I highly recommend Cindi’s column in The State today, which debunks the numbers the governor uses in arguing his quirky view of the stimulus, and does so in highly understandable (even for me) terms. A sample:
The governor’s other numbers aren’t quite as obviously skewed, which is why we need to take a closer look at them. Since Mr. Sanford consolidated most of his claims in a recent op-ed column, let’s just work from that:
• “Last year state government spent $19 billion, and this year we will spend $21 billion.”
The budget passed by the House, which includes all $928 million in stimulus funds, was $21.2 billion, but because of another across-the-board cut last month, it will have to be cut to $21.1 billion. If you left out the $350 million Mr. Sanford wants left out, you’d be down to $20.7 billion. That’s about $800 million more than the current budget of $19.9 billion, which has been cut many times, but it’s less than the $20.9 budget the Legislature passed last spring.
On top of that, more than a third of the money is federal funds, which agencies don’t have the discretion to divert the way they can state funds. And of course our population is increasing, which increases the demand for government services.
• “Even education spending will go from $3.3 billion to $3.5 billion.”
After I raised questions about the first figure, Mr. Sanford’s office sent out a note Tuesday saying it got bad figures from the State Budget Office and it should have said education spending will go from $3.43 billion to $3.55 billion. But even the “correct” numbers demand explanation. The budget passed by the House includes $3.8 billion in state and federal funding for the state Education Department; eliminate stimulus funds, and it drops to $3.55 billion. Last month’s budget cuts would reduce that figure to $3.5 billion. So, the increase would be $70 million, not $200 million.
Still, that is an increase. Sort of. Here’s where context is crucial: The budget the Legislature passed last spring promised $3.8 billion to the schools, so they started this school year thinking they had $3.8 billion to spend; they paid the raises the Legislature mandated, and kept their staff at the levels that would support. Then the state budget cuts started. Since schools were barred by law from laying off teachers or cutting their pay, they had to dip into their reserve funds. That means they will actually spend significantly more than $3.5 billion this year.
So getting $3.5 billion next year would be a reduction, and reductions mean layoffs. (At an average $61,000 in salary and benefits, a $100 million cut takes out more than 1,600 teachers.)…
But you should go read the whole thing. It’s all valuable.
There’s no journalist in South Carolina who understands, or explains, state fiscal matters better than Cindi. I’ve relied heavily on her ability to explain these things — to me, and to the readers — for over 20 years.
Related Posts
Only someone with Sanford Derangement Syndrome could read that excerpt and point a finger at Sanford.
Start with the Legislature’s “promised” $3.8 billion dollar budget for last year. Whose fault is it that the budget they promised was wrong? Whose fault is it that the schools spent all the money even when we all knew the economy was tanking right when the school year started? Any other real business that missed their budget by 20% would see people fired and laid off. Why should the government be immune from the economic reality? By what logic should the government not have to deal with downturns just like every other entity does?
Cindi also takes the easy way out with this statement: “So getting $3.5 billion next year would be a reduction, and reductions mean layoffs. ”
What she fails to consider is whether there are any places besides classroom teachers where cuts could be made. By falling for the scare tactic rhetoric, she proves her bias. Unless she has done a full examination of the Dept. of Education budget and declared it free from waste, saying layoffs are required demonstrates she was looking for numbers to prove her bias.
Why do we now have to log in with a password no one (or at least not me) can remember?
Well, Mrs. Scoppe finally is forced to admit the truth – there is no “budget crisis”.
Backed into a corner, she tries to shade the truth, which she was trying to conceal from her readers. Let me clear her smoke, in order to see the basic undisputed facts:
* The legislature, even after all its “budget cuts”, still plans to spend $800,000,000 more than it spent last year.
* Education spending is being increased, as it has been every year in her lifetime.
There is enough new money to hire 1,147 new teachers. The threats of teacher layoffs is a cruel hoax.
* The average “underpaid” teacher makes $61,000 for 180 days of work, which prorates out to $85,000 annually for a full-time worker.
* The cost of the stimulus to federal taxpayers is $8 billion.
Mrs. Scoppe doesn’t want to count anything but the $2.8 billion in direct cash to the state targeted to new programs.
* The state retirement fund which Governor Sanford wants to shore up with some of this money, has $9.3 billion less in reserves than it had last year, and is more rapidly approaching bankruptcy.
Well, I’m glad someone out there is fact-checking these two sides.
Good column.
