STATE LAW requires the Legislature to allocate about $550 million every year to reduce homeowners’ property taxes and shield businesses from a couple of state taxes. And legislators do that, every year, without debate. In fact, it happens almost magically: The money is removed from the calculations that show them how much they have to spend.
Another state law requires the Legislature to pay for as many LIFE and Palmetto Fellows scholarships as there are students who meet the qualifications. And even though the cost has skyrocketed, outstripping the lottery proceeds that we were promised would pay for it, legislators do that, every year, without much debate.
Obeying those laws always put a strain on budget-writers, but since the Great Recession dried up state tax revenue, it has become all the more apparent that meeting these obligations first means even less revenue — and even cuts — for the rest of the government.
Yet these aren’t the only laws that mandate a certain level of spending. Two particularly important laws — which have been on the books for far longer — require the Legislature to send 4.5 percent of general fund revenue to cities and counties and to follow a formula to fund what’s referred to as the base student cost.
The local government funding law was passed to make sure the state pays for the services that it requires cities and counties to provide. The school-funding law primarily pays for teachers’ salaries — that is, it’s the “classroom funding” that Republicans rightly insist should be our first priority for education spending.
But unlike the tax-relief and the scholarship laws, the Legislature has not obeyed these laws since the start of the recession. Instead, it has suspended them, every year, and given schools and local governments part of what’s left after it obeys those laws that it deems more important.
To paraphrase George Orwell, all laws are equal, but some are more equal than others.
This year, the Legislature will have more than $500 million in new recurring revenue to add to the current $6 billion state budget. There would be $7 billion to spend instead of just $6.5 billion if lawmakers considered the $550 million for property tax relief as open to debate as paying for teachers and local government services. But they don’t.
Likewise, if the pattern holds, lawmakers will spend an extra $15 million on LIFE, HOPE and Palmetto Fellows scholarships — over and above the $215 million the state is spending this year. Because like the property-tax break, they consider the scholarships sacrosanct.
Meantime, the House Ways and Means Committee on Tuesday set in motion the procedure by which it will suspend the local-government funding law. Once again. The local government fund was $280 million in 2008, and $183 million in this year’s budget. The fund should have dropped some as state revenue dried up, but not nearly that much. In order to fund it as the law requires, the Legislature would have to spend $71 million of that $500 million in new revenue. Which it has no intention of doing.
The committee did add a provision to the budget that excuses cities and counties from providing some state services, in return for shorting them the money. I suppose that makes some sense, although in many cases we’re talking about services that cities and counties need to provide.
A much better idea would be to suspend the law that prohibits cities and counties from raising taxes enough to pay for all the services that their constituents might want them to provide. Better yet, the law ought to be repealed. Local voters have demonstrated time and time again that they’re perfectly capable of ousting local officials who tax them too much — far more able than they are of ousting legislators who shortchange them on services that they demand.
No one seems to think that funding the base student cost as required by law is even an option. School supporters would simply like to increase it a little bit — though first they have to fight off Gov. Nikki Haley’s proposal to slash it even more. The formula in the law that the Legislature keeps suspending says that, because of inflation, the state is supposed to provide $2,790 next year per student. That would require lawmakers to spend an additional $665 million on schools, which would force them to cut other programs, since there isn’t that much new money available. The state is spending just $1,880 per student in the current year’s budget, which is what we were spending in 1998. The governor wants to cut that to $1,776, which is $16 per student more than the 1996 level.
And yes, the formula is flawed, and we have way too many pots of education funding and way too many strings on how they can be spent, and it’s terribly misleading to talk about per-pupil funding as though the Base Student Cost contained all the money the state spends on schools. But none of that changes the fact that the spending is down and the governor wants to push it down even more. And she proposes to do this while saying with a straight face that she’s increasing spending on schools.
What she actually proposed — as The Associated Press explained quite nicely earlier this week — was to increase recurring funding, by about $4 million. But since the Legislature used more than $80 million in one-time money last year to patch together the school budget, that represents a total decrease in state school funding of $80 million. Shorting the schools even more goes a long way toward helping free up money to pay for the $140 million income tax cut she’s pushing.
In the beginning, it didn’t seem so awful to temporarily suspend the mandatory-funding laws, because the situation was just so dire. It even made a little bit of sense to treat the property tax and scholarship laws one way and the public education and local government laws a different way — the thinking being that the first two affected individuals, who wouldn’t be able to handle less in state handouts or tax breaks than they had counted on, whereas government could somehow make things work. Yes, I know it’s an imperfect argument, but at least it’s an argument.
But now it has become a habit. Even as the situation has become much less dire, even manageable if one wants to manage it responsibly. Even as the governor says we’ve got plenty of money to be handing out still more tax breaks. On top of the $2.3 billion in annual tax cuts the Legislature has approved since 1995.
And each year that the Legislature keeps suspending the laws makes it easier to do it again the next year. And the next.
This has gone on long enough. If the Legislature isn’t going to obey these laws, it needs to repeal them. If it can’t or won’t do that, it needs to obey them. Or at least try to.
Ms. Scoppe can be reached at cscoppe@thestate.com or at (803) 771-8571.
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