Governor Sanford’s Executive Budget to Call for Spending Reforms

SPENDING PLAN WILL CALL FOR SPENDING CAPS, TRANSPARENCY, LIMITS ON ANNUALIZATIONS

Columbia, S.C. - December 17, 2007 - Governor Mark Sanford today released another preview of his forthcoming Executive Budget, a series of measures aimed at reforming the way the state spends money. Specifically, the budget will call for three types of spending reform: caps on spending, more transparency in the spending process, and limits on using one-time money for ongoing expenses.

“We’re heading into what by all accounts is going to be a difficult budget year, largely because our state spent too much too quickly when times were good,” Gov. Sanford said. “In fact, over the past three years government has grown by more than 40 percent - a rate far greater than that of the average South Carolinian’s paycheck. These budget reforms are tied to a few principles that I’ve found make sense to most South Carolinians. One, government shouldn’t grow faster than the underlying economy. Two, people ought to know exactly what they’re getting for their tax dollars. Three, government shouldn’t be able to make ongoing promises with money it doesn’t have.”

Spending Cap: Governor Sanford’s Executive Budget will contain a recommendation for a spending cap that would prevent government from growing faster than the rate of population growth plus the rate of inflation. The spending cap is aimed at giving a greater degree of predictability to government spending growth, which would in turn help prevent cuts to important government services in years of slower growth.

Transparency: The budget will call for a law change that would require spending transparency, similar to the directive Gov. Sanford gave to his Cabinet agencies earlier in the year that requires them to provide a searchable database of many expenditures on their Web sites. Working together with the Comptroller General’s office, Cabinet agencies are required to have their databases up and running by March 8. The governor is calling for a new law that would require that same kind of transparency across state government, not just in Cabinet agencies.

Annualizations: The governor’s budget will call for a new law to limit annualizations - the practice of paying for ongoing needs with one-time money - to no more than 1 percent of total revenues, or about $70 million. By contrast, the current year’s budget contained $270 million in annualizations, in effect starting the state $270 million in the hole during the coming budget cycle.