Caucus Report 9 – Limiting Government Growth

The following update is the official weekly report of the Republican House Caucus –

One of the core principles of the conservative philosophy I share with my constituents is that we should limit the size of government. That means letting people spend their own hard-earned dollars and ensuring government serves the people by getting out of our way.

As the House readies for the start of Budget Week on Monday, March 14, the House took a concrete step to ensure our state government doesn’t grow faster than your wallet. We passed key legislation limiting how much the state can spend.

This legislation still has a long way to go, especially considering that this is the eighth time the House Republicans have ushered such a bill through since 1994. None of them have ever made it out of the state Senate.

This bill is a critical part of our conservative commitment to restrain the growth of government in the face of a growing number of formulas that force spending.  If we don’t follow a path of fiscal responsibility when times are good, we will be much worse off when we have economic trouble. We are witnessing that right now as we are forced to slash budgets artificially inflated by tax revenues collected during good times.

The legislation passed this week uses February 15, 2010 as the base and restricts future growth to the LESSER of 6 percent growth, or population growth plus the Consumer Price Index (a common measure of inflation).  In addition, the bill allows the General Assembly to declare an emergency and suspend the restrictions with a vote of two-thirds of those present. According to the most recent report from the National Conference of State Legislatures, 30 states operate under spending or revenue limits.

The bill also creates a “Spending Limits Reserve Fund,” and requires funds in excess of the spending limit to be appropriated for replenishing the General Reserve Fund, temporary tax reductions, infrastructure, school buildings, school buses, and then expenses for natural disasters.

These spending limits are reasonable and give the General Assembly plenty of room to maneuver should there be a major crisis – like another Hurricane Hugo or terrorist attack – that would require us to marshal our state’s resources to respond.

But it also ensures that when state tax revenues start expanding again, it will either be refunded to the people who earned it, or pay for crucial infrastructure, education, and public safety projects that will help expand our economy.

As state tax revenues have fallen over the last several years, South Carolina has made a concerted effort to cut the size of government rather than increase taxes on citizens – as was done in several of our neighboring states. That process will continue next week as we debate the budget.

In future years, I hope these spending limits will ensure budget cuts will not be as severe as those we have witnessed over the past three years. The bill will arrive in the Senate next week.

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