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Legislature Whacks City, County Funding Amid BudgetCrunch
BY NICK MCCORMACDuring economic hardships, drastic funding cuts are an unfortunate reality. But issuing acut so sweeping that it could eliminate all state-issued funding for local governmentsmight seem unnecessary.That is, unless you’re the South Carolina General Assembly, which recently spiked a 30-year-old law requiring a portion of state revenue to be distributed to municipal andcounty governments.Under the S.C. Code of Laws, 4.5 percent of the state’s tax collections goes to the LocalGovernment Fund, which is distributed to cities, towns and counties based on population.But that law has been suspended for the 2009-10 fiscal year that begins July 1.That means local governments will have to operate with $50 million less than theythought they would be getting from the state. While that is down from $121 million thatwas originally going to be cut, it’s still a big blow, and a $3.4 million hit coming toRichland County has contributed to a potential county tax increase.“Absolutely essential services — police, fire, ambulances, jails — are the things we’reexpected to support, so those will not be touched,” says County Councilman Greg Pearce,a Republican representing District 6.And beyond that?“Everything else, unfortunately, is fair game,” Pearce says.To soften the blow, Richland plans to tap $3.1 million of its $38 million in reserve fundsto help balance its 2009-10 budget, but only as a temporary umbrella.“That money is good for a rainy day, but we’re in the middle of a tsunami,” Pearce says.County Council also is considering a property tax increase. The amount would varydepending on where Richland residents live and which services they use, averagingalmost 5 percent or roughly $11 on a $100,000 home.Furloughing county employees is not on deck yet, says County Administrator MiltonPope, but pay increases for employees will be put on hold.The suspension of the Local Government Fund law only applies to next fiscal year, butwhether it will stay in effect beyond that remains to be seen, says Casey Fields of theMunicipal Association of South Carolina.“It was put in place so the General Assembly could balance the budget, and reinstitutingit will be judged on what is best for residents and [local governments],” says Fields,municipal advocacy manager for the association.
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