WHO SHOULD pick up the S.C. Education Association’s extra cost for its employees’ pensions next year? The S.C. Education Association, or the taxpayers? How about the State Employees’ Association? Or the Municipal Association? Or the other eight wholly private organizations that participate in the S.C. Retirement System?
Set aside your justified concerns about the fact that employees for what are essentially lobbying organizations are even allowed to be part of the State Retirement System, because that’s not going to change this year. Maybe not ever, although I keep hoping.
Instead, let’s talk about whether the lobbying groups deserve a taxpayer subsidy — which is part of the main dispute that is holding up passage of next year’s state budget.
Well, a small part of it. A part of it that probably isn’t getting the attention that it should. Which is why I’m writing about it.
The big hang-up in the budget conference committee is how to fulfill a promise to cities and counties that the state would cover half of their first-year costs for the bail-out of the state’s underfunded pension system. (The cost will go up each year through 2022, and there is — at this point — no commitment to help local governments beyond next year.)
The House budget sends that money directly to the pension system; that means each individual city and county would pay just half the increase. The Senate budget instead sends the $30 million to the state’s local government fund, which would distribute it based roughly on how much each city and county spends to provide state-mandated services.
Of course you see why cities and counties and their legislative advocates are fighting over which approach to use: Under the Senate plan, some cities and counties would receive enough state money to cover more than half their added pension costs for next year, and some would receive less.
Generally, counties get more under the Senate plan, cities more under the House plan. Columbia, for instance, would receive $440,000 under the Senate plan but $900,000 under the House plan.
But from a public policy perspective, there’s a much more important difference between the House and Senate plans. The Senate plan only provides funding for actual local governmental entities — and not even all of them; just cities and counties. The House plan provides money for every entity that participates in the State Retirement System — including recreation commissions and other special purpose districts, as well as water and sewer authorities and hospitals, all of which are technically governmental, even though the hospitals and in some cases water and sewer authorities compete with private businesses.
Yes, the House plan covers half the cost for those 11 lobbying organizations.
And yes, the House plan covers half of the cost for those 11 lobbying organizations: the Municipal Association, at $47,000; the Association of Counties, $40,000; the S.C. Association of School Boards, $25,000; the education association (which some critics like to describe as a teachers union), $8,700; the S.C. High School League, $7,500; the S.C. Association of School Administrators, $4,500; the Palmetto State Teachers Association, $4,000; the State Firefighers’ Association, $4,000; the S.C. Sheriffs’ Association, $2,000; the State Employees’ Association, $1,200; and the S.C. Law Enforcement Officers’ Association, $935.
It’s a tiny amount of money (relatively speaking), but it’s a hugely important principle: There is simply no way to justify spending tax dollars to subsidize a lobbying organization.
If you set aside the question of those entities that are not cities or counties — or even if you swallowed hard and agreed that the state should subsidize pensions for public hospitals that act like private hospitals ($10.3 million) and water and sewer systems and special purpose districts — there’s a legitimate argument for either approach.
Without that change, the Senate plan is the only legitimate option.
The House budget does what legislators promised: It cuts in half the extra cost that each city and county has to pay into the pension system next year.
But while it’s important for legislators to keep their promises to local governments, there’s an even bigger promise that the Legislature has failed to keep for years now: fully funding the local government fund. That fund is supposed to cover the costs for cities and counties to provide services the Legislature has ordered them to provide, but the current year’s budget comes $90 million short of the full $313 million required by state law.
The Legislature might have an even bigger obligation to add money to the local government fund than to cover part of the pension costs. And the $30 million that the Senate plan would add to the local government fund wouldn’t come close to meeting that obligation.
But of course you can’t set aside those lobbying organizations. Well, you can’t set them aside unless … you set them aside. That is, unless the Legislature amends the House plan to cover only government employees. (Or, better still, only city and county employees.) That would take a two-thirds vote in both the House and the Senate. And if lawmakers did that, there would be nothing wrong with adopting the House plan.
Without that change, though, the Senate plan is the only legitimate option.
Ms. Scoppe writes editorials and columns for The State. Reach her at firstname.lastname@example.org or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.