Governor Vetoes 0.07 Percent of the State Budget

Farm Bill

HOORAY FOR LIMITED GOVERNMENT, RIGHT?

After the General Assembly rammed through a record high $25.5 billion state budget with little public debate, Governor Nikki Haley had the opportunity to make some substantial vetoes of items in the bloated budget. Her vetoes amounted to roughly $18.5 million. That may sound like a lot, but it comes to 0.07 percent of the entire state budget.

That amount is significantly lower than Haley’s vetoes in 2012 and 2013, and it pales in comparison to Gov. Mark Sanford’s vetoes. Gov. Haley did, however, veto some things that deserved it.

A Study Committee to Sneak in Medicaid Expansion Although this proviso represents a tiny dent in the current budget through funding the usual mileage and per diem of its committee members, this proviso has the potential to cost South Carolina billions of dollars in the future. The study committee it creates consists of three Senators appointed by the President Pro Tem, three House members appointed by the House Speaker, the director of the Department of Health and Human Services and the director of the Department of Insurance.

The committee would study “the potential costs and benefits, including the development of an alternative plan, of providing alternative health care to individuals under sixty-five years of age with incomes at or below one hundred thirty-eight percent of the federal poverty level.”

In other words: the committee’s purpose is to promote “alternative” ways of expanding Medicaid in South Carolina. Other states have found ways to still collect billions of federal expansion dollars (thus putting the state on the hook for billions more) but spend the funds outside the normal Medicaid system. One is the so-called Arkansas private option Medicaid expansion that’s already costing that state’s taxpayers millions. Not all study committees have major implications, but when legislative leaders are intent on pushing through a certain policy, they’ll often use a “padded” study committee report as ammunition. And this committee is stronger than most: it must include proposed legislation to the General Assembly no later than January 1, 2015. So, if this proviso remains in the budget, there will likely be a bill filed early in next year’s legislative session to expand Medicaid.

Prohibiting this committee’s existence keep the legislature from expanding Medicaid – which in any case has already been happening – but permitting it would make the attempt a lot easier.

$12,000 Pay Raise for Lawmakers The $1,000/month in-district pay increase for lawmakers that was introduced in the Senate budget survived all the way through the final budget approved in both chambers. However, it’s only included as a one-year proviso and isn’t explicitly funded in the state budget. In any case, the veto of this item – which would likely add at least $2 million if the raise was use by all lawmakers – is absolutely necessary. Not only have lawmakers not done anything to deserve this raise: the way they’ve tried to push the raise through is not transparent.

Pork – Some of It, Anyway

The vetoes do include what the governor’s statement calls “Old-Fashioned Pork” Some examples include:

  • $250,000 for Lake Ashwood in Bishopville – which isn’t even state property
  • $150,000 for the Palmetto Trail
  • $2,000,000 for the Sports Development Fund
  • $300,000 for Football Exhibition Games
  • $200,000 for the Southeastern Wildlife Expo

What the Governor Let Slide While this is far from an exhaustive listing of what we believe the governor should have vetoed (we’d include entire agencies such as the corporatist Department of Commerce), below are a few wasteful, redundant, or otherwise useless appropriations the governor could easily have axed to reduce the rate of state’s government’s expansion.

Corporate welfare. The governor made a token gesture against corporate welfare by vetoing $750,000 appropriated for the South Carolina Council on Competitiveness, an organization dedicated to “economic development activities.” While the governor was right to veto this appropriation, she left untouched the $45 million in the budget dedicated to the Deal Closing Fund, essentially a slush fund used to bribe companies to relocate to or expand in South Carolina. Despite its track record of economic failure, the governor seems to remain wedded to South Carolina’s cronyism-based development strategy.

More Funds for Infrastructure Bank. Unsurprisingly, the governor failed to veto millions in funding to the State Infrastructure Bank (SIB). Appropriations for “transportation infrastructure” provided by the SIB increased from $50 million in last year’s budget to $150 million in this year’s. The SIB uses the funds it’s appropriated to create more government debt via bonds, issued for the purpose of funding road construction in favored counties.

This debt creation is how South Carolina managed to generate more than $1 billion for roads over the past year, as the governor likes to boast. What’s far more noteworthy is that it is entirely dedicated to new construction rather than maintenance, and that 95 percent of SIB expenditures have gone to benefit six counties in South Carolina. In short the SIB is an exceptionally poor entity with which to attempt general infrastructure maintenance problems throughout the state. There are methods to address South Carolina’s road problems that don’t involve debt or tax hikes, but new debt for new constructions seems to be the preferred answer.

No Vetoes for the Capital Reserve Fund. Governor Haley left untouched $127.7 million in the capital reserve fund. While the monies appropriated to this fund are meant to be used on important capital projects, it has long since been turned into an all-purpose slush fund for lawmakers pork barrel spending. The fund contains items like these:

  • Locate SC Site Inventory: $6 million
  • “Office of Innovation”: $1 million
  • Department  of Commerce “Research Initiatives”: $4 million
  • Sesquicentennial State Park Splash Pad: $500,000
  • Trident Tech Aerospace (state college provided Boeing workforce training) $10 million

Moreover, although some items in section 1B of the budget were vetoed, several other projects in that slush fund were left alone. Examples: $200,000 for TransformSC and several other special spending items for higher education institutions, including $2 million for the acquisition of surplus property for the University of Charleston.

As in years past, the likelihood is that the General Assembly will override most of the governor’s vetoes, meaning the $25.5 billion budget won’t be decreased in any discernible way.

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