Shock absorber
Mechanism needed to absorb jolts of the legislative spending cycle
State Sen. Harvey Peeler is correct when he points out that the state needs a shock absorber to even out the jolts from poor spending decisions.
The senator’s metaphor describes the situation well. A shock absorber takes up some of the impact of holes in the road, evening out the ride of a car by limiting the up and down movement of the suspension.
South Carolina has been made car sick by the ups and downs of state spending and budget cuts. The cycle of legislative spending is clear. When the economy is growing, the General Assembly spends all the money it can, every dime that is forecast to come into the state’s coffers. Lawmakers give no thought to the inevitable economic downturn. For instance, last year, lawmakers spent more than $1 billion in revenue growth.
When the economy falls, the state cannot support the bloated budget lawmakers have created, and dramatic budget cuts are necessary. Because that $1 billion was spent last year, lawmakers had to cut the budget 7 percent this year.
There is nothing to soften this up and down cycle, but a cap on spending would limit the highs and lows, absorbing the shocks.
When lawmakers find themselves with millions in new money to spend, a limit would force them to put aside some of the money. This would restrain the growth of the state budget and give the state a cushion of savings with which to handle economic troubles.
The state’s budget would not rise so high in good times, and fewer cuts would be needed in a recession. For instance, if lawmakers had instituted a cap that was proposed in 2004, the state would be enjoying a $200 million surplus this year rather than calling an emergency session of the General Assembly to pass major budget cuts.
There are two major versions of the spending limit proposed. Gov. Mark Sanford advocates a limit based on the state’s population growth plus the inflation rate. The theory is that such a limit would not allow the budget to grow faster than the state.
Senate President Pro Tem Glenn McConnell proposes an alternate cap based on a 10-year average of state revenue increases. This would keep spending from outstripping the state’s income.
McConnell and other legislative leaders are recognizing the need to stop what he calls “the feast or famine budgeting cycle.” Lawmakers have proven that they cannot restrain themselves. They need an imposed limit on their spending. And citizens who fund and depend on state services need an end to this unstable cycle. Lawmakers should adopt one of these state spending caps.
Spartanburg Herald-Journal
October 28, 2008