Here’s some numbers for Cindi to ponder:
State Taxable Income State Income Tax Burden
Top 1% (Above $340,000) 24.8%
Top 5% (Above $93,000) 44.6%
Top 10% (Above $64,000) 60%
Top 25% (Above $30,000) 84.9%
Top 50% (Above $8,700) 97.8%
Half the wage earners in the state pay nearly all the income taxes. And just 5% of us pay 45% of the total!
Imagine a tax system where everybody contributed the same percentage of every dollar they made to the state rather than forcing those who are successful to carry the burden for those who are not.
http://www.scpolicycouncil.com/research-and-publications-/fact-sheets/456-who-pays-south-carolina-state-income-tax
In her editorial, Mrs. Scoppe admits that Sanford is telling the truth about the state having more money in this year’s budget than they spent last year, or any other year in history.
She admits that the schools are getting at least $70,000,000 more.
Exactly what excuse to Scoppe, Joe Darby, Hugh Leatherman, and every other spendthrift have for wanting to blow an extra $ 8 billion?
What’s really disturbing about the figures Doug cites is that 75% of our wage earners earn less than $30,000 a year and 50% make less than $8700 a year. It looks like we should be doing everything we can to create jobs and redistribute the tax burden.
SCnative:
I am a schoolteacher. I work far more than 180 days, although I concede that I have more days off than many workers. I am satisfied with my salary and benefits package. I neither ask for nor expect a raise during difficult economic periods, and I think many teachers feel the same way. I’d like to think that what I do is important enough that I can expect to have a job next year. Unfortunately, budget cuts in education often mean layoffs.
The $61,000 figure for teachers includes benefits. Yes, it’s real money that must be paid for through tax dollars, but using the salary + benefits figure to suggest teachers are overpaid is disingenuous. The actual average salary (not counting benefits) is in the neighborhood of $42,000 I think.
Norm,
That’s the income they report. The income tax system is easy to cheat for the self-employed and those who collect under the table. Those of us who follow the rules are paying for those who don’t.
Mr. Ivey,
Thank you for being honest about your job. All the teachers I know chose that work because they like it, including having the summers off with their children. Many of them quit higher-paying jobs that required 60-hour weeks and being on call from bosses.
But there are no “cuts in education”.
The Leatherman budget spends at least $70,000,000 on education than last year.
When are teachers and parents going to wise up and stand up to these politicians, from the superintendents to the legislators, who lie to them and sacrifice some of them to create fear so they can extort more money from the taxpayers than they need to run the schools?
Mr. Ross,
Contrary to the proganda from the IRS and Democratic Party, it is not businesses who cheat on taxes. Their money is all reported on 1099s and most is electronic, bank to bank.
There is huge contingent of the population who work and cheat on welfare benefits. These Obama voters are scam artists. Many of them receive coaching at their churches on how to game the system, in order to work a job while receiving free healthcare, Food Stamps, WIC, housing allowances, mortgages, etc. And they pay no income taxes, state or federal.
If everyone paid the same rate of taxes, Obama and Clyburn wouldn’t get 10% of the vote, because they would have no bribes to give away.
SCNative,
Sorry, I did not mean to imply that businesses cheat on taxes by saying the self-employed do. I was talking about that segment of society that floats beneath the rules that legitimate business owners follow. The ones who deal mainly in cash can find ways to both avoid paying taxes AND get government benefits.
Yes, you are correct – when the government teat is there to suck on, there are many who won’t ever be weaned. Why would they?
I know what kind of self-employed you are talking about, Doug.
Wetbacks working on fake SSN cards, doing landscaping.
People collecting unemployment checks and welfare while running yard work, painting and other labor businesses on the side.
Every ‘hood has unlicensed stores bootlegging candy, cigarettes, sodas and beer out of a house or two. You seen them in China Mart, loading up carts with the 1,000 pieces of candy and 400 popsicles.
Gee, I’ve been in each of the SC Policy Council’s 5 categories except the top 1%. I like being in the higher ones. It must be nice to be 1% and pay 24% of the taxes. That must be a ton of taxable income – even though the rate on all above about $13,000 is the same rate as the guy earning $50,000, and oh yeah, 44% of my capital gains was not taxed at all, and I paid the same sales tax on my Mercedes as he did on his used Chevy. And, of course, I work harder running my car dealership and my real estate company than he does up on that roof or driving that police car. I think I’ll just put the rest of my money away in a vault instead of investing it if I have to pay taxes on what my money earns for me. These low-income types have got the right idea – don’t earn much and take advantage of government assistance so you don’t have to be burdened with those awful income taxes.
Harry, you failed to pull of the sarcasm.
Try again, straight expository writing.