Uncategorized

State Finances: A Sea Of Red Ink

THE COST OF GOVERNMENT GROWTH IS BIGGER THAN IT LOOKS || By FITSNEWS || There’s a great article in The Wall Street Journal this week highlighting the work of former Federal Reserve chairman Paul A. Volcker. Volcker has created a new alliance bearing his name – an organization aimed at restoring sound…

THE COST OF GOVERNMENT GROWTH IS BIGGER THAN IT LOOKS

|| By FITSNEWS || There’s a great article in The Wall Street Journal this week highlighting the work of former Federal Reserve chairman Paul A. Volcker.

Volcker has created a new alliance bearing his name – an organization aimed at restoring sound fiscal decision-making at the state level.  We were turned on to this group by S.C. Treasurer Curtis Loftis, who has been worked hard at the state level to bring long-overdue transparency and accountability to spending decisions.

Anyway, Volcker’s group has issued a troubling new report …

“Even as the revenue of state governments in the United States recovers from the longest economic downturn since the 1930s, many states continue to balance their budgets using accounting and other practices that obscure rather than clarify spending choices,” the report found.  “These practices make budget trade-offs indecipherable, lead to poorly informed policymaking, pass current government costs onto future generations, and limit future spending options.”

Sound familiar?  It should …

“It’s like termites eating at a structure,” Volcker told the WSJ. “The building hasn’t fallen down yet. But if you get enough termites, the building’s going to get pretty rickety.”

Volcker’s alliance grew out of his work on a 2012-13 task force – which uncovered not only serious state-level fiscal problems, but other issues as well.

“The palpable erosion of trust in our democratic institutions of government demands a response,” he said, referring to his organiztion.

FITS has been doing some digging on South Carolina’s debt situation during our founding editor’s vacation to the Palmetto State’s coast.  We’ll be sure to let you know what we uncover soon.

In the meantime, Volcker deserves credit for highlighting this important issue …

***

Related posts

Murdaughs

Buster Murdaugh Files Defamation Lawsuit

Callie Lyons
Uncategorized

Murdaugh Retrial Hearing: Interview With Bill Young

Will Folks
State House

Conservative South Carolina Lawmakers Lead Fight Against CRT

Mark Powell

23 comments

festus June 10, 2015 at 7:31 am

Red ink? Fortunately, unlike the federal government, the South Carolina is constitutionally mandated to maintain a balanced budget.

Reply
TroubleBaby June 10, 2015 at 8:34 am

I always wondered how SC could owe the Feds for the unemployment fund deficit and meet the constitutional mandate of a “balanced budget”.

You also have to wonder what accounting games might be played in other areas that are suspect, like the state worker retirement fund.

Reply
sparklecity June 10, 2015 at 12:23 pm

But like Volker so correctly pointed out it is by accounting tricks only.
Shell game is all it is……………..

Reply
RogueElephant June 10, 2015 at 8:22 am

This is why I have advocated business people running govt. instead of politicians, bureaucrats or lawyers. You add up the gross receipts, (taxes, fees etc.) then you subtract expenses (cost of running govt.) you stop spending before the revenue is depleted . IT AIN’T THAT HARD FOLKS. Politicians buying votes with money we don’t have is most of what causes these problems..

Reply
Business World June 10, 2015 at 9:55 am

Most businessmen that run for office end up being failed businessmen.

Reply
Crooner June 10, 2015 at 11:09 am

Like Lee Bright?

Reply
sparklecity June 10, 2015 at 12:21 pm

Absolutely!!!!!!!

Reply
Crooner June 10, 2015 at 11:10 am

Or Nikki “I know the value of a dollar” Haley? Who never made any money until she had influence to sell?

Reply
sparklecity June 10, 2015 at 12:20 pm

You got that right!!!!!

Reply
sparklecity June 10, 2015 at 12:19 pm

Just about every “businessman” who became a politician is like” Senator” Lee Bright – couldn’t succeed in his own business so he turned to his “part-time” position as a senator so he could make the REAL big bucks plus a retirement to boot.
Or….while they are a “part time” represenative they feather their own nest (i.e. business) by utilizing their connections or networking and come out with a fatter wallet than when they first entered the state house doors.

Reply
RogueElephant June 10, 2015 at 1:51 pm

Since you don’t like business people , I assume you are happy with the politicians, bureaucrats and lawyers.

Reply
sparklecity June 10, 2015 at 3:00 pm

I have absolutely no problem whatsoever with “business people”(I have a technical degree with a minor in business management).
Only thing I have a problem is with the same tired old saying that business people should be running government.
For the most part, business people who become politicians turn out like every other politician – aloof, phoney and ineffective after the second term..

Reply
FastEddy23 June 11, 2015 at 12:40 am

That’s easy. Stop hiring business failures. There are thousands of retiring successful business men and women who at least can read a balance sheet.

Guy I know retired from his truck tire business, offered to help his municipality straighten out the budget. Suggested cutting positions. … It worked just fine.

Reply
sparklecity June 10, 2015 at 12:26 pm

Tell you what there “elephant shit shoveler”:
When some ‘businessman/woman” runs for election and pledges to eliminate the current state income tax system and replace it with a combination sales & flat tax I’ll give you some credit other than that all you are doing is woofing.

Reply
FastEddy23 June 11, 2015 at 12:37 am

Now that’s a reasonable plan. The Governor could resolve that one with the flick of a pen.

Reply
nitrat June 10, 2015 at 8:47 am

The single factor that is responsible for so much obfuscation in Red state budgeting is the no-new-taxes pledge of allegiance to Grover Norquist.
When a legislator is smart enough to realize that there are lots of things that government has to do to keep people safe and provide an environment in which businesses and their workers can thrive and, at the same time, they can’t be open and honest enough to call a tax a tax when that is what needed and they have no confidence that they can educate voters who have been deafened by dog whistles, this is the mess we end up with.

Reply
Caveman Mentality June 10, 2015 at 10:02 am

Cagdar say tax bad. Me no like tax. Cagdar make tax go away. No tax mean no problem. No problem mean Cagdar happy. No worry about budget. Budget dumb. Cagdar no like math. Math bad.

Reply
sparklecity June 10, 2015 at 3:10 pm

Well put……………..
In addition to what you posted, politicians have no balls whatsoever to overhaul the tax system either……………
The South Carolina legislature is an embarrassment to be sure……

Reply
Crooner June 10, 2015 at 11:09 am

Huh?? I thought there was a $400M surplus that some were touting as a roads fix.

Reply
FastEddy23 June 11, 2015 at 12:35 am

Wow! And whose fault is that? Could it be that The number of state and county and city employees has doubled in the last decade? … Except in the DOT employees who lean on shovels and fix the roads.

Reply
Che June 11, 2015 at 12:40 am

SC’s politicians use the state budget like an ‘all-you-can-eat’-buffet- business people or lawyers – it’s the same. Nothing good will happen here for decades. Low paying manufacturing jobs, declining higher education sector and no high tech industry will erode tax base and infrastructure – a good place to fish and golf and pay little taxes….

Reply
OPM June 11, 2015 at 7:49 am

The state has borrowed 18 billion dollars from the retirement system. Its called the unfunded liability. The state’s largest debt and 1% of the people know about it or understand it.

Reply
TroubleBaby June 11, 2015 at 8:33 am

It would seem on the surface a violation of SC’s constitution, no?

Reply

Leave a Comment