Why Is Bonding Authority a Big Deal?
…BECAUSE IT’S ABOUT YOUR MONEY AND WHO’S ACCOUNTABLE FOR SPENDING IT
If the General Assembly is going to restructure government, it’s worth remembering the point of restructuring – separation of powers and increased accountability. This year’s Department of Administration bill (S.22) fails to achieve that goal in a variety of areas, most flagrantly procurement and bonding authority.
With respect to the authority to issue bonds, lawmakers can currently avoid responsibility for issuing debt by letting the Budget and Control Board do it. But the legislature – and only the legislature – is responsible for appropriating taxpayer resources, and when they do so foolishly, they should be held accountable.
S.22, as passed by the Senate, simply moves the authority to issue bond debt from the Budget & Control Board (which is, in name at least, eliminated in the bill) to a new hybrid board (comprised of the exact same members as the Budget and Control Board) without the legislature taking on any additional responsibility for this incredibly important function.
Bonds are big business in South Carolina. And, although the Budget and Control Board has the authority to issue bonds, the state legislature has the responsibility to appropriate the revenue for them. From FY 2005 to FY 2014, the legislature has appropriated more than $2.1 billion for Debt Service on these bonds. That averages out to more than $210.6 million a year. Or, put another way, if this revenue were put back into the economy, it would support 4,212 jobs with a $50,000 salary.
To point to just one example of a project that received taxpayer-financed bonds from the Budget and Control Board, The Nerve reported in 2011 that Boeing received $270 million in bonds back in 2010. With interest, these bonds will cost taxpayers at least $360 million over the next 15 years.
These are gigantic numbers, and the legislature alone – not some unaccountable board few South Carolinians have ever heard of – should be responsible for them.