Tax Surplus Isn't Spending Money

To the editor:
In the Friday November 11, 2011 edition of your publication was an article on South Carolina’s state budget surplus. http://www.thestate.com/2011/11/11/2041941/panel-adds-400-million-to-states.html.

In the article, Mr. Beam’s opening paragraph frames the dilemma inherent in South Carolina government when he says, “SC Lawmakers will have an extra 920.5 MM to spend.” It isn’t extra. And the idea that this is lawmakers’ money to spend is exactly what is wrong today in government at all levels.

Mr. Beam goes on to describe the problems in the SC economy: “The state’s labor force is growing faster than new jobs are created. Permits to build single family homes are at 30-year lows. And inflation is increasing faster than wages.” Given these concerns in the economy, how can the legislature simply look at the people’s money and decide that it’s theirs to spend. No amount of government spending will solve these problems. In fact, citizens may be better off getting some money back in their pockets to help with these economic concerns instead of state government keeping all of it to spend. Unfortunately this won’t happen.

The article editorializes on programs that “provide vital public services”. Our problem is that we haven’t made any difficult choices on what is truly “vital”. We can’t provide all things to all people. Nor can we look to our government as the sole source to solve problems in the economy. The legislature has a tendency to overcommit and the current dilemma in social program funding is one of several budget areas where we have borrowed from the future revenues by not being willing to make the tough choices today on what is “vital”.

Having been involved in analysis of the state’s pension crisis, I can testify that our state government has already made promises to state employees it can’t keep. The first iteration of the hard choices associated with this crisis came last week as the Budget and Control Board voted to reduce the annual cost of living adjustments for retired state employees. A $20 Billion shortfall in pension dollars will come home to roost at some point. These promises preclude spending on Medicare, road construction, education, or the mental health programs Mr. Beam mentions in his article and are an example of legislators not deciding on what is vital. The dollars we spend today instead of paying down these debts will only further hurt the economy in the future and cause a downgrade in South Carolina’s credit rating. Legislators must make the hard choices on what is actually vital for the future prosperity of our state, beginning with not viewing tax surpluses as “spending money”.