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LEGISLATURE OVERSPENDS BY $81 MILLION, FORCING CUTS TO VITAL PROGRAMS

August 17, 2007

Columbia, S.C. – Governor Mark Sanford today renewed his call for sustainable spending at the state level given yesterday’s report by Comptroller General Richard Eckstrom that state revenue growth has slowed, meaning this year’s legislative budget overspent by $81 million. The fact that budget-writers grew government faster than people’s ability to pay for it now forces the state to cut public education funding and reduce the amount going to the retiree health care trust fund. Earlier this summer budget writers completed work on a $7.4 billion spending plan that spends roughly $1.5 billion more than what was spent last year. The state’s budget grew roughly 16 percent since last year alone, and nearly 40 percent over the past three years – which is two to three times as fast as the average increase in working South Carolinians’ income. The legislature’s budget also increased the level of annualizations – the practice of paying for year-after-year promises with one-time money – to more than $270 million. “While some in the legislature have already claimed that this $81 million shortfall is miniscule compared to the entire budget, I still think it signals something we’ve been talking about for several years, and especially this past budget cycle – that growing government by more than double the growth of our state’s economy is not sustainable and it will have consequences,” said Gov. Sanford. “We’ve had solid growth for several years, but you simply cannot grow government faster than the underlying economy and expect anything other than this outcome. I furthermore fear and predict that more pain will come with regard to budget excess over the months and year ahead. In some ways it is even tragic that because some in the legislature didn’t take into account that good times won’t last forever, now painful cuts will be made – namely, less money for our retired state employees’ health care trust fund and for public education in counties like Beaufort and Charleston – while millions of taxpayer dollars continue to flow to legislators’ pet projects. “This outcome highlights two things – one is the importance of the tug of war we’ve had on spending, and our efforts to slow down the unsustainable course many in Columbia have set us on. And two, the generational divide within the state Republican party as there are many new to the General Assembly who have been allies with us in calling for sustainable spending, while some of the longer serving Republicans – many of whom served under different political banners for years – do not hold the same beliefs on the importance of watching out for the taxpayer here in South Carolina.”