In the sake of clarity, The State‘s editorial Sunday about Nikki Haley’s “Let’s Make A Deal” proposal on paying for roads maybe what should have been an obvious point, although I had not yet thought of it this way:
WHEN MARK Sanford ran for governor in 2002, he proposed to increase our tax on gasoline and eliminate the state income tax. He didn’t claim it was a plan to save our roads. It was a plan to cut our taxes, plain and simple.
And that’s what Gov. Nikki Haley offered us in her State of the State address on Wednesday: a plan to cut taxes. Oh, she called it a plan to address what most businesses and lawmakers and many citizens consider our most urgent problem: our crumbling roads and bridges.
But it would cover barely a fifth of the need, and in reality it was just a warmed-over version of the Sanford plan. It should meet the same fate as the Sanford plan, which the Republican Legislature rejected, because lawmakers knew we could not afford a massive reduction in the money available to pay for schools and prisons and industrial recruitment and mental health and other basic services.
Gov. Haley did propose to spend the new gas tax revenue on roads: $3.5 billion over the next decade. But she also proposed to steal $8.5 billion from those core functions of government over that same period.
The governor says she’s making roads a priority (although really she’s making tax cuts the priority), and it’s true that we can fix a big problem in government by making it a priority. But if we aren’t careful, we create other problems, as we saw most recently with the cuts to our child-protection program that Gov. Haley now wants to reverse…
Yup. Instead of focusing on the problem under discussion, something of importance to everyone who cares about the state’s actual needs — the lack of funding for roads — the governor is really using that as a smokescreen to achieve an ideological goal that doesn’t address any actual problem.
That wasn’t fully clear to me until I saw the numbers: $3.5 billion for roads, but $8.5 billion for tax cuts…
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“that doesn’t address any actual problem.”
Except for that nagging little thing called waste.. and that other little problem called “government doing what it shouldn’t do”.
The 3.5 and 8.5 billion you speak of are over a decade. So a net difference of 500 million per year.. or about 5% of the total budget. If you think S.C.’s state government is working at such a high efficiency that 5% couldn’t be found, you’re in a tiny minority.
Anyway, that 500 million doesn’t disappear into thin air. It goes back into the pockets of the people who paid it in the first place so that it can be spent… which in turn results in tax revenues (sales and income).
So many weasel words in that editorial — I love the use of the word “steal” to describe giving money back to the people who provided it. And by “steal”, we’re talking about passing legislation by elected representatives to do that. ” That’s stealing. What that is is pure comedy gold.
Only to someone with your ideological prejudice.
I’m still waiting for you to itemize all that “waste” you think is there. I’m waiting for Nikki to do it, too. We have a perfectly reasonable income tax that in no way stands out as excessive. (Our sales taxes actually ARE high, by contrast, for instance.) So since there’s nothing wrong with the tax, it’s incumbent on her to demonstrate that the state doesn’t need the revenue.
During her administration, the actual problems that have jumped up to bite her — such as the excessive DSS caseloads, and the resultant deaths — have been matters of a LACK of state spending, not excess…
Give me a line item budget veto and I’ll cut 5% in a week.
What part of my argument is incorrect? Is it stealing to return tax dollars to those who pay them? Will the $500 million in cuts be offset by additional taxes gained from sales, income, and property taxes if that money is spent? The State editorial board always has trouble with simple math and economics.
If we return $500M to the taxpayers, I don’t see how that amount can be “offset by additional taxes gained.” Some portion of it would be paid in taxes elsewhere, but it’s impossible for ALL of it to be offset.
I didn’t say all would be. Some would be via direct spending… which has a multiplier effect. More spending would lead to more hiring which increases income tax revenues.
So we’re looking at somewhere between 0 and 5% cut across the board for state spending, with 5% being if every dollar returned to taxpayers was put in a jar under the bed or spent out of state.
It’s a fair trade for someone who is willing to compromise.
Brad, I’ll take the bait and start outlining “waste” or items in the state budget that should be cut before our taxes are increased one more cent.
