said, may not realize that the total state budget is around $20 billion. About $8 billion comes from the federal government, much of it going directly to state agencies where the legislature has little input, Young said. There is also a third fund of $7 million that comes from fines and fees.

“We have to take a serious look at how the ‘other fund’ money is spent, whether it’s a carryover for state agencies,” Young said. “We also have more than $2.7 billion in state sales and user tax exemptions. Some of those exemptions date back to 1951, and we need to see how many of them actually make sense.”

Another key issue that will return in 2010 is government restructuring. The S.C. Constitution, written in 1895, gave the most authority to the state legislature. The intent, said Young, was to curtail the power of the governor; white lawmakers then feared an African-American might be elected at a time when the state had a higher minority population.

The governor’s role is further diminished by the Budget and Control Board, a five-member committee that includes the governor, who is often outvoted on policy and financial decisions, Young said. The General Assembly needs to act to take the issue of reform to the voters, he said.

Young filed individual bills last year that would end the election of six constitutional officers, including the superintendent of education, and put them within the cabinet of the governor. However, only the bill for the secretary of state got out of the House and went nowhere in the Senate.

As the next legislative session approaches, Young expressed concern that some important bills were approved in the House, only to be thwarted in the Senate.

“We have some problems in the Senate,” he said. “But the two senators from our area who represent most of Aiken – Shane Massey and Greg Ryberg – are not holding up legislation. People in other parts of the state are affecting some of these bills. We need to change the rule of allowing one senator to hold up a bill.”

By Rob Novit, “The Aiken Standard”

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