Thursday, January 07, 2010

S.C. Legislature - outlook for 2010 - Part 3

(See part 2 here - morning legislative panel on fiscal issues)

Luncheon remarks from the House speaker and Senate president pro tem:

House Speaker Bobby Harrell (Republican)

"We are queued up even in a bad economic year to do a lot of good things for the economy and the state even in a bad economic year."

Cites increasing reserve fund, lowering from 4% to 2% the trigger for budget cuts,

Expects when session is done people will say the Legislature accomplished things that are good for the state and economic development without raising taxes. Themes: Fiscal responsibility

Senate President Pro Tem Glenn McConnell (Republican)
"This state has got to be on a job hunt, not on a revenue hunt."
We're a trillion dollars into federal stimulus and says to both political parties in Washington he's seen nothing on a "dynamic energy policy." See gas price increases as not foreshadowing good economic things.

Revenue Stabilization Act, constitutional amendment:
"It will prevent a glut of spending" as we come out of the recession. Evens things out by putting restraints on spending and shifting money into reserve accounts in good years and then spending it out in bad ones.

Very high on the government streamlining commission. Make agencies go to zero-base budgeting, justify positions and funding. Also make sure Legislative Audit Council audits get implemented.

"I don't see it as being a menu of new taxes but a menu of what we can do without."

Refers to changes that drastically reduced governor's control of S.C. Ports Authority. "We got it back running like a business." Says economic development can't be a political football.

Revenue stabilization account: First 15% of revenue would go into the account to be spent back out in lean years. Can make government more efficient and leaner and smooth out budget process. Also expects this would lessen the number of governor's line-item vetoes.

Harrell: Supports it as a constitutional amendment and since the House has passed similar bills expects a proposal from the Senate to pass the House.

Had the stabilization act been enacted a decade ago, how would the budget be now?
Harrell: Probably similar, but you wouldn't have had the huge bubble of spending we had a few years ago, up about $900 million, but then followed by the $1 billion in cuts now.

Local governments say they have to raise taxes to the max under Act 388 or they can't go back and recover that money. Reaction?
Harrell: They didn't have to raise taxes. If they had raised taxes and put it in a secure account for a downturn, maybe they have an argument. But they did not; they spent it.

McConnell: "I am totally opposed to going back and repealing Act 388 as it applies to people's homes." Calls property taxes "paying rent to the government" for living in your home. Says it would become a "treasure chest" for government. He is willing to go back and look at any adjustments if there are problems.

Censure of Gov. Mark Sanford, how quickly House to take up?
Harrell: Like to see it come up next week. People "would like to see us move on" and then deal with jobs and the economy. Have a debate – all day and into night if needed – and dispose of it.
McConnell: If it comes over from the House, if even one senator objects it has to go to committee. By the time it comes back, we will be well into our work schedule. "So unless we can deal with it very quickly, to me it is just a waste of time." It doesn't change anything; it’s just an expression of opinion. Won't bring it to the floor unless he can be assured of quick debate and passage without numerous amendments.

Sen. Jake Knotts (a Sanford opponent) has suggested he might hold up the censure unless it is strengthened. Will that be a problem?
McConnell: Many of the issues Knotts wants, such as restrictions on use of state planes, may come up in other bills and contexts, so that may take care of itself.

What about the idea of a BRAC (base realignment commission) approach to reorganizing state government, where the recommendations of a commission are reported out as a whole and can't be amended or can only have limited amendments?
McConnell: Problem is twofold – unconstitutional delegation of legislative authority and that legislative rules supersede any law. So if the rules allow amendments, you can't deal that away with a law.

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