A tight situation
General Assembly
Published: Monday, January 7, 2008 ARTICLE OPTIONS
Suppose you had always wanted a bigger house. You and your spouse want a dining room, a larger yard and separate bedrooms for the kids. But you could never afford it.
Then last year, your employer had an exceptionally good year and gave you a large unprecedented bonus. You used that larger income to make a down payment on a much larger home and convince the bank to give you a bigger mortgage.
This year, you still have those big mortgage payments, but no large bonus is coming your way. There's no way your income will cover your mortgage and all your other bills.
That's similar to the situation the General Assembly finds itself in this year. Last year, it got a big bonus, almost $1.5 billion in new money. Much of it was money that was only available last year. But lawmakers used that money to expand programs that have to be funded every year.
Now they have more expenses than they have income. And we're not talking about small amounts.
The General Assembly added $114 million in one-time money into the general budget, spending it across state government. It used as much as $80 million in one-time money to pay for other programs that have to be funded every year, such as school bus fuel and maintenance. That leaves the state with almost $200 million in expenses it doesn't have income to cover.
And that's before state agencies and constituencies start asking for more money. The overall shortfall lawmakers are looking to cover is $317 million. And that doesn't include important matters like paying down the unfunded liability in the state retiree health care plan.
Spending one-time money on recurring expenses is called annualization, and lawmakers continually pledge to stop it. They just don't keep the pledge.
Annualization is just a method of overspending. Lawmakers overspent last year. They saw the opportunity to expand state government, and they took it. Now they have a government that is too large and too expensive to fit the state's income.
Instead of obligating themselves to a larger set of expenses, the legislature would have done better to put more money aside. Then we would have a leaner state government better able to live within the current budget picture. And we would have funds available to cover any shortfall.
Yet when asked at a legislative-media workshop last week, lawmakers expressed no regret for their spending last year. South Carolinians can only hope their lawmakers are just reluctant to admit their mistake and not failing, once again, to learn from it.