March 06, 2007

"Funny Money" in South Carolina Budget Proposal

"Put your money where your mouth is." As a guide to everyday life, this hoary old phrase means simply that if you believe in something, you should be willing to act on that belief. In politics, the implication is that if you think a state spending program is worth funding, you should figure out a way to pay for it. The editorial board at the State newspaper calls South Carolina lawmakers to task for not following this adage in their proposed budget:

Ask most House members about the budget they’ll debate this month, and chances are good they’ll rattle off a list of popular new programs the bill includes...What representatives probably won’t tell you is that they’re only committed to funding those programs and positions for one year.

Oh, they’ll probably pay for them next year too — if our economy keeps growing at a steady clip. But if things slow down, those programs and all the people who will have
been hired to carry them out — and many more — are toast. That’s because the Ways and Means Committee’s budget pays for them with nonrecurring, or one-time, funding. Unlike recurring money, which is what economists expect our current taxes to generate next year, this is money that has already been collected, but not spent; in other words, it’s money no one can realistically expect to be available in future years — money that should be used to buy school buses or pave roads or take care of other one-time purchases.

Using nonrecurring money to pay for recurring programs is one of the most irresponsible things our lawmakers do. And they do it year after year. That’s the main reason we had to lay off government workers and slash our Highway Patrol and our prison staffs and industrial recruitment efforts to the bone at the turn of the century: The economy tanked, and the irresponsible budgeting caught up with us.

The House's "funny money" approach is mirrored, of course, in Governor Mark Sanford's proposal to fund income tax cuts (which will cost more and more each year) with a cigarette tax hike (which will bring in less and less each year). So House budget writers are, at least, in good company. But South Carolinians should recognize that for all the good and productive areas of public investment the House budget has identified, it's all smoke and mirrors until the legislature--and the governor-- puts their money where their mouth is.


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