As a general rule, we permit our politicians to stretch the truth here and there. If they want to take a little undeserved credit, most of us won’t begrudge them the pleasure. But an op-ed published on this page (T&D, Oct. 14) by three leaders of the S.C. House – Reps. Bruce Bannister, Bobby Harrell and Brian White – stretches the truth so far and in so many ways that it can’t be allowed to pass without comment.
The authors claim, for example, that “over the past four years, South Carolina has had an average annual surplus of more than $157 million – allowing our state to sustain core services while maintaining $28.7 billion in Republican-passed tax cuts.”
This is flatly untrue. At least $15.9 billion of that “$28.7 billion in Republican-passed tax cuts” consists of tax breaks to special interests – mostly tax favors to companies and industries with good lobbyists, not tax relief for everyone. As for the remaining $12.8 billion, it’s more than offset by the fact that the state’s income tax rates haven’t been indexed for inflation in more than a half century – meaning that the vast majority of working South Carolinians, even those who only make $14,000 a year, pay at the highest tax bracket of 7 percent. In other words: Since the tax brackets have stayed the same while inflation has gotten higher, your taxes have steadily risen, not fallen.
Bannister, Harrell and White allege that the General Assembly “made the difficult spending decisions Washington would not.” And what difficult decisions were those? “We reduced spending midyear by nearly $1 billion in 2009 and $439 million more in 2010.”
If only they had. When revenue dried up because of the Great Recession, the Legislature refused to make targeted cuts to the state budget, as then-Gov. Mark Sanford urged them to do, and instead let the Budget and Control Board make irrational across-the-board cuts – meaning that core services like infrastructure and law enforcement were cut at the same rate as lawmakers’ pet projects. Throughout the recession, the budget only actually decreased once – in 2010 – and that was by a microscopic 0.8 percent and only happened because lawmakers hadn’t budgeted for shortfalls.
The authors have made a virtue of necessity – rather like man claiming he’s made prudent cuts to his personal budget when in fact the bank repossessed his car.
The authors go on to boast about the state’s reserve funds. “A responsible budget holds funds in reserve for a ‘rainy day,’” they write, and “South Carolina funds not one, but two rainy day accounts.” The existence of these “rainy day funds” is supposed to illustrate the General Assembly’s fiscal conservatism as over against the fiscal irresponsibility of Washington.
It’s true that South Carolina maintains two rainy-day funds, but it’s also true that lawmakers squander them every year. Sure, the funds exist. But there’s not much point in having a “reserve” account if you’re going to deplete it at the first opportunity – which is exactly what happens on an annual basis. The Capital Reserve Fund, for example, is supposed to finance previously authorized capital improvement projects and to retire interest or principal on previous bonds. What it actually ends up funding, however, are scores of things that have nothing to do with capital improvements. This year’s fund came to around $117 million, but the General Assembly spent virtually the whole amount on a variety of non-capital, non-essential government programs – this in a year when there was no emergency or “rainy day.”
Perhaps the most egregious claim in the op-ed, however, is this: “Washington prefers ‘deficit spending’ – spending money it doesn’t have on things our nation doesn’t need – while South Carolina’s Constitution mandates a balanced budget.” Since almost every other state also has a balanced budget requirement for the excellent reason that states can’t print their own money, this is hardly a triumph of fiscal prudence.
But South Carolina’s Legislature manages to get around the requirement anyhow. The state’s retirement system has an unfunded liability (what we owe vs. what we’re projected to have) of more than $17 billion, and the state has a combined bond debt of over $11 billion. The authors claim that their fiscal judiciousness allows them to “prioritize” infrastructure, but the latest state budget increases infrastructure spending chiefly by issuing more bond debt – money that will have to be paid back with interest. Spend now and let future generations pay for it. Sound familiar?
Bannister, Harrell, and White would like you to think Washington’s fiscal recklessness contrasts with Columbia’s conservatism and restraint. Don’t believe a word of it.
Barton Swaim is communications director of the Columbia-based South Carolina Policy Council.