Stimulus Dollars Not Going to Teachers and Law Enforcement

Last session, legislative leaders argued South Carolina needed every dollar of the state’s $2.8 billion federal stimulus package to save jobs for teachers and law enforcement personnel. Faced with such dire needs, Gov. Mark Sanford’s suggestion to use $694 million in stimulus funds to pay down the state’s $8.2 billion debt sent legislators into a panic.

According to House Speaker Bobby Harrell (R-Charleston), the disputed stimulus funds were absolutely necessary to preserve essential government functions. Without the money, claimed Harrell, the state would be forced to lay off as many as 5,000 teachers and close down several prisons.

It was a seemingly life-and-death struggle between legislators and the governor. Thus the legislative leadership was greatly relieved (assuming they had any doubt as to the final outcome) once the state Supreme Court ordered the governor to spend the disputed funds as authorized by the FY09-2010 budget. Declared Senate Finance Chair Hugh Leatherman (R-Florence) in response to the court’s ruling:

This is a victory for our children. Without the money, hundreds of teachers across the state would have been laid off and classroom sizes would have increased.

This is a victory for our communities. Without the money, the highway patrol and SLED would have had to lay off officers, making our communities less safe.

Without the money, we might have seen prisoners released back to the streets before serving their full sentences.

Simply put, we had nothing to gain and everything to lose. It just did not make sense for us to let that money for education and law enforcement slip through our hands.

For anyone who had read the budget, the senator’s remarks were not without some irony. According to Leatherman, every dollar of the disputed stimulus funds was needed to keep classrooms open and prison doors closed. Technically, this might have been true. But this is only because the budget was written in such an obtuse manner that, without the disputed funds, education and corrections funding would have been cut. But to fully understand why the threats about layoffs were made, it is important to understand how this year’s budget differed from typical appropriations bills.

Usually the budget has two sections — Part IA (appropriations) and IB (provisos). But for FY09-2010, the legislature added another section: Part III (Part II merely being a placeholder). Part III, called the State Stabilization Fund, was devoted exclusively to using the disputed $694 million federal stimulus to create jobs and promote economic growth.

Note that Part III nowhere mentions teaching jobs or law enforcement jobs — just jobs. In any case, it remains true that education and corrections funding make up the bulk of the money allocated in Part III. This was intentional so as to force the governor, as well as any recalcitrant legislators, to support this section of the budget. In other words, the Senate Finance Committee specifically crafted the budget so that without the State Stabilization Fund education and law enforcement funding would have been cut in Parts IA and IB.

The Senate could have created an alternative budget that did not include the $694 million in stimulus dollars — a concrete option being provided by the Davis-Ryberg budget — but at the same time did not cut funding to essential programs. They chose not to.

Putting the pieces together, what all this means is that Part III was not about funding education and corrections at all. But about finding a way to continue to fund everything else — all those nonessential programs that should have been cut in a tight budget year.

Consider, for instance, the Department of Corrections budget. For FY07-2008, the Department of Corrections budget was $398 million. In FY08-2009, Corrections originally received $410 million, but this was reduced to $400 million after the November 2008 budget rescissions. For FY09-2010, Corrections received $400 million, with an extra $22 million being allocated in Part III.

Yet if that $22 million was so necessary, the legislature could have made targeted cuts of $22 million in the main body of the budget bill. In fact, a Policy Council review issued in May easily found $25 million in pork — much of it for questionable economic development projects. More cuts we did not mention there include:

  • $8.8 million for a new garage at the University of South Carolina
  • $5.3 million for a tennis facility at USC
  • $1.2 million for a practice facility for the Coastal Carolina baseball team

In addition, even a casual review of Part III — those funds specifically needed to avoid laying off hundreds of teachers and law enforcement officers — shows many programs receiving the disputed stimulus funds have little to do with education or corrections. Consider the following 10 programs funded in Part III:

1) Spoleto Festival: $100,000

Spoleto Festival USA organizes the yearly Spoleto Festival in Charleston. This arts festival includes opera shows, comedies, and plays. As a nonprofit organization, Spoleto Festival USA should be able to exist without state funding and could pursue alternatives — reducing shows, raising ticket prices, pursuing more private grants — that don’t require taxpayer funds. Needless to say, $100,000 for the Spoleto has nothing to do with saving essential teaching and law enforcement positions. Rather, it’s a subsidy for the tourism industry in Charleston.

