News and Press Releases for March 2006

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03/22/2006

Gov. Sanford Signs Deficit Repayment Bill

New Law Directs Immediate Repayment of $105 Million Deficit

Columbia, S.C. - Gov. Mark Sanford today ceremonially signed S.1026, a bill directing $105 million of the 2004-2005 surplus toward repaying the state's accounting debt, otherwise known as the GAAP (generally accepted accounting practices) deficit. The problem was created in 1991 by the Budget and Control Board - and repeated in 1993 and 2002 by the legislature - when they decided to pay off the state's bills by changing the state's accounting methods rather than using real dollars. Gov. Sanford said the bill was a major step toward getting the state's fiscal House in order.

"When it comes to the state's fiscal obligations, I've always believed in the principle of first things first, and on that front I'd commend the House and Senate for their work in getting this bill to my desk," Gov. Sanford said. "Ultimately, I think most of the credit for addressing this issue has to go to Comptroller General Eckstrom for his diligence in pointing out a problem that's been consistently swept under the rug. As well, I think this bill highlights the need to continue putting our state's fiscal house in order with complete repayment of trust and reserve funds, and I'd ask the House to bear this in mind heading into next week's budget debate."

Comptroller General Richard Eckstrom first discovered the $105 million deficit in the fall of 2005. The attention he called to the issue led to the General Assembly agreeing to resolve the problem quickly in the current legislative session.

"At the beginning of this legislative session, the leadership of the General Assembly pledged to eliminate this deficit. I am grateful that the members of the House and Senate have honored that pledge by passing this legislation," General Eckstrom said. "Likewise, the Governor's support for this measure has been crucial and much appreciated. I believe this will significantly help our joint efforts to restore our AAA credit rating, which, in turn, will provide long term benefits to our taxpayers."

This is the second major deficit that has been repaid at the urging of Gov. Sanford and General Eckstrom. In 2003, the governor and comptroller general joined with legislative leaders to call for full repayment of a $155 million unconstitutional deficit left on the books by the previous administration, which was subsequently repaid in 2004.