Gov. Mark Sanford today announced his decision to veto 107 line-items and provisos in the legislative budget, including the entire section of the budget depending on Medicaid money that may or may not come from Washington D.C. The Governor's vetoes were made after productive meetings with legislative leaders and a growing recognition that tough budget decisions must be made this year, and not pushed off until next year.
"The fact remains that while this year may be difficult from a budget standpoint," Gov. Sanford said, "next year will be cataclysmic. With the Obama Administration's stimulus funds running dry next summer, South Carolina will be forced off a one billion dollar budget cliff at the very time the state and nation's economy struggles to regain its footing.
"Yet I believe that in this approaching financial crisis there lies opportunity. So while the current budget represents an indeed devastating reality for state agencies and those most served by government, there is also a unique opportunity to reorder our state's budget priorities and restructure government, if we adhere to three basic principles.
"First, stop spending money we don't have. Last year's so-called stimulus bill borrowed taxpayers' money to fix a problem created by too much borrowing, and this year's state budget perpetuated that mistake by spending $200 million in Medicaid dollars from Washington, D.C. that Congress has not even passed yet. We're refusing to sign off on this $200 million today because it's financially reckless to balance a budget based on merely the hope of Congressional action. We said as much in a letter to legislators three months ago: "this budget simply spends money that we don't have We believe a more fiscally prudent step would be to set aside [$200] million to help alleviate the pain caused by the loss of $1 billion in stimulus funds next year."
"I'd give real credit to many in the House and Senate who now agree that caution is the better part of valor with regard to the budget, and that our state absolutely needs this $200 million cushion going into next year. Setting aside this $200 million will effectively reduce next year's budget shortfall from roughly $1 billion to a still challenging $800 million. And by making this fiscally sound decision that will ultimately benefit taxpayers, South Carolina will join Republican and Democratic states alike -- including Delaware, Indiana, Louisiana, Nebraska, Virginia, West Virginia and Wyoming -- who have not included this speculative Medicaid money from Washington D.C. in their budgets.
"Second, not making the hard choices now makes them that much harder the next time around. The roughly $100 million in line-item and proviso vetoes this year represent exceedingly difficult choices, whether they are areas our administration has targeted in past Executive Budgets, or areas where legislative leaders have identified potential savings. But it must not be forgotten that this year's decreases will be miniscule compared to forced cuts next year when the budget faces a billion dollar hole and whole state agencies may in fact have to be zeroed out.
"Finally, I'd recall Benjamin Franklin's revolutionary warning that if we don't hang together, we're bound to hang separately. That is why I'd be remiss if I didn't thank legislative leadership and commonsense members of the House and Senate for sitting down with me and my team over the past few weeks and coming to an understanding with regard to our administration's ongoing concerns about the state's budget. For too long the budget process in South Carolina has resembled a choose-your-own-adventure book with budget-writers deciding every time to spend every dime sent to Columbia by the state's taxpayers. Today marks a welcome shift in that attitude, and I'd encourage legislators to both store up reserves for what will be a devastating budget next year and finally agree that state government cannot grow faster than the underlying economy."
Governor Sanford has vetoed 107 line-items and budget provisos totaling just over $100 million dollars, as well as "Part Four' of the budget in its entirety, totaling another $214 million. The General Assembly will take up these vetoes -- which, along with the Governor's budget veto letter, are online at scgovernor.com -- when it convenes next week.