As the budget debate begins in Columbia, a South Carolina House committee voted Tuesday to suspend a local government funding formula so it can be more “flexible” in crafting next year’s budget.
State law requires 4.5 percent of the state General Fund to go towards counties and towns, but legislators have not reached that mark the past few years due to lower tax revenues. This year, Republicans say they do not expect to reach that level once again.
State Rep. Jim Merrill (R-Charleston) summed up their position: “If you go to most folks out there and you ask, ‘where are we going to put money: K-12 education or to increase the Local Government fund?’ I will bet you a million dollars 99 percent of them say ‘let’s put it into K-12.”
However, Democrats on the committee said their counterparts were tone-deaf to the concerns of municipal governments– especially counties, which depend heavily on the Local Government Fund.
Rep. Harry Ott (D-St. Matthews) said it was especially unfair because the state still requires counties to provide specific services even without the funding. “We’re saying we want you… to do all the things we mandate you to do, we’re just not going to send you the money to do it with,” he told the committee Tuesday, “Some of us simply think that’s not the right approach.”
Ott said he would only support cuts to the fund if the legislators gave municipal governments more freedom on how they use the money for “unfunded mandates”. Rep. Joe Neal (D-Columbia) agreed, “The reality is when you don’t have the money, you have to… cut costs.”
The committee voted to suspend the law by a party-line 15-8 vote. The legislation now goes to the House floor.
Merrill accused Democrats of trying to score political points. “There’s a finite amount of money. You know that,” he told Ott, “So you can’t sit there and say, ‘we’ve got to fund this one, this one, this one, this one. Eventually you run out of money.”
While their vote Tuesday does not technically mean the fund will be cut (theoretically, the legislature could suspend the law so they could fund above the 4.5 percent rate), most legislators agree that will be the likely result.
“It is likely we’re not going to have the money to fund at 4.5 percent,” Rep. B.R. Skelton (R-Six Mile) said, “So, we have to have the flexibility of the bill.”
The Local Government Fund was created in 1991 as a way to simplify the patchwork of local taxes that flow through the state before going back to county and city governments.
The committee will spend this entire week crafting the budget. It will probably reach the House floor next week.