Now it’s up to South Carolina’s legislators to decide how to spend federal stimulus money.
Gov. Mark Sanford decided he won’t take it Friday after failing to persuade President Obama to let him use $700 million of the state’s share to pay down debt.
Key legislators were quick to respond with assurances that they plan to spend it. Congress told states to either use the money or lose it, but either way, taxpayers here are on the hook to pay it back.
Polish the pitchfork, fire up the torches, and join the revolt preparing to storm the Bastille.
That’s the impression from several corners of the state about the public’s mood. Voters already steamed about the recession, rising unemployment and corporate bailouts are growing angry about taxes, too.
News that one in 10 Georgia lawmakers is a repeat violator of tax laws has fueled a call for a rewrite of the state’s tax code. And it’s not just conservatives who feel that way.
When a series of President Barack Obama’s appointees to senior posts revealed they hadn’t paid their taxes, the anger grew. When the Georgia Department of Revenue distributed a list of outstanding taxes owed by 19 unnamed legislators, frustration boiled further.
This underlines once again the need for massive tax simplification. Read it all.
The plan that Gov. Arnold Schwarzenegger and lawmakers approved last month to fill California’s giant budget hole has already fallen out of balance with a projected $8-billion shortfall, the Legislature’s nonpartisan budget analyst said Friday.
After analyzing recent data showing rapidly rising unemployment and lower-than-expected economic growth, Legislative Analyst Mac Taylor said the state is on track to have even less money than lawmakers anticipated in February.
South Carolina will soon get $75 million in extra money from earmarks in the $410 billion spending bill that President Barack Obama signed this week. Among the extra federal spending for the state is money for educating seafood lovers about the dangers of eating raw oysters, an oaktree-planting bonanza and a robotics training center in Union.
U.S. House Majority Whip Jim Clyburn boasts of his role in bringing nearly half of that money home to the state to provide for improvements and economic development. He’s responsible for $35 million of the total.
Meanwhile, another member of the state’s congressional delegation, Sen. Jim DeMint, is on a crusade against the deficit spending and corruption that he argues is caused by earmarks, including ones going to other states for tattoo removal, pig stench and midnight basketball.
As high school hallways and the entertainment press are abuzz about the alleged beating of pop star Rihanna at the hands of her pop star boyfriend, Chris Brown, some state lawmakers plan to send a message that dating violence is never acceptable.
Wednesday, a committee of senators approved a bill requiring the state Department of Education to train school personnel and students to recognize the signs of abusive relationships.
“A lot of young people have no idea what is the appropriate response to dating violence,” said Sen. Phil Leventis, D-Sumter, who is the chief sponsor of the Senate bill. “They sure wouldn’t be able to figure it out by the media and what they see on television.”
The scenes here are now familiar in places deeply bruised by the recession: The Salvation Army gets so many calls from people desperate for help with overdue utility bills that, one morning, its phone system crashed. The Family Service Center of South Carolina is deluged with clients seeking free counseling for delinquent mortgages. And the shelves at the Life Force food pantry run out of rice, canned stew meat and black-eyed peas in less than an hour.
Yet in few places is the nonprofit sphere being tested as profoundly as in this Southern city — the capital of a state where, figures released yesterday show, the unemployment rate is now the second worst in the nation and conservative political leaders believe that charities, and not the government, should bear primary responsibility for people in need.
Gov. Mark Sanford (R) eschews the prevailing view in Washington that government money should be used as a salve to the economy and to people who have lost jobs. “At some level, government steps in to fill the void,” Sanford said in an interview, “but we ought to be the lender of last resort, not the first.”
Sanford and the Republican-led General Assembly have cut the state’s budget three times since last summer by a total of $871 million, or 13 percent — among the deepest reductions in the nation.
For a ballroom full of downhearted conservatives desperate for some good news, Mark Sanford had an odd message.
The South Carolina governor urged 1,000 activists, gathered in late February at the Ronald Reagan Banquet in a fancy Washington hotel, to be prepared to lose, and to feel happy about it ”” to “be happy warriors,” as he put it.
“Would you be willing to support a cause or a candidate that is likely to lose?” Sanford asked conventioneers at the Conservative Political Action Committee’s annual gathering.
Too much focus on winning, Sanford said, leads to compromise and the abandonment of conservative principles.
