Place your bets! THE BUDGET

Next Monday the House floor-debate begins on this year’s draft of our state’s budget.

The draft was printed and placed on all House members’ desks yesterday and discussions among the 124 members are underway in earnest. (PS. I’m wondering where the Earmark List is this year, maybe there are none. At least that’s my hope.)

Place your bets folks, because if we take the $350 million “Budget Stabilization Funds” for this budget (and $350 million in the following year’s budget), that’s exactly what we’re doing: betting that the economy will be better in two years.

Is that a bet we should make?

We’d also be betting the economy improves AFTER the 2010 elections are over and if not….well…we’ll just deal with the problems then, right? Is that ok with y’all?

I know, I know you’re thinking “…but Nathan, we’re gonna have to pay for the stimulus whether we take the money or not! Don’t let California get the benefit and we don’t.”

Yes, I’ve heard that said by many folks who want the feds to bail us out (even heard it today in discussions) but; remember folks, there is still $7,000,000,000 available to SC for other “stimulus” projects whether elected officials vote to spend this $350,000,000 this year to “stabilize our budget”.

Yes, we’ll be paying for the $1,000,000,000,000 stimulus for a lifetime (or two, or three) but if we take the $350 million and put in our budget, and in two years we’re not up to speed, we’ll be facing worse cuts than now AND may even have to look at tax increases to help the STATE budget. That’s why I believe that accepting the $350 million could actually lead to SC citizens’ paying MORE than “our share” now if we just said “no” to the $350 million for this budget and the next one.

Speaking of tax increases, do we look at passing those this year?? Don’t laugh. It’s on the table.

The budget, as drafted, takes the “stabilization money” and cut (among other things) aid to local subdivisions in order to meet some of the federal mandates required to actually GET the stabilization money. What does aid to local subdivisions mean? It means “local governments”. So, Nathan, what does THAT mean? Well, get ready for the possiblity of severe cuts in LOCAL services and, wait for it….increased taxes.. If we take those funds designated to help local governments (and right now it’s a huge chunk), local governments will inevitably raise taxes to cover the losses. Now remember, if that happens, WE didn’t raise those taxes on you. Or did we (indirectly)?

What about increasing the cigarette tax by 50 cents and using those funds to lessen other cuts in the budget and then…in two years….watch those cigarette tax funds go OUT of the general fund because….the economy will be better, right?

As someone who has (and does) support a cigarette tax increase, I don’t believe it has a place in the budget, just to fill holes in the short term.

I mean, y’all probably don’t know this, but for the past several years that’s the line we always hear inside the chamber: “Don’t deal with the cigarette tax in the budget. It needs to be a stand alone bill. Inside the budget it’s a year-to-year thing instead of a state law.” We also hear “We don’t want to grow Medicaid” but apparently these directives in the past now don’t mean anything and we can look the other way.

Heck, there’s been rumors that we may see several tax increase proposals presented during debate. Some would put back the sales tax on groceries (that we removed in the past) or even lift the local caps we placed via Act 388 (Property Tax) to allow local governments soften the blow from our actions.

You may be asking – surely there’s other options being discussed? Well sure. Somehow we have to get 63 votes to keep state government going.

What about REFORMS so that IF we “have to” end up taking the federal “budget stabilization funds” we can at least make sure the money gets spent wisely? What about making sure our colleges don’t raise tuition? What about making sure K-12 money goes to the classrooms? What about reforms to the entire budget process? How about zero-based budgeting for state agencies? What about stipulating that these budget funds can only be used for one-time programs?

Or what about the option to go with the “devil-we-know” and DON’T ACCEPT the “stabilization funds” for the budget. We tighten our belts by cutting agencies another 8% to 10% and then we won’t have to worry about artificially inflated spending items in the budget (propped up by two year’s of “Budget Stabilization Funds”) to have to continue to sustain when those two years of “stabilization” are yanked out from under us.

Remember, even if the House next weeks votes “no” to the “budget stablization funds”, our state still is in line for the $7 BILLION portion of the federal plan. In essence next week we’re really only saying “give us” or “don’t give us” 5% (10% in total, after 2 years – thanks for correction today by colleague) of the money coming our way.

It’s what that .5% can end up costing you and our state in two years when we don’t have the funds to keep the money train going that is really giving several of us concern.

If the bet on the economy doesn’t pay off, you better believe many agencies and folks will say “you gotta keep that spending going (inflated next two years with $350M from stimulus) because you have been doing it for…. the past two years!”

I’ve heard a lot already from my community and am working to represent your wishes and what I (and many of you) feel is best for our state.

Are these easy decisions? No.

Will any current option being discussed get a consensus 63 votes on the House Floor next week? Not sure. But 63 will be needed to pass the budget.

Will many officials have to “hold our noses” and choose the lesser of the evils presented? Most likely.

Many feel the “easy” vote (or I guess the “less painful” vote) is to just take the money; buy two more years to get the economy “stimulated”; and put millions back into education, health services, and other agencies. The million dollar question (or in this case 700 million dollar) is – will our state’s economy be “better enough” in two years to sustain these new levels of spending or not?

Is this a bet you’d make?