Budget Transparency: How to Get There


Each fiscal year, the South Carolina state budget is split into two major pieces: Part 1A and Part 1B. While both parts are excruciatingly boring to read, the first part – 1A – is at least understandable. Part 1B, on the other hand, is barely legible even to people whose job it is to understand state budgets.  Part 1A looks like a budget: Each agency has its own chart of line items showing how much money is allocated to each agency, program, function, etc. That’s why, when members of the news media talk about “the budget,” they’re almost always talking about that portion of the budget they can read – Part 1A.

Part 1B, by contrast, well, it looks like this (click Section 1 and it will take you to the whole thing). At 197 pages and 112,836 words long – roughly the length of a full-sized book – Part 1B is virtually impossible to read for anyone who hasn’t been shown how to read it.

The problem, of course, is that 99.99 percent of taxpayers haven’t been shown how to read Part 1B of the South Carolina state budget. No level of “transparency” will change that. It doesn’t matter much whether Part 1B is put online as soon as lawmakers pass it – if taxpayers can’t read it, it might as well be a secret.

So, what exactly is Part 1B? It’s is a list of budget provisos that in some cases appropriates funds and in others stipulate how agencies and programs may spend funds. Hundreds of millions of dollars are allocated in 1B, the great majority of which are dedicated to such highly questionable items as tourism marketing, “studies” for the feasibility of new roads, and regional “economic development” nonprofits. Here are just a few:

  • Proviso 33.34 is the GOP “alternative” to plan to Obamacare – a massive giveaway to hospitals for reasons as yet unexplained. We’ve discussed this proposal at length and hope to see some serious debate on the floor.
  • Proviso 50.22 authorizes the Department of Commerce to use $300,000 for the Council on Competitiveness to “provide funds for existing business economic development activities.” Inexplicably, another proviso – 118.17 – authorizes $300,000 for the same program.
  • Proviso 117.7 seems like a good idea until you actually read it. This would prohibit state agencies and the like from increasing fees unless it’s done by statute (i.e. by the General Assembly). Unfortunately, the proviso carves out a number of exceptions to the prohibition – most notably higher education institutions and government healthcare facilities. No doubt more exceptions will be added, making the proviso completely useless. If anything, the prohibition should apply especially to state universities, since these are notorious for simply raising tuition as a way of avoiding tough budget decisions. In any case, fines and fees are a form of tax, and state agencies shouldn’t have the right to raise taxes absent authorization of the General Assembly. To say the same thing another way: The General Assembly shouldn’t be allowed to avoid responsibility for tax increases.
  • Proviso 117.34 allows the State Transportation Infrastructure Bank or Railroad Commission to issue grants (funded by taxpayers) to develop “innovative transportation technology.”
  • Proviso 118.17 is full of goodies for state agencies and programs. Just three examples: $220,000 for a university center in Greenville; nearly $8 million to the Department of Commerce for the Deal Closing Fund (handouts for corporations that promise to invest and/or create jobs); and $1.6 million for the Lexington County Maintenance Complex.

Much of this money doesn’t even show up in the budget documents most people look at in Part 1A and think of as “the budget.” Furthermore, these “provisos” – as items are called in 1B – aren’t scrutinized and debated the way line items in Part 1A are. And since provisos in Part 1B are only in effect for one year, lawmakers generally carry them over from year to year – making them in effect perpetual laws and/or spending items that exist wholly outside the public view.

So what is the solution? Simple: Eliminate Part 1B and give all money that would be appropriated by it back to taxpayers. At roughly $24 billion, the Ways and Means budget for FY 2014 is vastly larger than any state budget needs to be to provide basic statewide services, and since the vast majority of spending items in 1B consist of non-core items spent in virtual secret, the money should rightfully be placed back into the hands of those who produced it in the first place.

Some may argue that not all funding items in Part 1B are illegitimate. Maybe. But if that’s true, lawmakers ought to budget for those items in the General Fund, where they can be deciphered and honestly debated. Part 1B has long since become a gigantic hiding place for potentially controversial spending items. That is not a legitimate function of a state budget.

But since there is little to no chance that South Carolina lawmakers would actually return the money tied up in Part 1B to taxpayers, the least they could do is put its appropriations where they belong – in Part 1A – so that at least the public and media can see what they are.

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