Arts Commission
SCETV
State Library
Comm for Minority Affairs
Clemson Public Service Activities
SC State Public Service Activities
Just for starters.
All those, sure. Cut all TERI employees. Cut all expense reimbursements for legislators who live less than 100 miles from the State House. Cut legislative sessions to a few weeks per year. Eliminate all legislative activity related to naming objects and offering proclamations of congratulations. No money for museums or submarines.
Let’s see. We increase the tax on gas 10 cents. Any one who can’t afford the extra money will be unable to drive their cars, and quite possibly unable to go to work or hunt for a job. You know those poor people; they’ll waste their money on food and medical expenses before they make sure they have gas.
By the way, the programs that appear on ETV are paid for by donors. If ETV closed its doors the government would have to pay a great deal to have all the various things it wants filmed done. That is why despite all the fussing about it, it is not cut. To bad. Maybe we’ll have to continue having access to “Sesame Street” and “Downton Abbey.”
I’m sure I’ve said this before, but if a ten cent/gallon gas tax increase will break you, you probably don’t need any of the other expenses associated with car ownership either. In Columbia/Richland County at least, you can ride the bus, since I’m now paying extra for that privilege too. If we could take a few additonal cars off the road, let’s just say the “marginal” car-owners, just think how many roads would not need to be widened, how many traffic jams could be avoided, and how many bills the owners would save.
In fact, I KNOW I’ve called for it here before, but let’s just have a $1000/year car tax on every car, regardless of value that’s registered in the state. I’d still drive, but I’ll bet a bunch of people would decide not to. The additional funds coupled with the reduced traffic would go a long way to fixing our road problem.
Yikes! $1,000 a year a car!
And I thought Silence was the one who said Cindi and The State never saw a tax they didn’t like. The property tax on vehicles is one we’ve long held was too high in SC (while the SALES tax most people pay on cars is too low).
And wait — are both Silence AND Doug being apologists for a gas tax hike now? (Maybe I knew that, but had lost track of the fact.) If so, then all the political reluctance we see in the State House — including that from the governor — is even more groundless than I thought…
Although I like the rest of Silence’s plan:
Very Energy Party…
I think it would be nice to take all of the clunkers off the road, maybe get the number of people driving down by about 1/4, free up some room for those of us who would/could pay.
Or here’s another option for funding government: In exchange for paying higher fees, we should get better service. When I go to the DMV or wherever, they punch in my SSN or scan my ID, and then put me in line in front of all the people who pay less taxes than I do. Granted, Doug Ross would still be way ahead of me, but I’m sure I’d be ahead of 90% of the state. Sort of an express lane for services, or something like the FastPass or QuickQueue at an amusement park…
Thankfully, there are still enough of us out there who believe in the constitutional principle of equal treatment under law — and not the sort of class-based society you’re espousing. Though it does sometimes feel like an increasingly uphill battle.
M. Prince, I think you are confusing “equal treatment under the law” which is not guaranteed, with the Constitutional principle of “equal protection under the law” which is guaranteed under the 14th Amendment.
Ten cents a gallon is about $1.50 a week for most people. And that’s if you’re driving 300-400 miles a week. Not an issue.
Which is less than the discount PER GALLON that we’re getting on the price these days…
discount? You mean price fluctuation?
Yes. One of those price swings that are SO much bigger than any gas tax that any public body ever seriously considers, that it’s ridiculous to think that consumers would notice the tax increase.
Unless you want to go all crazy on it the way Charles Krauthammer and I want to. But that’s never been seriously considered, alas…
Again, everyone agrees that roads are a core function. Make that the first item in the budget. Boom. It’s paid for. Then figure out what you want to do next. Maybe that’s elementary and secondary education. Done. What’s next? Maybe Medicaid. Bam. What’s next?
Keep going until the budget is out of money. Then, when you want whatever is left over, convince me that we need to raise taxes to pay for it.
