AFTER STARTING this fiscal year with $1 billion less to spend than the year before, and absorbing another $200 million in cuts in September, state agencies now face an additional $238 million — which means more lay-offs, furloughs and skimping on the supplies and support necessary to do jobs that the economic tailspin is making more demanding by the day.
Those agencies that can blunt the cuts by tapping federal stimulus funds face a double-whammy next year, when that money won't be available as planned.
The most certain and obvious hit is to state employees, working, tax-paying S.C. citizens who will either lose their jobs or take pay cuts or have to take on more work as a result of cumulative cuts that exceed 25 percent in many agencies. Even worse is what it means to our economy when more people are pushed into the unemployment line, and what it means to our state when we have to lay off teachers and leave prisons understaffed and trim the safety net for the growing number of South Carolinians in poverty and scale back the rehab programs that have been showing amazing results cutting into gang violence and other youth crime.
There was no way around the latest round of budget cuts. Yes, the Budget and Control Board could have made a slightly smaller cut. But given our economic outlook, doing so almost certainly would have meant another cut in the very near future.
Worse, there's really no immediate way out of this mess. Lawmakers could raise taxes, but we have strong reservations about the wisdom of doing that in a recession - or even in an officially post-recession period that is still acting like a recession. Besides, with our unemployment rate so high and wages dropping, and spending down because of both of those problems as well as tighter credit and less willingness to use it, it's hard to see how a tax hike could bring in much money. Even the one tax that we desperately need to raise - our nation's-lowest cigarette tax - wouldn't generate enough money to make up for this latest round of cuts, much less the ones that came before it.
If the Legislature acted quickly in January to replace the across-the-board cuts with targeted cuts (which it should but won't), the total reduction would be the same, so while our government might work better, we'd have just as many people with pay cuts or no jobs.
All of which means that in the short term we have no choice but to suffer through this mess.
Unfortunately, our Legislature still seems to think that's the long-term solution. It's not. The long-term solution is to understand how we got to this point and do everything we can to keep from getting here again.
There's nothing lawmakers can do to prevent a recession. But they can see to it that we're in a stronger position when we go into a recession - and thus that the bottom isn't quite so low - by adopting smarter tax policies and smarter spending policies.
That's never easy, because there are legitimate differences of opinion about what constitutes smart tax and spending policies, and the State House is full of special interests working to stymie what's best for the state if it's not best for them. And we lack critical tools: We don't have an effective governor who can rally public support and maneuver a plan through the Legislature, and we don't have legislators with an appetite to do much except try to survive the current crisis.
What too many people haven't come to terms with is the fact that until we create a tax code that can weather the economic cycle and until we make fundamental changes in our definition of what state government is and should do and in how it does it, things are only going to get worse. And there's only so much "worse" we can stand. Somehow, some way, our elected officials have to put aside their petty and even profound differences, focus on the severe needs of our state, reach deep down within themselves and become the focused leaders we need them to be. Then they need to start acting like leaders, by making the smart but difficult decisions it takes to fix the problems they have created.