Click here to find your legislator or to view the legislative website.
SC Club for Growth’s mission is to give a strong voice to South Carolina taxpayers and small businesses. In these challenging economic times, we believe it is also incredibly important to work together to find common-sense solutions for all South Carolinians. Last year, people across our state expressed their desire for reform – and we believe it’s important to tell you about some of their concerns:
Common-Sense Budgeting
In early March 2008 the SC House passed a preliminary budget that we think sets our state up for major problems in future years. Our biggest concern with the House’s budget is that it includes over $700 million in recurring expenses that are paid for with one-time monies. These “annualizations” strike us as incredibly short sighted given the fact that federal stimulus payments will end in two years – leaving massive budget holes to fill in future years.
For their leadership during the House budget debate, reformers in that body deserve praise for responsibly making targeted rather than across the board cuts, preventing stimulus dollars from going to Dept. of Education administrative costs, removing wasteful earmarks, and eliminating the “competitive” grants line item from the budget.
However, we think some opportunities were missed by House members who voted against common sense amendments that would have limited higher education tuition increases, banned taxpayer funded lobbyists, and ended the use of tax dollars to pay for TV ads featuring constitutional officers.
We are hopeful the final version of the budget will remedy the annualization problem and that the legislature will finally adopt zero-based budgeting and annual spending caps to end the incredibly unproductive “yo yo” approach to spending our state’s tax dollars.
Modernize Government
South Carolina’s antiquated government structure continues to prevent much-needed reforms. Our 1895 Constitution has led to redundant services and huge financial waste with little accountability. Just last fall the non-partisan Governing Magazine summed up our state’s situation in an article with the byline, “South Carolina still runs on its 1895 Constitution. Guess what? It doesn’t work.”
We also have nine constitutional officers – double the national average. This has led to a system of opposing agendas and the withholding of critical information. Can you imagine the dysfunction if Sarah Palin had been elected as Barack Obama’s vice president? In South Carolina, this type of crazy scenario can occur. That’s why our members support giving every South Carolinian a chance to vote in a 2010 statewide referendum on whether constitutional officers should continue to be elected, or appointed by the governor beginning in 2014.
Make Agencies More Accountable
Structural changes would allow more accountability in state government and also save taxpayers millions. It is for this reason we continue to advocate for a Department of Administration to assume the day-to-day duties of the Budget and Control Board. The lack of accountability in our current system allows taxpayers to be ripped off through items like the $22 million no-bid state contract that was given to the same family for over 20 years. When it was finally uncovered and bid out, taxpayers saved $3.7 million annually – but no one lost their job or was held accountable for decades of waste.
Additionally, a report from the Legislative Audit Council strongly recommends consolidating our state’s health and human service agencies in order to both provide better client care and save millions in administrative redundancies. The lack of Executive Branch accountability related to the recently publicized problems at DDSN and DHEC are merely the most current examples pointing to the need for a consolidated system as recommended by the LAC.
We will also be tracking efforts to bring the Employment Security Commission and State Ports Authority into the Cabinet with directors appointed by the governor, as these actions will provide more accountability and better coordination amongst economic development agencies. In fact, the first Senate bill we scored in this new session was the recently passed ports legislation as it both reduces accountability and decreases the likelihood for enhanced private sector partnerships at the State Ports Authority.
Reduce the Burden on Taxpayers
We know some will be tempted to raise taxes and fees given the tough budget decisions in state government. However, the families paying for potential increases are also dealing with difficult financial situations. We are confident that lowering our state’s job-killing income taxes to more competitive rates will stimulate investment and create jobs.
Additionally, while the proposed “Tax Realignment Commission” (TRAC) may sound like a good idea on the surface, we have real concerns with the details. We urge the legislature to allow the commission to look at all taxes and fees and require that any final recommendations be revenue neutral (not surprisingly, we scored Senator Bryant’s revenue-neutral amendment in the recent Senate debate on TRAC). With the Director of Revenue serving as an ex-officio member, the Commission as currently written has an even number of members. We find this problematic and would urge the General Assembly to increase the number of gubernatorial appointees in order to provide more balance and prevent the potential of deadlocked votes.