Saying that we need to raise taxes to fix our infrastructure kind of reminds me of the “Washington monuments strategy”, but on the state government level. The infrastructure obviously needs to be done. In fact, it needs to be done first.
What you’re proposing is a variant of what I’ve proposed for decades.
I say we should pretend we don’t have a state government. Then, our elected representatives should decide what the government needs to do, and figure out what it will cost to do those things. Then devise — also from scratch — a tax system that is balanced, adequate, reliable, fair and to the extent possible, economically harmless, and institute that.
But of course, we never do that. Lawmakers take the present system as a given, and make adjustments in taxation and spending based on who is yelling at them the loudest.
This is kind of scary. Everyone seems to be more or less in agreement. I would challenge Doug o his idea to cut all TERI employees. What if they’re valuable employees? Besides, the TERI program is going away. Why beat up on that any more?
I can only go by my experience with TERI people in the school system. They were seat fillers looking to maximize their earnings. One school principal didn’t even bother to learn all her teachers’ names.
You can’t blame the TERI employees for looking to maximize their earnings. Yes, it was a crummy program, but you can’t blame the employees for taking advantage of it!
I don’t blame them – except those who didn’t do their jobs well and should have retired. But the program should be eliminated.
As a retired state employee, I can tell you that the TERI program was well intentioned but poorly implemented. Yes, it is going away in another three years or so.
I think the concept of setting up a program to induce truly valuable employees near retirement to provide a transitional bridge for their replacements was a very good idea. Unfortunately, it quickly came to be considered a perk to be automatically granted to all near-retirement employees (no individual candidate value assessment required). The hiring agencies haven’t been paying much of the freight, anyway (letting the state retirement system bear the TERI cost), and simply using TERI to postpone the hassle of new hires. In my experience, rarely have TERI participants been called on to help prepare their replacements in any fashion.
With a Masters degree in human resources concepts and practices, that evolution of TERI irks me and I reluctantly supported its staged dissolution. I never sought TERI after 29+ years of state employment, as I didn’t want to be part of the problem as I saw it.
The intention WAS for it to be a tool to keep the most valuable employees from taking full retirement after the absurdly few years when that is available to state workers.
But then it turned out that legally (I don’t recall under what overriding law, perhaps under federal labor law), the state couldn’t pick and choose and only offer the benefit to the most valuable. They had to offer it to everybody.
At which point lawmakers should have immediately cancelled the program. But they lacked the nerve…
Aren’t some of the legislators doing the same thing? Senator Courson comes to mind.
He’s not a state employee. He’s in the insurance business.
But if you’re talking about the retirement benefits available to lawmakers, well, that sort of makes TERI look good by comparison.
Although… didn’t we just reform that somewhat? At this point, I would normally walk to the office next door to Cindi and ask her to remind me whether that’s the case, but it seems she’s not there now. Or rather, I’m not…
Are you saying that after 30 years, subsequently reduced to 28 about ten years ago, is “absurdly few years” to qualify for full retirement in an completely at-will employment situation where 0-3% cost-of-living annual increases, no merit raises and no longevity increases over a lifetime have been the norm? And the game has further been changed to ‘the rule of 90’, meaning a new hire can only collect full state retirement if the sum of the person’s age AND their years service total ≥ 90. Most of the private sector does better.
I doubt that you put up with those parameters over the course in your career in newspapers.
The change which applied TERI to all state workers was actually a state supreme court ruling, FWIW. Originally TERI only applied to schoolteachers.
Yes, that’s absurdly few years.
Certainly, it’s alien to my experience in the private sector.
Dave, I generally agree with your commentary. But on this I disagree. 28 years to retirement is absurd outside of the military – which should still be 30+ yrs.
I personally don’t see myself retiring at less than 45+ years. At 20 yrs most people are just beginning to learn what the flip is really going on in their business. Maybe after 38 yrs or so people are fading (but that is hardly a rule). Arrivederchi after 28 yrs is just irritating from a private sector perspective.
I have a relative who started working at his state job at age 22 and “retired” at age 50 with a great pension and benefits. Where else is that possible? I worked from age 17-35 at a company and have a pension I can’t touch until I’m 65.
