How are local governments spending state money? Some SC lawmakers want to find out

Several S.C. lawmakers expressed concern Monday that some counties and cities may be using state aid to pay off expensive projects rather than on public safety.

In a 20-year span, expenses in the state’s 46 counties have grown 6.6 percent a year, said Frank Rainwater, head of the state’s Revenue and Fiscal Affairs Office. Of that spending, debt service — money spent to pay off bonds and loans — and interest on debt has grown fastest — at 13.1 percent, he added.

Meanwhile, county spending on public safety has gone down, Rainwater said.

That was concerning to state Rep. Kirkman Finlay, R-Richland, who said it seems some local governments may be “making trade-offs between projects and police.”

“If you asked the citizens what do they want, generally, what I hear is better public safety, better trash pickup and just some potholes fixed,” he said. “What we are doing is beggering our children. We’re giving them less police and more debt in the future.”

Local governments depend on state aid, known as the local government fund. A 1991 law says 4.5 percent of the state’s general fund budget must go back to counties and cities. That money is used to pay for services and state mandates without forcing higher local taxes and fees on residents, local governments say.

But the Republican-controlled Legislature only has given about 3 percent of the general fund back to local governments since the Great Recession.

For example, under the 1991 law, Richland County should have received about $22.5 million in state aid in fiscal year 2017-18. Instead, the state sent $15.2 million.

In Lexington County, state aid should have been about $15.3 million but instead fell short almost $5 million.

In smaller counties, including Union County, state aid has kept county budgets afloat as the population has stagnated or dwindled. “In Union County, we had to put a fee on our citizens for every household .... to fund EMS,” said state Rep. Mike Anthony, D-Union. “That’s how serious it is.”

But a growing portion of county budgets is going to pay off debt or interest on debt.

Richland County spent almost $83 million to pay off debt or interest on debt in 2016 — a 9.8 percent increase over the previous year. Lexington County spent $4.9 million paying off debt or interest on debt — less than the year before but a growing part of the county’s expenses over the past six years.

“We’re bonding more projects that are going to take money away from police and basic services,” Finlay said. “How does that work long-term?”

This story was originally published November 27, 2017 at 5:42 PM with the headline "How are local governments spending state money? Some SC lawmakers want to find out."