News and Press Releases for June 2007

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6/26/2007

Governor Calls for Sustainable Spending

Governor Visits Businesses in Three Cities to Talk About Need to Hold Line on Spending

Columbia, S.C. - Governor Mark Sanford visited small businesses in Florence, Charleston and North Augusta today to talk about the need to hold government spending to a sustainable level and about the impact that not doing so could have on our state's finances in the long run.

Budget writers last week wrapped up work on a $7.4 billion spending plan that spends roughly $1.5 billion more than what was spent last year - a growth in new revenue higher than the entire budget of five other states. South Carolina's budget is poised to grow anywhere from 11 percent to 16 percent this year - depending on how growth is calculated - which is two to three times as fast as the average increase in citizens' personal income of about 6 percent growth. This year's budget will mark the third straight year of double-digit government growth, nearing a 40 percent growth clip over that time period.

The governor is currently considering which items to veto from the budget in an effort to decrease that overall growth rate. The governor said unless spending is controlled, the state could face future cuts to some of the most critical government services like education, healthcare, and law enforcement.

"While I would give real credit to the General Assembly for a number of good things that have happened this year, the final order of business is going to be how we choose to deal with this budget," Gov. Sanford said. "Even though more money has come into Columbia this year than ever before, we think in some cases a couple of ideas have been pushed aside to make way for more spending. The chief among those principles is the idea of first things first. Good times won't last forever, and the fact is that our state has $9 billion in unpaid for political promises that we ought to do more toward addressing this year. Second, the idea of sustainable spending is incredibly important, so that government doesn't grow faster than people's ability to pay for government, and we end up with cuts to the services that hurt the people who need them most. As we continue to look at and ultimately veto lines in this budget, it's important the people make their voices heard on both of those fronts."

The governor's budget called for $439 million toward the state's $9 billion unfunded healthcare liability, compared to just over $60 million in the legislature's budget. The budget also increases the level of annualizations - the practice of paying for year-after-year promises with one-time money - to more than $270 million. That effectively means that the state's tax revenues will have to grow by four percent next year just for the state to break even, and will have to grow by substantially more than that just to pay for ongoing core needs.