Finally, if our lowest in the nation cigarette tax is increased, we urge that the legislature use the revenue to lower our state’s uncompetitive top marginal income tax rate. At an absolute minimum, we believe any plan should be revenue neutral rather than a net tax increase on South Carolina taxpayers.
Deal With Our Long-Term Obligations
Our unfunded liabilities pose serious threats to the future fiscal stability of South Carolina. That’s why Governor Mark Sanford’s proposal to use stimulus dollars to address our unfunded liabilities is fiscally sound and we encourage legislators to follow his lead in protecting South Carolinians from future tax increases.
Currently, the total is well over $20 billion (approximately $10 billion retirement system liability and $10 billion retiree health insurance liability) with interest costs growing every day. Together, these currently unfunded liabilities are over three times greater than the state’s annual general fund collections and are likely to be passed on to our children and grandchildren.
In 2008, State Treasurer Converse Chellis led an unwise effort to increase state retirement benefits with little regard for the deficits we currently face. Unfortunately, too many bought into his plan to “pay for” the cumulative $2.6 billion in new benefits by “assuming” 8% annual returns from the state’s investment portfolio.
The old adage about what assumptions make out of you and me seems especially true, as the stock market has dropped around 50% since then, making our already dramatic shortfalls considerably worse. We urge the legislature to begin dealing with these massive problems now through reigning in our overly generous retirement benefits in order to lessen the legacy of debt you leave for our children and grandchildren.
Foster Job Creation
Our state undoubtedly needs more in the way of tort and worker’s compensation reform as the U.S. Chamber of Commerce ranks South Carolina 43rd in the nation for the fairness of its litigation environment. Our awful legal climate drives away business investments and badly needed jobs. Any reforms passed this year should foster a lowering of the related high insurance rates that continue to negatively affect our economy.
At the core of any reform should be requiring American Medical Association standards for all claims before the worker’s compensation commission. We should follow the example of the majority of American states using these objective guidelines to protect businesses from the outrageous settlements that cause huge premium increases.
Increased and Improved Transparency
While few publicly disagree that government transparency leads to greater accountability and saves taxpayer dollars, our state continues to lag behind others in “opening up” government. We believe our state needs to, at a minimum, require online checkbooks for all levels of government, eliminate taxpayer-funded lobbyists, pass a law requiring roll call votes, and increase financial disclosure for candidates and elected officials. These common-sense reforms would go a long way towards restoring taxpayers’ trust in state government.
Enact Real, Free Market Reforms in Education.
There is a continued disconnect in our public education system that ranks very high in per pupil cost and very low in student outcomes. We believe it is time to addresses these failures with real reforms instead of throwing more money at the problem. We hope the legislature will pass legislation moving towards more market-based solutions, including allowing students to receive scholarships or tax credits if they transfer to a public, private, or parochial school.
We also believe the state portion of the average per student spending in the school district should follow the student. This per-pupil, “backpacked” funding is undoubtedly a path to success. It is also time to consolidate the mish-mash of education funding streams so that the state portion of funding can follow students to the classrooms rather than becoming siloed in bureaucratic programs.
Given our need to make all of our resources count, we also urge the General Assembly to close the National Board certification program to new teachers and enact stronger merit pay as well as look more closely at the monies that could be saved by consolidating small school districts’ administrations.
***
SC Club for Growth will closely follow legislation and amendments pertaining to these and related issues throughout the legislative session. We have a commitment to our members to track and report subcommittee, committee, and full chamber votes on the issues critical to moving our state forward. Votes on these issues will form the basis of our next legislative scorecard, which will be publicized to our members and other voters before future primary and general elections.