We rarely have occasion to praise South Carolina’s legislative leaders – or the state’s stumbling, bumbling, fumbling governor, Henry McMaster. This week, however, both the governor and leaders of the S.C. House of Representatives deserve credit for showing some rare restraint with regard to state spending.
Specifically, McMaster and House leaders rejected a spending plan advanced by fiscally liberals in the S.C. Senate that would have dramatically escalated taxpayers’ investment in government at a time when the economy is navigating a period of peak uncertainty.
Instead, they are taking a wait-and-see approach to the state’s revenue situation – which faces an unknown future due to the fallout from the coronavirus pandemic and subsequent societal shutdowns.
We supported the House and the governor in their decision … which will keep current spending locked in at (inflated) levels from the previous fiscal year, which ended on June 30, 2020.
Now it is up to McMaster and leaders in the “Republican” legislature to take additional steps to safeguard taxpayers …
What sort of steps are we talking about?
Well, this news outlet has long opined that you can learn everything you need to know about a politician/ candidate/ committee by how he/ she/ they answer the following three questions …
1. How much are you going to spend?
2. Where are you going to get it from?
3. What are you going to spend it on?
Unfortunately, answers to these simple, straightforward questions are incredibly hard to come by in the Palmetto State … where there is no online spending database, where politicians hide money in secret accounts (which they benefit from) and where the mainstream media still refuses to report on the actual size of the state budget.
Following the money is impossible … which is the whole point.
The less people are able to see what politicians are doing with taxpayer money, the more bad, self-serving behavior they can get away with.
Accordingly, it is important to look at how the Palmetto State’s fiscal affairs are conducted … to the extent we can sort through the maze of misinformation and secrecy and get at something resembling the truth.
As South Carolina takes a rare break from air-gunning every penny that flows into its coffers (a wise decision in light of everything that is going on in the world right now) its leaders must reform the spending process itself.
Some ideas …
(Click to view)
Start the new budget on January 1, 2021
This business of starting budgets in the middle of the calendar year is needlessly confusing. Lawmakers have a chance in the aftermath of the pandemic to pass a spending plan that would commence on January 1, 2021 and run through December 31, 2021 – resetting state budgets to operate on an annual basis moving forward.
Adopt zero-based budgeting
We have noted throughout the coronavirus crisis that government at all levels ought to undertake a long-overdue reprioritization of what taxpayers should – and shouldn’t – be funding (i.e. figuring out what core functions of government ought to look like). In South Carolina, this is clearly not happening. State lawmakers continue to “fund the structure, not the need” – meaning they are just pumping more money into the same failed bureaucracies without questioning whether these bureaucracies should be consolidated or eliminated. Adopting a zero-based budget approach – one that identifies priorities and funds them accordingly – would reset this flawed, self-perpetuating process and get government refocused on the handful of things it ought to be doing.
Create an online, searchable database for state spending
For years we have been calling for an “online checkbook” for state government – one in which individual expenses were searchable by citizens according to “agency, authorizing employee, amount, category, date, employee name, purpose, type of payment (cash, credit card, check, wire, etc.) and vendor.” All of these categories should be included in “searchable, up-to-the-minute records,” too. Public money demands public scrutiny – and a searchable database of all government expenditures is the only way to accomplish this.
No more pass-throughs/ nonprofit transparency
One of lawmakers’ favorite tricks for concealing the true purpose of expenses is to earmark appropriations to a particular state agency and then instruct the agency to cut a check to the intended recipient. This “pass-through” method bypasses any debate over the appropriation on the front end – and eliminates any transparency after the fact. In addition to shutting down this backdoor appropriations process, we would impose a requirement that any nonprofit which receives state funding be subjected to the same enhanced level of scrutiny as state agencies regarding its donors and disbursements. If we are going to farm out government functions to nonprofits, then the same level of transparency must apply.
Tell the truth about the size of the budget
This recommendation is mostly targeted to the mainstream media establishment in South Carolina. To their credit, lawmakers post all of the funding sources for the budget online. Unfortunately, the press only counts “general fund” revenues – or monies raised by state taxes – in its coverage. General fund revenues barely account for one out of every three dollars spent by the state. The media fail to tally federal funds doled out to state lawmakers as well as “other funds” (i.e. monies collected from South Carolinians via fees, fines and other levies). It is past time the mainstream media started leveling with the public on the true size of the state budget. After all, we are never going to be able to have a real debate on state spending without first knowing how much we are spending.
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