Objective

To ensure efficiency, accountability and wise spending practices by restructuring key areas of state government.

Background

Restructuring state government is an often discussed legislative agenda item in the South Carolina General Assembly. In 1993, Governor Carroll Campbell was successful in achieving a major restructuring initiative, and the time has come for a similar approach to statewide spending and offices.

Situation

South Carolina has seen a nearly $3 billion drop in state revenues over the last five years. Since then, the state weathered three consecutive years of negative revenue growth. Negative revenue growth in consecutive fiscal years has only occurred two other times since 1953. As the state recovers from the economic downturn, it is vital to adopt certain measures for the long-term sustainability of state services.

In 2007, the General Assembly grappled with a restructuring bill that would allow voters to decide if constitutional officers should be appointed instead of elected. Then in 2008, government restructuring legislation that would have transferred daily functions of state government into a Department of Administration (DOA), making the governor’s office more accountable for day-to-day operations of state government, was discussed but not achieved.

Mid-year cuts have placed strains on government services. These cuts negatively impact the business community. Some examples are the reduction in education funding, processing of permits and delays in infrastructure projects. Many businesses fear these strains will force the General Assembly to rely on businesses to pick up additional costs. Therefore, the South Carolina Chamber of Commerce must call for a revived look at how revenue forecasting and budgeting is performed at the state level.

The state retirement system’s unfunded liability has grown exponentially since the beginning of the decade. In the early 2000s, the unfunded liability was several hundred million dollars. In 2011, that amount has ballooned to more than $17 billion. Because of the growing unfunded liability, local and state tax dollars are being diverted away from key business spending measures like education and infrastructure to keep pace with growing interest payments.

In addition, to ensure efficiency and effectiveness in government, certain constitutional offices should be consolidated into the gubernatorial cabinet.