Sunday, March 18, 2012

From the House

Bluffton Today

The budget plan that we have been crafting for weeks has assumed a final form that will please most observant taxpayers. It will also provide business owners tax relief in several ways, as well as support our state’s efforts to provide them more and better-trained workers. Our major port is assured a match for federal dredging funds when they become available. We also did the proper thing in replenishing our financial reserves ahead of schedule. And even with a total budget of around $6.3 billion, we also maintain our momentum in reducing the size of state government.

Here are some details:

Ways and Means Committee made certain that our various reserve funds were replenished by a nearly $400 million increase to these vital accounts. Recent painful experience showed the absolute necessity of healthy balances in these accounts to smooth out any potential downturn.

Recognizing that a huge fraction of the jobs in our state are related in one way or another to our ports, we placed $180 million in the Harbor Deepening Reserve Fund. This is the 60% match required for federal dollars to be used to keep the Port of Charleston competitive. It also is a marker of the seriousness with which we view the necessity of this work. Most states only commit to borrow the match when the federal government gets around to their appropriation. We put ours in the bank.

For my first several years as your representative, I was part of a majority that started to roll back taxes in South Carolina. More recently, as a member of Ways and Means Committee and subcommittee chairman, I have been able to help craft and guarantee a level of tax relief. This year, we cut your taxes by over $600 in mainly two ways. The first is by a 12% cut in the tax that businesses pay into unemployment support. This totals around $77 million, which is now available for our business community to reinvest. For those over 65, there is $100,000 tax relief on residential property. For business owners, there is $50,000 property tax relief for manufacturing, depreciation, and reimbursements. This property tax relief reflects around $549 million remaining in taxpayer’s pockets.

For this representative, education is a huge contributor to economic development and jobs. This budget increases the state support of K-12 public education by $152 million to be used in the classroom, not for administration. This raises the base student cost to a respectable $2,012 per student. In addition, another $24 million is slated for the ReadySC Program to support worker training in our technical colleges.

Currently, there are 50 state agencies funded at or below their present levels. This is because we begin each agency’s budget process at zero rather than from what they received the precious year. This zero-based budgeting is a feature I have pushed for my entire political career. As a businessman, the old budgeting process was an invitation to excess and waste. As a result, in the ten years of my service in the House, the average agency is operating on 40% fewer dollars than that benchmark year. This is a real-world example of what smaller, more efficient government is all about. We can do a good job on our core functions with fewer state employees if they are more efficient, better trained, and properly motivated.

In the coming weeks, I’ll have more budget highlights and maybe a few surprises.