As the diners leapt to their feet and applauded, Sanford declared:
“The name of the game is staying true to the principles that got you into politics in the first place ”” and letting the chips fall where they may.”
Over the past three months, Sanford’s criticism of President Barack Obama’s $787 billion economic-stimulus plan has transformed him from a conservative Republican governor little-known outside South Carolina to a political powerhouse with a growing profile among party stalwarts nationwide.
In his 11 years in the Washington Legislature, Representative Mark Miloscia says he has supported all manner of methods to fill the state’s coffers, including increasing fees on property owners to help the homeless and taxes on alcohol and cigarettes, most of which, he said, passed “without a peep.”
And so it was last month that Mr. Miloscia, a Democrat, decided he might try to “find a new tax source” ”” pornography.
The response, however, was a turn-off.
“People came down on me like a ton of bricks,” said Mr. Miloscia, who proposed an 18.5 percent sales tax on items like sex toys and adult magazines. “I didn’t quite understand. Apparently porn is right up there with Mom and apple pie.”
Mr. Miloscia’s proposal died at the committee level, but he is far from the only legislator floating unorthodox ideas as more than two-thirds of the states face budget shortfalls.
Smoke weed — help the state?
Marijuana would be sold and taxed openly in California to adults 21 and older if legislation proposed this week is signed into law.
California Assemblyman Tom Ammiano, a San Francisco Democrat, said his bill could generate big bucks for a cash-starved state while freeing law enforcement agencies to focus on worse crimes.
“I think there’s a mentality throughout the state and the country that this isn’t the highest priority — and that maybe we should start to reassess,” he said.
$10 fee proposed for filing state tax returns. Unbelievable!
The historically more conscientious, deliberative Senate must rescue consumers from a flimsy payday lending bill hastily passed by the House that would solidify payday lenders’ grip on our state.
The House bill would do nothing to stop payday lenders from making repeated loans to borrowers at triple-digit interest rates. It’s up to senators to push for strong protections that help keep consumers from drowning in a long-term cycle of debt.
The best remedy is to ban payday lending, but many lawmakers oppose that. Fine: Then regulate the industry tightly so it does what it continually alleges is its aim ”” to provide short-term, emergency loans. That shouldn’t be hard for the Senate. It passed strong legislation last session to do just that, only to have Speaker Bobby Harrell, who authored the industry-friendly legislation the House passed last week, sabotage it.
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The House’s payday lender-friendly bill would limit the number of loans a consumer can get to one at a time and require a database be used to enforce the limit. But it also would double the maximum amount of a loan, from $300 to $600.
Income tax refunds and state employee paychecks could be late after Republican leaders and the Democratic governor clashed Monday over how to solve a cash-flow problem.
Payments to Medicaid providers and schools also could be delayed.
“We are out of cash, in essence,” state budget director Duane Goossen said.
California legislators tried and failed for a second day Sunday to close a $40 billion hole in the state’s budget, still one Republican vote short of approving a package that contains $14.3 billion in tax increases.
State Sen. Abel Maldonado, a moderate Republican from Santa Maria, indicated in an interview with The Bee that he was willing to consider casting the decisive vote if he was satisfied with the final version of the tax proposal.
“I’m very concerned with the tax package,” said Maldonado, who early Sunday had been quoted as saying he was adamantly opposed to the tax hikes. “We’re still working on that. Everything’s fluid. I don’t like tax increases. ”¦ let me just work on the tax issue. I’m working on that. I don’t want my state to go off the cliff, OK? I don’t want that.”
First, I don’t believe it will work.
Historically, simply throwing government money at a struggling economy hasn’t created growth. It certainly didn’t in Japan during the 1990s, when the Japanese government initiated no fewer than 10 stimulus packages over eight years. Instead of fortifying the economy, government intervention led to what is often referred to as “the lost decade,” a time when Japan’s unemployment rate more than doubled.
Supporters of the current plan like to point to the New Deal as a model, declaring that FDR’s massive government expenditures dragged this country out of the Great Depression. But the data points just don’t back that up. The Depression kicked off with the stock market crash of 1929. Ten years and billions of taxpayer dollars later, unemployment was stuck at 20 percent.
You don’t have to believe me. Believe Henry Morganthau, President Roosevelt’s own treasury secretary, who said the following: “We have tried spending money. We are spending more than we have ever spent before and it does not work…. I say after eight years of this Administration we have just as much unemployment as when we started…. And an enormous debt to boot!”
