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Legislature Whacks City, County Funding Amid Budget

Crunch
BY NICK MCCORMAC
During economic hardships, drastic funding cuts are an unfortunate reality. But issuing a
cut so sweeping that it could eliminate all state-issued funding for local governments
might 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 and
county governments.
Under the S.C. Code of Laws, 4.5 percent of the state’s tax collections goes to the Local
Government 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 they
thought they would be getting from the state. While that is down from $121 million that
was originally going to be cut, it’s still a big blow, and a $3.4 million hit coming to
Richland County has contributed to a potential county tax increase.
“Absolutely essential services — police, fire, ambulances, jails — are the things we’re
expected 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 funds
to 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 vary
depending on where Richland residents live and which services they use, averaging
almost 5 percent or roughly $11 on a $100,000 home.
Furloughing county employees is not on deck yet, says County Administrator Milton
Pope, but pay increases for employees will be put on hold.
The suspension of the Local Government Fund law only applies to next fiscal year, but
whether it will stay in effect beyond that remains to be seen, says Casey Fields of the
Municipal Association of South Carolina.
“It was put in place so the General Assembly could balance the budget, and reinstituting
it will be judged on what is best for residents and [local governments],” says Fields,
municipal advocacy manager for the association.
State Rep. Dan Cooper, R-Anderson, sponsored a bill that suspended the law and doesn’t
see what all the fuss is about.
“Local governments have to take their fair share of the pain,” Cooper says, “and I don’t
see why they shouldn’t.” He says state agencies have taken a 20 percent funding cut this
year while barely any reductions were made to supporting local governments.
While the state action might be temporary, Pope says he fears that it could be repeated.
“Anytime the General Assembly makes cuts like this, it sets a dangerous precedent for
what they might do next year should the economic crisis continue,” Pope says.
Cooper’s advice? Deal with it.
“My responsibilities are to state government operations, not to Richland or any other
county in the state,” he says.
But while Cooper and the rest of the Legislature might feel less of an obligation to help
the state’s local governments, municipal and county constituents have been dealt a
decisive blow.