South Carolina comptroller general Richard Eckstrom closed the books on the 2018-2019 fiscal year in the Palmetto State earlier this week – declaring a surplus of $350 million.
Is that a lot of money? Eh … out of a state budget that topped $30 billion (including more than $1 billion in new spending), not really.
Also, state lawmakers are blowing even more cash in the current budget (including revenue generated from new tax hikes).
Is this ongoing spending surge improving outcomes for Palmetto State residents?
Don’t be silly …
For decades, Republicans and Democrats have pumped billions of dollars in new money into state government’s antiquated, inefficient, corrupt, duplicative and (often) totally superfluous bureaucracies … with more expensive failure being the only thing to show for it.
Despite massive influxes of revenue, things continue to get worse economically (see here and here), not better.
Same goes for government outcomes.
Schools … roads … you name it.
Worse, not better.
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(Via: FITSNews)
Oh, and the biggest tax hike of all is tied to the soaring cost of government pensions. which is where Eckstrom wants to devote the $350 million surplus.
“While this year’s $350 million surplus is certainly great news, we’d be foolish to once again miss this opportunity to apply some of it toward our unfunded pension liabilities,” Eckstrom said in a statement announcing the windfall.
Do we concur with his recommendation? No …
We believe every penny of this $350 million should be devoted to tax relief – specifically reductions in the state’s top marginal income tax rate, which is the eleventh highest rate in the nation and the highest rate in the southeast. Also, this rate kicks in on all income above $14,860 – making it incredibly regressive.
Oh, and don’t buy the liberal spin that South Carolinians have a “low tax burden.” Yes, Palmetto State citizens pay a lower dollar amount when compared to residents of most other states – but that is because their income levels consistently rank at the bottom of the national barrel.
In other words, their taxes are low because they are broke …
And don’t get us started on where recent income gains in the Palmetto State have been concentrated … because it sure as hell has not been the 99 percent.
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(Via: Travis Bell Photography)
In the hopes of stimulating middle class income growth, expanding small business investment and facilitating renewed consumerism in South Carolina we believe individual income tax relief should be made permanent – but we know state lawmakers are never going to go for that.
How do we know? Well, out of last year’s $30 billion budget, an anemic $61 million was devoted to tax relief.
That is a rounding error, people.
And while $350 million would mark a vast improvement, even this amount is unlikely to move the needle in reviving South Carolina’s flagging economic fortunes.
Still, it would be a start. As we have often argued regarding surpluses, investing this money in the economy as opposed to letting it disappear into the black hole of mindless government growth at least gives it a chance to do some good.
Because we know exactly what will happen if lawmakers get hold of it …
-FITSNews
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