CONTROLLED GROWTH IN GOVERNMENT SPENDING IS ESSENTIAL TO STATE PROSPERITY

A recent Greenville News editorial took issue with a bill in the SC House that would cap growth in local government spending to inflation plus population growth. Their main argument seems to be that local governments must have the ability to increase spending above and beyond the cap amount in order to provide for the safety and welfare of the local citizenry. CONTROLLED GROWTH IN GOVERNMENT SPENDING IS ESSENTIAL TO STATE PROSPERITY

BY REP. GARRY SMITH

A recent Greenville News editorial took issue with a bill in the SC House that would cap growth in local government spending to inflation plus population growth. Their main argument seems to be that local governments must have the ability to increase spending above and beyond the cap amount in order to provide for the safety and welfare of the local citizenry.

The ironic part is that’s exactly why I, Speaker Bobby Harrell, Majority Leader Jim Merrill and others introduced this legislation.

Many local governments are growing at an unsustainable rate. This uncontrolled growth is hindering both businesses and the individual taxpayers’ ability to prosper, which is adversely affecting their welfare. The Local Government Fiscal Accountability and Fairness Act will force local governments to prioritize more and protect the hard working citizens of South Carolina.

It is important to note that some local government have taken it upon themselves to show the type of fiscal restraint that this bill is intended to afford, most notably our own Greenville County whose council works well under a self-imposed cap right now.

But the facts in South Carolina do speak for themselves: From 1995 to 2006, local governments raised millage in 44 out of 46 counties; total average statewide millage jumped 80 mills over that same period -- 277 in 1997 to 357 in 2005; from 2000 to 2005, the value of one mill increased an average of $98,317; 28 out of the 29 counties that have implemented a local option sales tax now have a higher millage rate than before the local option sales tax was increased; and, since passage of last year’s property tax relief bill, 21 schools districts across the state have announced millage hikes.

Local taxing entities (which include city government, county government and school districts) have undermined the intent of both the 1995 and 2006 property tax relief laws, resulting in an overall tax burden that South Carolina businesses and taxpayers cannot afford. Our tax burden has grown approximately 10% per year over the past decade and is now among the highest in the nation. This trend shows no signs of slowing down.

Too often, citizens do not realize just how much their tax burden is going up. Permit charges, fees and small millage hikes are done with little to no public scrutiny. But the result is that they are spending substantially more money on government than they used to, and they have less left over for themselves.

And it’s not just the individual taxpayer. Businesses are feeling the impact too. South Carolina businesses currently account for 45% of all state and local taxes collected. In contrast, businesses in our neighboring states of Georgia and North Carolina account for 36 and 39 percent respectively of total revenues generated for state and local governments. Coupled with the fact that last year’s property tax relief applies only to one’s primary residential home, it’s clear that South Carolina businesses need protection.

The Greenville News’ editorial also implies the House is being hypocritical, saying “state lawmakers do not arbitrarily limit their own spending,” and thus should not place such a restriction on local government. If they had done a bit more research on this issue, they would have seen that H 3295 is a bill that applies a similar cap on spending growth to state government. It has passed the House and new rests in the Senate Finance Committee.

Those of us who are trying to protect the taxpayers of South Carolina realize that controlling the growth of state government is just as essential as capping the out of control spending taking place on the local level. I’ve learned this firsthand, having spent over 23 years working with budgets as an administrator and consultant to local and county governments, and now as a legislator.

The Roman Emperor Tiberius Caesar is quoted as saying, “It is the duty of a good shepherd to shear his sheep, not to skin them.” These are both reasonable spending limit bills that will help ensure South Carolina taxpayers are sheared and not skinned. All taxpayers are offered protection, economic growth will be stimulated, and state and local governments still have the ability to increase their budget beyond the cap if needed.

Without these protective measures, we can expect more of the same – increased spending by government and less prosperity throughout our state.


Garry Smith represents House District 27 in Greenville County.