At the Governor’s budget veto briefing, her Deputy Chief of Staff was tasked with explaining to the members of the legislature why the Governor vetoed roughly $105 million from the $5.8 billion General Fund budget and the entire $107 million Capital Reserve Appropriations bill.
In her veto message, the Governor said that the new state budget should not exceed population growth plus the Consumer Price Index (CPI) over last year’s budget. That formula would allow a growth of 4.83 percent in this budget. According to the Governor’s vetoes, the General Assembly was $75,640,905 over the constraints of her cap.
While the precise details and rationale of the Governor’s math is unclear, it is certain that the Governor included the one-time $146 million that is directed to begin pay-off of the Federal Unemployment Insurance loan in her calculations to allege that the General Assembly overspent by exceeding her cap. This loan payment/tax cut will help SC businesses avoid an additional burden in FUTA taxes and represents a 24 percent reduction in business’ unemployment tax liability.
Many legislators questioned the logic of defining paying down debt as “spending.”
If the budget as passed by the General Assembly were to be analyzed apples to apples with last year’s budget, the growth in spending over last year’s budget is only 2.18 percent -- far below the Governor’s 4.83 percent desired cap. Even if the Governor’s numbers are used without question, backing out the unemployment loan payment would put the budget $71 million under the governor’s cap. Furthermore, if all allocations that can be argued are not “spending” or “growing government” are not included, the growth rate for the budget would be even less than 2.18 percent. (Within the budget, there are hundreds of millions of dollars in reserve fund allocations and general obligation bond payments.)
In lean budget times like these when agencies, higher education institutions, programs for the poor, and local governments are still enduring cuts from the state, it is hard to understand why the executive and legislative branches can’t agree on what counts for what. Once again the Republican Governor and the Republican-controlled General Assembly disagree over how to spin the state’s spending. This is beginning to have a distinct Sanford-era refrain.
The Governor and legislators split again when it came to funding SCETV and the SC Arts Commission. Shortly after taking office, Governor Haley declared that there should be no state funding for either of these agencies. Legislators, who had worked with the Governor’s Office on a compromise for SCETV, felt betrayed when the Governor vetoed the compromise. With tremendous statewide support for the work and economic benefit that these educational and cultural organizations provide for our state, the legislature overwhelmingly overrode these vetoes. In the process, ETV received a lot of positive attention for its roles in K-12 Education, law enforcement training, emergency services, and transparency in government.
Despite the Governor’s veto, legislators stuck by their commitment to increase education funding with some additional revenues that came in above projections. An additional $56 million was added to per-pupil spending which will increase the base student cost to $1,880. This is $92 more per student than the original House-passed budget back in March. While it’s great that we could increase the base student cost a little more, we are still allocating over $800 less per student than our state funding formula mandates.
Overall, the General Assembly sustained nine of the Governor’s 34 vetoes on the general fund appropriations bill reducing the budget by $508,000.
The General Assembly also overrode the veto of the Capital Reserve Appropriations bill. It included one-time funding for economic development and training schools for companies, deferred maintenance for higher education and veterans nursing homes, law enforcement equipment, and statewide implementation of electronic filing for our court system.
Notwithstanding the Governor’s complaints to the contrary, the General Assembly passed a budget that is below the purported spending cap. However, in spite of all the talk about spending caps, there has not been much discussion about whether the budget is meeting the needs of the state, specifically the needs of education, infrastructure, and law enforcement.