Why the Surplus Won’t Solve Anything
STATE HOUSE ECONOMICS, CHAPTER III
On Monday the House Ways and Means Committee unanimously approved a standalone bill to appropriate $415 million in surplus revenue. The proposal is separate from the state budget bill, which is ordinarily where lawmakers appropriate surplus revenue when it becomes available. The proposal would divvy up the $300 million over which lawmakers have discretion (about $115 million is already appropriated by law to various sources) by sending $150 million to counties for roads, $70 million for a special road project for Volvo, and $16.4 million to pay down debt. That last item, though – “paying down debt” – would only be done to free up the state’s bonding capacity in order to borrow $50 million in bonds for Volvo.
The proposal is wildly irresponsible even by the high standards of the South Carolina legislature.
1) About half of the surplus money isn’t really money – not yet anyway. It’s revenue a government agency projects the state will receive but may or may not receive.
The state Board of Economic Advisers, or BEA, has certified that the state took in $200 million more than expected, so the agency has built an equal amount into next year’s revenue projections. But there is no guarantee that another $200 million will in fact be available next year. Since we’re not even sure half of this amount will turn into actual money, therefore, and since there is no real mechanism to send the money back to taxpayers (though there should be), the only sound course is to apply the funds to next year’s budget – not to find new ways to blow the money, both actual and projected, as soon as lawmakers get their hands on it.
2) There is not now – nor has there been at any time in 2015 – any plan that would ensure that new revenue would actually be spent on “roads.”
Under the current proposal, $150 million of this year’s surplus revenue would go directly to County Transportation Commissions, or CTCs. On its face, this would seem to take the most problematic component of road funding – legislative influence – out of the equation. In this plan, however, lawmakers would direct the CTCs to spend the money only on state roads and according to certain criteria. Bear in mind, too, that CTCs don’t simply represent the interests and needs of the counties: in typical South Carolina fashion, they are appointed by legislative delegations. In effect, then, the problem with this surplus plan is the same as it has always been. Shoving more money into the same legislature-dominated, unaccountable system will not result in a better road system.
3) Using projected surplus money on a special project for one company – a special project whose details are deliberately hidden from the public – is sheer budgetary malpractice.
The proposal would also pay off some state debt merely in order to go $50 million deeper into debt and devote that money to a project benefiting one company. That, plus the $70 million the plan devotes to the same company, suggests just how backward our lawmakers’ priorities have become: most of the state’s transportation infrastructure is falling apart, but our public officials are ready to devote hundreds of millions to one company for one project.