In the military. But that, at least, makes some sense.
Certainly not in the newspaper business.
Meanwhile, the government is looking at trying to shift the military to 401k-type retirement…
http://online.wsj.com/articles/independent-panel-proposes-changes-to-military-pensions-1422408688
My ears are burning.
Whether the state retirement plan is absurd or not, it’s a benefit that we (state employees) have earned by the choices we’ve made in our careers. What I’ve passed up in income that I could have made in the private sector I’ve made up for in job security and benefits (health insurance and retirement, for example). That’s been a conscious recurring decision for both my wife and me.
Doug’s friend who retired at 50 and 28 years is probably not collecting full benefits. I’m pretty certain before the changes a couple years back that you had to be 55 to collect full benefits at 28 years.
Our benefits are set by the legislature, which is to say us, as in “all of us”. It’s not like we are just lucky or anything.
Norm,
My relative is not in SC. He’s in Massachusetts. Former prison guard. He’s getting a high percentage of his final salary plus medical benefits.
TERI’s gone now which makes state employment a bit less lucrative? This has the effect of reducing wages for everyone by making state government less of a threat to private companies. With state employment less attractive companies can likewise feel less pressure to offer good compensation. The capitalists win another round against labor and income gap widens.
Ah, yes, government employees have no option to seek those higher wages in the private sector. Why WOULD someone stay in a job that pays less if there were other options available? Civic duty? I think I can guess why.
I haven’t made my career decision based solely on the money I could have made. My wife and I (both RSD2 employees) have started these paths because of a wanting to help children (as a teacher and OT, respectively). We’ve both had opportunities to pursue more lucrative positions and careers, but we appreciate our state employee benefits, and most importantly, the additional time we’ve had to spend with our girls as they were growing up. It would be very hard for us to put a price on that.
Right, so when bud talks about the public sector jobs holding down wages and contributing to the mythical income equality, he’s neglecting to include all the benefits that come with public sector work: job security, pension, generous leave policies. Those are worth something that isn’t included in the basic income comparisons.
How often do you hear of a government employee being laid off? Firing takes a major offense. Geez, an administrator at an R2 school was recently caught in a compromising position with an employee in the school during school hours for the second time and he was allowed to move on quietly.
Actually, there ARE layoffs in the public sector. They call them “reductions in force,” or RIFs. I believe we had some during the recession years…
But to your point, if I were state employee, I’d probably be more worried about RIFs than being fired for cause….
I personally had to dismiss two employees several years ago. My boss fired at least one that I know of. So that makes 3.
As for the “lavish” pension, state employees pay into that, 8% currently. Also it takes 30 years for a full pension, up from 28. Yes. State workers do receive decent benefits but hardly lavish. No profit sharing. No Christmas bonus. Extremely small cost of living raises.
Bottom line: Doug has his facts wrong but that doesn’t stop him from giving state employees the middle finger.
Compared to the private sector – the SC benefits and pay package is actually pretty good. I worked for the state for a number of years, here’s a few things I noticed:
1) The SC health insurance options were not nearly as good as my counterparts in local government had, specifically Richland County employees. They have what I would describe as “Cadillac” health coverage.
2) There were a lot of energetic, intelligent hard-working folks in state government. There were also a lot who could best be described as “deadwood” who were just taking up space. I know that’s not unique to government, but definitely more than I’ve seen in industry.
3) Yes, the SCRS contribution rate is now at 8%, scheduled to increase to 8.16% this year. That’s still a lot lower than what would be required to achieve a comparable retirement in a defined contribution (401(k)-style) plan. For employees achieving a full retirement, it’s a very generous benefit.
4) The salaries aren’t significantly below what’s available in the local economy, especially given the hours.
5) RIF’s are few and far between, although the furloughs were pretty crummy.
6) What’s a cost of living raise? I think I’ve had exactly one of those since I left state employment. They are pretty rare lately all around.
All in all it’s not a bad place to work.