Gov. Sanford Unveils 2008-09 Executive Budget
BUDGET CUTS OVERALL SPENDING, PROVIDES INCOME TAX RELIEF,PAYS FOR FUTURE PROMISES, FULLY FUNDS CORE SERVICES
Columbia, S.C. – January 7, 2008 – Gov. Mark Sanford today released the fifth Executive Budget of his administration – a balanced, activity-based $6.8 billion spending plan for Fiscal Year 2008-09 that cuts overall spending levels, provides for an optional income tax rate cut, and continues paying for unfunded retiree commitments, while increasing funding for core government functions such as education, law enforcement, and healthcare.
Over the past three years, government spending in South Carolina has increased by more than 40 percent. The governor’s budget spends $326 million less than last year, about a 4.6 percent reduction. Even with that reduction, the recommended spending level still represents a 36 percent increase in state spending over the past five years, and roughly 7 percent annual growth – far greater than the average 4.4 percent growth in population plus inflation over that time. This year, economists are projecting roughly $200 million in new money coming into Columbia, over $1 billion less than last year’s new revenue growth. Using a combination of that new money and projected cost savings, the governor’s budget increases funding to core services by $292 million, and puts $255 million toward paying down the state’s unfunded liabilities.
The governor’s budget also contains a proposal for an optional flat tax of 3.4 percent – paid for with an increase of 30 cents per pack in the cigarette tax – aimed at bettering South Carolina’s competitive position when it comes to tax rates.
“We’ve said for the past four years that you can’t grow government faster than the underlying economy, and that’s why we needed to limit spending when times were good,” Gov. Sanford said. “Now we’re seeing the effects of that overspending, and as a result some tough choices are going to have to be made this year with regard to the state budget. In doing so, we’d again urge lawmakers to take these recommendations we’ve put forward as a starting point for budgeting in a more fiscally responsible manner. That includes limiting the overall growth in spending, taking care of future liabilities now, and keeping a closer eye on annualizations – which are another reason we find ourselves in the budget situation that we’re in. As well, we’d urge lawmakers to adopt our proposal for a flat tax, which we believe would pay some real dividends in terms of making our state more competitive and helping grow the economy.”
The governor’s budget, which has been submitted to the South Carolina General Assembly, was crafted again this year following a series of public agency budget hearings and working with different “results teams” composed of state employees, board appointees, private citizens and issue advocates that were asked to rank roughly 1,600 different government activities in order of priority. Based upon that work, this year’s Executive Budget recommends roughly $183 million in suggested savings, the highest number ever.
A complete copy of the budget is available for download:
2008-2009_Ex_Budget [pdf 3656KB]