Ready to Watch Lawmakers Not Follow the Law?
THE STATE BUDGET LAW – WHAT IT IS, WHY IT MATTERS, WHY LAWMAKERS IGNORE IT
Debate over the state budget has already started, but you don’t know anything about it. Of course, that’s intentional. Legislative leaders have long preferred to keep the public out of discussions of each year’s state spending plan, and this year will be no different.
But here’s the catch. South Carolina’s budget process law, as written in the law code, is both constitutional and fully transparent. The problem is not the law itself. The problem is that lawmakers don’t follow it.
The law requires:
- state agencies to explain exactly what they want and why, in detailed, line-by-line funding requests,
- the governor to present an executive budget to the legislature,
- and House and Senate appropriations committees to debate the governor’s budget in joint open hearings.
The law makes sense. It does not call on the governor to appropriate dollars, but rather to propose the first draft of the state budget. After all, the governor – unlike lawmakers – is elected by the entire state, and therefore only the governor has a statewide perspective on what state government’s priorities should be.
The legislature, on the other hand, will make the final call on what the budget looks like, but lawmakers have the duty to begin the process with an open debate on an entire proposed budget.
The unlawful process our lawmakers actually practice, by contrast, is a deliberately confusing and non-transparent mess. Here’s why it matters:
What does the law require of state agencies?
Before the first of November each year, state law 11-11-30 requires all state agencies to report to the governor an itemized estimate of their funding needs. The estimate forms used to make these reports are to be provided by the governor.
The comptroller general is also supposed to provide statements to the governor by November 1st. These statements are to show agencies’ current fund balances, monthly expenditures, revenues, etc. It’s also required to show an itemized balance sheet for the entire state as of the end of the last completed fiscal year.
Finally, by December 1st the comptroller general must provide to the governor an itemized estimate of the financial needs of the state. These estimates are to be accompanied by detailed explanations of all funding increases or decreases, and are to be included in the executive budget.
What do agencies actually do?
Agency budget requests are almost always incomplete. The biggest problem? Requests simply assume the majority of their funding and don’t bother to itemize and explain each expenditure, or even each expenditure area. They simply tell lawmakers what new money they supposedly need, leaving to the imagination what they’re doing with current funding.
Even the program funding requests that are listed often aren’t accompanied by any significant detail (what they plan to purchase, how many new employees will be hired). Instead they merely explain what increased funding will allow them to do that they can’t do now.
What does the law require of the governor?
Code section 11-11-70 requires the governor to submit the executive budget to presiding officers of the House and Senate within five days of the beginning of regular session. As with agency funding requests, the governor’s budget is required to contain a complete and itemized plan of all proposed expenditures for each state agency, program, etc.
What does the governor actually do?
The governor does submit an executive budget – Gov. Sanford was the first governor in many years, perhaps ever, to come anywhere close to submitting an itemized executive spending plan, according to state law – but today’s executive budget proposals suffer from the same problem as agency budget requests.
Gov. Haley, in any case, does not provide a “complete and itemized plan of all proposed expenditures.” While the governor does at least list out recurring spending from the previous fiscal year, unlike state agencies, she fails to provide any truly detailed information on expenditures. Almost all funding new and recurring is presented in broad line items.
Once again the kind of detailed use of expenditures the law seems to require is absent from the executive budget.
What does the law require of the legislature?
Five days after the governor submits the executive budget, the House and Senate appropriations committees – House Ways and Means and Senate Finance – are supposed to sit in joint open sessions to consider the governor’s spending plan.
The joint committee can compel the attendance of agency heads or representatives to answer questions, and the governor has a right to attend these public hearings and be heard on all matters before the committee.
What does the legislature actually do?
Modern South Carolina state budgets are solely the product of lawmakers. They propose their own budget line items, and they vote on the budget they alone have proposed to themselves.
Code Section 11-11-90 is one of the soundest provisions in South Carolina’s state budget law. The legislature ignores it. The governor’s budget is essentially a dead letter when it is delivered to the General Assembly. Rather than sitting in joint open hearings on the governor’s budget, legislative committees start from scratch.
The legislature begins its actual budget process when the House Ways and Means committee begins holding a bewildering array of subcommittee meetings to hear budget requests from agencies that’ve already submitted requests to the governor. There are, for example, 13 such meetings scheduled for the first week of the 2016 legislative year. Many of these subcommittee meetings take place at the same time – making it literally impossible for even an experienced reporter to follow all of what goes on.
To make matters worse, these meetings do not typically include discussion of all funding sources. Most often federal funds and other funding appropriations are simply taken for granted and legislators limit discussion to general fund dollars.
Once the full House Ways and Means committee combines its subcommittee reports into a complete budget, the House will vote on it and send the budget to the Senate, where the Senate Finance committee will repeat the whole fractured process. After the Senate passes a budget an appointed conference committee will reconcile the two budget bills, which will then be voted on by both chambers.
The convoluted and duplicative budget subcommittee process used by the legislature makes it impossible for anyone to follow it. Contrast this with the legally required process which condenses all these subcommittee meetings into one joint meeting open to the public.
Legislators don’t maintain the current labor-intensive process for fun. For them, the advantages are obvious: The process bypasses the public and makes it highly unlikely that any one item or program in the state budget will become controversial early enough in the process to make a difference. It’s for that reason, one assumes, that some lawmakers have recently attempted to repeal code section 11-11-90.
Other budget laws ignored by state officials
There is an entire chapter of the state code dedicated to the oversight of federal and “other” funds (fines and fees, dedicated revenues) in the state budget. State law requires that all anticipated federal and other funds be appropriated through the budget, and that the budget contain any conditions imposed on the expenditures of these funds.
State agencies are supposed to submit to the governor detailed statements of the sources of all federal and other funds contained in their budgets. (SCPC identified the need for this reform and recommended the model, which was passed in 2011.) The submissions are also supposed to include any conditions imposed on the state by the acceptance of federal funds such as “matching requirements; maintenance of effort requirements for the activity for which the funds are to be expended; limits on program changes, including eligibility requirements, either by agency action or legislative enactment; and any other requirements that limit the authority of this State.”
The governor is also supposed to use this information to provide her recommendation to House and Senate budget committees on the acceptance of federal funds. If the governor recommends the acceptance of federal funds, her recommendation must include “the details of the conditions imposed by the inclusion and appropriation of the federal funds.”
In reality, no part of this law is fully followed by state officials, and most officials ignore it altogether. The final budget says nothing about the conditions attached to the acceptance of federal funds. And although the forms for agency budget requests do include sections asking about matching funds and the requirements of any such match, as well as a section asking about future impact from programs like maintenance-of-effort or other obligations, these sections are typically answered in a word or at most a sentence, and do not come anywhere near providing the information required by law.
Why does this matter?
First, it’s the law. The law should be abolished or followed. Not ignored.
Second, following the budget law would save resources and cut down on the time needed to pass a budget. Despite having one of the longest sessions in the country the current budget process still often results in the legislature going into extended session to finalize the budget.
Understanding the budget is crucial to understanding state government. Without detailed explanations of state spending, it’s difficult if not impossible to find waste or hold legislators accountable for spending decisions. It’s also far more difficult to reject federal intrusion into state policy. The federal government’s principal tool used to push mandates onto the states is tying these mandates to the acceptance of federal funds: citizens deserve to know what these mandates are in a clear, accessible form.
Without a transparent budget process that openly debates the acceptance of federal funds and the conditions attached to those funds, citizens will be facing an uphill battle when fighting federal intrusion into South Carolina.