Roller Coaster
With South Carolina economic forecasters expected to slash revenue estimates again when they meet later this week (in all likelihood triggering an emergency session of the S.C. General Assembly) we figured now was as good a time as any to bring everybody up to speed on how we got where we are.
It’s not pretty, people.
And when we say “how we got where we are,” we’re not talking about the last few months - i.e. the politically-motivated fear-mongering of recent across-the-board budget cuts, the liquidation of the state’s capital reserve fund or the $92 million raided from the general reserve fund - we’re talking about the roller coaster ride that the taxpayers of this state have been subjected to over the last decade.
Let’s recap, shall we?
In fiscal year 1997-98, South Carolina’s general fund budget was $4.2 billion. Sure we had the nation’s worst SAT scores and lowest graduation rate, along with below-average income growth and above-average unemployment, but the national economy was humming and revenues were pouring into Columbia.
And so over the next three years, lawmakers grew government by 35% - a total of $1.36 billion.
Then came three consecutive years of negative revenue growth, which resulted in the liquidation of our trust and reserve funds, an unconstitutional $177 million deficit and $611 million in spending cuts.
The worst year by far was fiscal year 2003-04, which saw the state budget drop down to $5 billion from $5.6 billion two years earlier.
Had growth been limited during the boom years, however, South Carolina would have had more than enough to cover the shortfall - and give taxpayers at least a half billion dollars back.
There would have been no cuts to education, law enforcement, roads or prisons, and South Carolina’s revenue growth wouldn’t have been hit nearly as hard because we would have been investing in our economy, not more government.
But lawmakers didn’t show restraint, or move to limit growth, nor did they learn the lesson of the “painful” cuts from 2002-04.
This became readily apparent beginning in fiscal year 2004-05, which saw the onset of a four-year, $2.1 billion explosion in government growth - all of it flowing from the pens of “Republican” budget writers.
The first year of the explosion saw spending increase by $323 million, then by $411 million, then by $689 million and finally by $709 million - a 41% increase over a four-year period.
The general fund soared to $7.1 billion - a 70% increase for the decade, which is twice as fast as South Carolina’s growth in population and inflation over the same time period.
Boom, bust, boom … and now bust again, as lawmakers are staring down the face of declining revenue growth that comes in large part because they took huge surpluses and failed to invest them wisely.
And predictably, the government agencies like the Department of Education that got all that money are now the first to complain about the impact of budget “cuts” - as if losing $73 million after getting a cool billion in new money the previous four years can be described as a cut.
Oh, and did we mention that in spite of that massive increase in government, we still have the nation’s worst SAT scores and lowest graduation rate, and we still have below-average income growth and above-average unemployment.
“Somebody get us off this train …”
Comments
By Joseph Reynolds on October 6th, 2008 at 2:02 pm
Honest question here…
what exactly would happen if they just eliminated the dept. of Education in Columbia, and let school districts do whatever they wanted to?
Leave just enough of a staff to allocate the money approved for those districts by teh general Assembly…and send everybody else packing…
Im not looking for the answer …”nothing”..but hope that someone with a better understanding of what exactly they do can help me here