Restructure This?



Last week, we attended a meeting of the Budget & Control Board. Now, oftentimes these meetings are excruciatingly uneventful, and even when they involve major issues, they seem uneventful. But in this case, what we beheld was – almost – mindblowing.

The 5-member Board has the power to approve bond packages. Innovista, you remember, is the promised USC “research campus” that was supposed to “attract” millions in investment and “knowledge economy” jobs. The university constructed two of the project’s three buildings, the investment never came, and so far South Carolina taxpayers have wasted well over $100 million on two impressive-looking but largely empty buildings.

The Nerve has covered the progress of this $100 million debacle for more than two years now. In early May, Kevin Dietrich reported that the legislative Joint Bond Review Committee had carried over a measure to provide the “research campus” with another $13.3 million in general obligation bonds.

It was bad enough that the Committee would even consider issuing yet more debt to support this notorious financial disaster. Since that report by The Nerve, however, the Committee passed the bond package, sent it to the Budget & Control Board – the B&CB has final authority in bonds – and last week the Board approved it.

This much, however, has already been reported by The State. USC’s retired CFO is quoted in The State’s story as defending Innovista to Gov. Nikki Haley (who has been highly skeptical of the project): “Innovista,” he remarked, “has not been as big a disaster as some have led us to believe . . . Has there been setbacks, have there been changes in courses? Sure, there have.”

There’s one aspect of the story that hasn’t been reported, and that is this: The recently killed Department of Administration bill (H.3066) – a bill hailed by the governor and many others as a major restructuring and reform bill – would have changed none of this. Under the current system, nine legislative members of the anonymous Joint Bond Review Committee give initial approval to bond packages, and final approval is given by the equally anonymous 5-member legislative/executive hybrid, the Budget & Control Board. Nowhere in all this is the General Assembly itself forced to take an up-or-down vote on bonds. The whole process takes place in the obscurity of bureaucratic alphabet soup (B&CB, JBRC), and if by chance the taxpayer knows about it at all, he has no one to hold accountable.

Here’s the interesting thing: The aforementioned “government restructuring” bill wouldn’t have changed that. The “reform” legislation would have replaced the Budget & Control Board with the Bond Review Authority. And the members of the latter would have been almost identical with the members of the former.

In short: There’s no point in “restructuring” government if the power and accountability structure remains the same.

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