2) Southeastern Wildlife Exposition: $100,000

The Southeastern Wildlife Exposition (SEWE) will be using its share of your tax dollars for operating and marketing costs. The SEWE budget is about $2.2 million. Given the popularity of the SEWE, it’s difficult to see why the exposition wouldn’t be able to raise funds by obtaining additional sponsorships or increasing ticket prices. Like many of the programs listed here, SEWE has not yet received its stimulus check and is unsure exactly when it will get the money. But this would seem to suggest they are getting along just fine without it.

3) Department of Natural Resources (DNR): $150,000

Unlike some of the other programs mentioned here, DNR’s stimulus dollars will at least be used for education. The Department has partnered with the state Dept. of Education to provide outside-the-classroom programs to students, run by DNR staff. Clearly, though, we are not talking about essential positions.

4) Department of Agriculture: $250,000

The Dept. of Agriculture plans to use its share of the stimulus for either marketing or to make up general budget cuts. The Department’s marketing budget was slashed by about $1 million for FY09-2010 — and with good reason. As reported previously, the Dept. of Agriculture has spent $2.5 million over the past 2 years on such ill conceived ideas as the Palmettovore ad campaign. That’s another couple million that should have been used to fund essential services, reduce taxes or pay down the debt.

5) Arts Commission: $400,000

The Arts Commission indicated it will disburse most of its stimulus funding in the form of grants — but none of them to save teacher’s jobs or keep convicts off the streets. For example, the Hilton Head Symphony Orchestra will receive $10,925 so that they can maintain the same performance schedule as last year. Without this supplemental funding, the orchestra would have cancelled one show.

6) Department of Archives and History: $500,000

The Archives Department may serve an educational function, but is clearly not a deliverer of primary education to students. The Department plans to use its share of the stimulus windfall to cover operating costs and fill positions cut by previous budget reductions.

7) Forestry Commission: $500,000

With the Commission’s budget being cut by Part I of the FY09-2010 budget by $4 million, this money will be used to retain staff. But what happens in two years when the money runs out? The General Assembly should not be using non-recurring funds to pay for recurring positions.

8 ) Educational Television Commission Satellite Lease: $540,000

The Commission will use its funding to pay the lease for a satellite that beams programming to schools and law enforcement organizations. This program has been funded with nonrecurring appropriations for the past few years.

9) Clemson University PSA: $2,500,000

Clemson plans to use its funding on research farm services (dairy, bee farms) and for 4-H youth camp programs. Their approach is to take this funding — knowing it is a one-time appropriation — and put it in revenue generating programs. That is a good idea¦ but the real question is why can’t these programs be self-sustaining in the first place?

10) Department of Commerce/Regional Economic Development Organizations: $3,450,000

These funds will be channeled to 7 regional economic development organizations and four counties. Of the funds, $3,150,000 will be split evenly among the following seven organizations:

  • Central SC Economic Development Alliance;
  • Charleston Regional Development Alliance;
  • Economic Development Partnership;
  • North Eastern Strategic Alliance (NESA);
  • Southern Carolina Alliance;
  • Upstate Alliance;
  • LowCountry Economic Alliance.

The remaining $300,000 will be split among Chester County, Lancaster County, Union County and York County.

The counties and economic organizations can only access this funding once they have raised an equal amount of money in private donations. Some of the economic groups say they plan to use the funds for marketing. Others were confused about when the money would arrive, as well as what procedures needed to be followed in order for the matching funds to be eligible.

One wonders, though, who these private donors will be and what they will get for their money? If the state’s track record with hydrogen is any indication, one thing is sure — taxpayers will end up paying for whatever sweetheart deals get struck.

Festivals, concerts, television and economic development boondoggles. That’s what the stimulus dollars dedicated to saving teaching and law enforcement jobs are being used for. Had the money instead been used to pay down the debt, the state would have saved taxpayers $168 million in interest payments over two years. Or, better yet, the legislature could have made real strides in reforming the budget process and cutting long-term spending. But, who cares? It’s for the children, right? ¦ Well, at least, they’ll be the ones stuck paying the tab.

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