SENATE Finance Chairman Hugh Leatherman says he’s determined to get a state budget passed by the start of the fiscal year on July 1.
“Friday, Saturday, Sunday, Monday, whatever it takes, my intent is to get us a budget, get it back to conference committee, work out the differences, and we can work out the differences; there’s no question in my mind we’ll work out the differences,” he told his committee during an emergency meeting Wednesday to pass the resolution that will keep government operating if that doesn’t happen.
Of course, it was also Sen. Leatherman who advised senators last month to bring their pajamas to work the following week, because he intended to keep the Senate in session until it broke a filibuster that was holding up work on the budget.
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On pajama Tuesday, the Senate convened at its normal noon and adjourned at 5 p.m. — on his motion. It quit at 5:59 the next day, and 3:31 the day after that.
Even if Mr. Leatherman follows through on the nose-to-the-grindstone talk this time and somehow manages to make quick work of getting two more budget-related bills through the Senate this week, or weekend, and even if House and Senate negotiators are able to reach a compromise on the spending plans in short order, and even if the House and Senate come back to town again and sign off on that compromise quickly, the governor still has five days to veto individual items in the budget.
Only then does the budget take effect.
What that means is that it is not conceivable that state government will be operating under a new budget come July 1.
That means the governor will lose any semblance of control over the Transportation Department, the replacement agency for the Budget and Control Board will be at least technically unfunded, and cities, counties and schools will start their new fiscal years with no certainty about the state funding they included in the budgets under which they will then be operating.
The fact that our Legislature has allowed this to happen is nothing short of dereliction of duty.
But we’ve sort of gotten used to that, haven’t we? A road funding plan? Undone. Ethics reform? Undone. A response to the Supreme Court’s order to provide a decent education to all children? Undone.
What sets the budget apart from those other supposed priorities is that it must be passed, and it will be passed. Eventually.
So with the Senate set to pass that continuing resolution on Tuesday to keep the government open until the new budget is passed, this is a good time to think anew about what the 2015-16 budget ought to include.
Well, that makes the task sound larger than it is. More than $6 billion of the $7 billion budget was set a year ago; the Legislature starts every year by copying and pasting. Even a lot of the $800 million in “new” revenue is spent before lawmakers start work, to meet statutory obligations, and much of it is the same in the House and Senate budgets, so it’s completely locked in.
What is not locked in is the $150 million in surplus funds and an additional $150 million that state officials just certified that they expect in regular, recurring revenue for next year.
Stick to priorities
The House and Senate still have a chance to change their priorities for that money. And they should. Here’s how:
▪ Pay for the Volvo incentives. We don’t usually pay cash for giant economic-incentive packages such as the one Gov. Nikki Haley promised Volvo for building its first U.S. manufacturing facility in the Lowcountry. But the governor threw normal out the window when she promised to take out a subprime loan to pay for $123 million in infrastructure improvements. The Legislature could save us $86 million in interest payments by appropriating all the money so we never take out the loan, which starts with seven years of interest-only payments and ends in a balloon payment. Alternately, it could provide just enough cash so we can avoid the balloon-payment plan and do a regular low-interest loan. The House Ways and Means Committee proposes to spend $70 million on Volvo incentives.
▪ Use the newly certified recurring money to make a down-payment on our many unpaid policy debts. (Recurring money is what the state collects year in and year out, to pay for the operation of government; it increases every year, as a result of inflation and population growth.)
There are countless such debts, but the most important are giving cities and counties the additional $60 million that state law promises them to provide services that state law requires them to provide, and giving schools some of the additional $500 million that state law promises them to pay for teachers and other expenses that increase as the number of students grows.
▪ Don’t spend more money than we can afford on roads.
Speculation is that the governor’s supporters will fight to leave the Volvo bond package alone and spend that money on roads — apparently, and this is crazy squared, because they think that would allow her to save face. And light a bonfire to rival the Tiger Burn with that $86 million in interest payments. Anyone who would support that plan deserves to have his picture added to the dictionary next to “profligate.”
The other danger comes via Senate Republican Leader Harvey Peeler, who is demanding that the whole $300 million in unexpected revenue go to roads. That’s a bad idea because it includes the recurring money that needs to be used to pay down those policy debts.
▪ Use the rest of the one-time money for road repairs. This won’t solve our road problems; if we’re going to get our roads up to working order, we’ll almost certainly need a permanent and predictable revenue stream — along with reforms to our road-funding system. But most people consider roads a top priority, and the best way to avoid creating huge financial headaches down the road is to use one-time money to buy things such as roads, which you don’t have to buy again next year.
Even if legislators did all of this, we still wouldn’t be meeting our state’s most important needs: The schools would still be underfunded, as would colleges and universities, to name but two priorities. But it’s a much better plan than the alternatives.
Ms. Scoppe can be reached at email@example.com or at (803) 771-8571. Follow her on Twitter @CindiScoppe.
Who’s to blame when July 1 comes around and a new state budget isn’t in place? Pretty much everyone.
The Senate got stuck in an extended debate over abortion when it should have been dealing with the budget, and then allowed Sen. Tom Davis to hold the floor for three weeks, preventing a vote on a secondary budget bill. That needs to pass before House and Senate negotiators will agree to a spending package.
It’s tempting to blame Mr. Davis for the whole mess, and he deserves a lot of blame, but the Senate allowed this to happen. A majority can shut down a filibuster; the one time Senate Judiciary Chairman Larry Martin tried to end the filibuster, only six senators voted with him; 35 voted to let it continue. Mr. Martin said that with every faction in the Senate having its own reason to support a stall, he never saw any point in trying again.
In the House, Speaker Jay Lucas’ effort to budget responsibly and allow all representatives to participate in the budget process contributed equally. Normally, the House and Senate include contingency plans in their bills for spending additional revenue that’s certified late in the process.
Not only did the House not do that (“We don’t do wish lists”), but leaders decided to spend that money through a separate bill, rather than letting budget negotiators make that decision. The problem was that they waited to see how much money was available, and once that happened, it was too late to get the bill passed before the June 4 adjournment. That bill, too, has to pass before budget negotiators will work on an agreement.
Cindi Ross Scoppe