This brings us to a second point: the debilitating cost of this package.
As legislative leaders Tuesday moved toward a deal that could wipe out the state’s $42-billion deficit with temporary tax hikes on retail sales, cars, gasoline and millionaires, Gov. Arnold Schwarzenegger threatened to lay off as many as 10,000 state employees if a new budget is not passed this week.
State workers will begin receiving pink slips Friday, absent a fiscal agreement by then, administration officials said. The layoff process generally takes about six months for state employees due to union rules and other considerations, such as bureaucratic procedures the state must follow. The move would save the state $750 million annually if the jobs are eliminated by July 1, according to Aaron McLear, Schwarzenegger’s spokesman.
“This is not a [negotiating] tactic,” McLear said. “This is simply out of necessity. The state is running out of money. The governor has very few options at his disposal that he can unilaterally use to cut back on state spending.”
A panel of three federal judges, saying overcrowding in state prisons has deprived inmates of their right to adequate healthcare, tentatively ruled Monday that the state must reduce the population in those lockups by as many as 57,000 people.
The judges issued the decisionafter a trial in two long-running cases brought by inmates to protest the state of medical and mental healthcare in the prisons.
Although their order is not final, U.S. District Court Judges Thelton Henderson and Lawrence Karlton and 9th U.S. Circuit Court of Appeals Judge Stephen Reinhardt effectively told the state that it had lost the trial and would have to make dramatic changes in its prisons unless it could reach a settlement with inmates’ lawyers.
According to recent surveys, serious proposals to seek revenue from new or expanded gambling operations are percolating this winter in at least a third of the states.
There’s just one problem: The most recent evidence says the promised riches won’t materialize. A few examples:
”¢ Kansas authorized state casinos in 2007 on the notion that $200 million could be raised each year for debt reduction, capital improvements and property tax relief. Nearly two years later, private casino developers have pulled out of three of the four proposed casino sites, fearing that there’s little money to be made in today’s down economy.
This isn’t the primary reason to oppose it, but it is yet another one. Read it all.
A tell-tale sign America’s chips are down: States are increasingly turning to gambling to plug budget holes.
Proposals to allow or expand slots or casinos are percolating in at least 14 states, tempting legislators and governors at a time when many must decide between cutting services and raising taxes.
Gambling has hard-core detractors in every state, but when the budget-balancing alternatives lawmakers must consider include reducing education funding or lifting sales taxes, resistance is easier to overcome, political analysts said.
“Who wouldn’t be interested if you’re a politician who needs to fund programs?” said Bo Bernhard, director of research at the International Gaming Institute at the University of Nevada, Las Vegas ”” a government-funded program.
Like thousands of other Californians, Marcus Sanders would like a tax refund to help his family as recession tightens its grip on the economy and while he looks for full-time work.
When California’s state government will release its refunds, however, is uncertain.
The payments were due to start on Monday but State Controller John Chiang has said he will hold back the refunds for at least 30 days because the state must close a $15 billion shortfall in its current budget and needs its dwindling cash for more pressing payments, including debt service.
When Christian Herter was governor of Massachusetts in the 1950’s, he was running hard for a second term in office. One day, after a busy morning chasing votes (and no lunch) he arrived at a church barbecue. It was late afternoon and Herter was very hungry. As Herter went down the serving line, he held out his plate to the woman serving chicken. She put a piece on his plate and turned to the next person in line.
“Excuse me,” Governor Herter said, “do you mind if I have another piece of chicken?”
“Sorry,” the woman told him. “I’m supposed to give one piece of chicken to each person.”
“But I’m famished,” the governor said.
“Sorry,” the woman said again. “Only one to a customer.”
Governor Herter, who would later serve as secretary of state and be awarded the Presidential Medal of Freedom, was a modest and unassuming man, but he decided that this time he would throw a little weight around.
“Do you know who I am?” he said. “I am the governor of this state.”
“Do you know who I am?” the woman said. “I’m the lady in charge of the chicken. Move along, mister.”
–Also quoted in this morning’s sermon
State workers will be taking two days off a month without pay after a judge sides with Governor Arnold Schwarzenegger.
A Sacramento County judge ruled Schwarzenegger had the authority to put furloughs in place.
State employee unions call the decision “devastating.”
He was railing about Sam Adams, who three weeks ago became Portland’s first openly gay mayor, thanks, in part, to people like Mr. Wood, a 46-year-old environmental lawyer who voted for Mr. Adams last year.
In a city that likes to be liberal, Mr. Adams’s homosexuality was rarely an issue in his campaign for mayor. (One city commissioner said it was more of an asset than a liability.) Mr. Adams, who won 59 percent of the vote, has been admired for his youthful energy and plans to expand and promote Portland’s progressive and green identity.
Now, however, Mr. Wood is among a loud new constituency saying that the mayor’s tenure should end immediately. A state investigation is pending. Newspapers and the local police union have called for him to step down, while some elected officials and other community leaders have urged him to stay in office. Debate has erupted in the city’s gay population.
Mr. Adams, 45, has considered resigning, even though supporters who have spoken with him recently say they believe he will decide to keep his office.
The developments stem from the mayor’s admission this week that in 2005, when he was a city commissioner, he had a sexual relationship with an 18-year-old male intern at the State Legislature and that he had lied repeatedly about the relationship when he ran for mayor. His admission followed new scrutiny of the relationship by an alternative newspaper, Willamette Week. The mayor has not returned to City Hall since the admission, on Tuesday.
I will take comments on this submitted by email only to at KSHarmon[at]mindspring[dot]com.
As the city of Springfield addresses a $200 million shortfall in the Police and Fire Pension Fund, officials might look to similar situations across the country for inspiration.
From Pennsylvania to California and at points in between, municipalities facing shortages in their own pension plans have found various solutions.
In Joplin and St. Louis, city leaders have handled their own fund shortages through benefit changes and new sales taxes, respectively. The financial situation in Vallejo, Calif., meanwhile, led that city to file for bankruptcy last year; the city’s pension was listed as the largest creditor on its bankruptcy filing, accounting for $219 million in liabilities.
The Wall Street Journal printed an interesting piece Tuesday titled “Freedom is Still the Winning Formula,” which summed up the findings of this year’s index of economic freedom. It turns out that there’s an amazing correlation between economic freedom and national income, as the freest enjoy per capita income over 10 times higher than those countries that are viewed as repressed.
Hong Kong took the top spot for the 15th year in a row, and its successes in growing an economy ”” though it isn’t blessed with natural resources ”” should serve as an example for those of us who would like to grow jobs and economic opportunity in our state.
This is particularly the case given the trying economic times, as they could well be the tipping point in facilitating change that I believe has been long overdue in South Carolina. All of this is a long preamble to saying that the five goals I laid out in the State of the State Wednesday night are ultimately about making our economy more competitive ”” and recognizing that if there was ever a year to make change, this is the year. Rather than waiting on a bailout from Washington to stimulate our economy, we propose following the Hong Kong example of both low and flat taxes.
State Controller John Chiang announced today that his office would suspend tax refunds, welfare checks, student grants and other payments owed to Californians starting Feb. 1, as a result of the state’s cash crisis.
Chiang said he had no choice but to stop making some $3.7 billion in payments in the absence of action by the governor and lawmakers to close the state’s nearly $42-billion budget deficit. More than half of those payments are tax refunds.
With all that being said – the state of our state is that we have both enormous challenges and opportunities before us. They will necessitate us doing what was suggested in a recent email that came my way that said simply, “We have to be doing things we should have been doing a long time ago.“ My question to every one of you is indeed can we make this the year that we make the changes that we should have begun long ago. We
can’t do anything about the “long ago,“ but we can do something about bringing change this year. In Washington it was that spirit that in part gave us a new administration. We all saw a campaign based on the concepts of change and the resounding theme of “yes, we can.“ As an American I would wish the new administration success in deliberately working through many of the challenges facing this country, but as a South Carolinian I would simply ask that we take up the same mantle of “yes, yes we can” in overcoming so many of our state’s challenges.
Can we commit to the notion of “yes, we can” on just a couple of things this year key to bettering the lives of so many here in South Carolina? Because after all it was this thinking of “yes, we can” that led to the shattering of a glass ceiling that has hung over our nation for the last 200 years. Given this example alone, can we break the glass ceiling of an outdated governmental structure that has hurt the people of our state for more than 100 years?
As of June 30, Kentucky’s largest fund for state workers held about 52 percent of the assets needed to pay current and future benefits to its 117,000 members.