One more big hit to the state’s local government fund could mean greater property taxes or a cut in services in Aiken County.
That’s the message local officials are giving after the S.C. Senate decided to give more funds to 4-year-old kindergarten rather than local governments.
For decades, the state has allocated additional dollars to counties and municipalities through the local government fund, largely to help provide money for state-mandated services.
It’s been an important source of revenue, even with the reductions that have taken place in recent years.
The Senate’s decision isn’t wholly misguided. The diverted funds will help extend education opportunities for at-risk students.
But by reducing the funding, the legislature is, to a certain degree, violating its own law, although they’ve circumvented certain requirements by suspending elements of the law.
Aiken County Administrator Clay Killian told the Aiken Standard that if the Senate’s proposal comes to fruition in the state’s budget, the monetary constraints could mean pains for residents in the future.
“All they’re doing is forcing local governments into a pressure situation to possibly raise rates, like property taxes,” Killian said.
The S.C. House version of the budget does include the additional funding for local governments. The difference will likely come from budget negotiations when the House and Senate merge their budgets and work toward a compromise.
The Senate placed part of the local government funding essentially on a wish list – items that should receive priority funding if budget projections turn out to be brighter than expected.
Lawmakers are keeping their fingers crossed that state revenue projections go up and they can fund both 4K and local government somewhat appropriately, but there is no guarantee.
The General Assembly has actually explored a fluctuating fund in the past, and such a debate should perhaps re-emerge.
With state lawmakers continually tampering with the local government fund, it’s perhaps best if they remove the stipulation for a set allocation rate, which is currently in place.
By law, the state should pay 4.5 percent of its general fund revenue collections during the previous fiscal year to local governments. That hasn’t happened since the recession hit in 2008.
This year, local governments should get $287.5 million, but even if the Senate cut is restored, local governments will get only about $213 million.
A more flexible fund – one shaped by the health of the economy – may still hurt the pockets of local governments, but the legislature is already doing that by essentially not following state law.
At the very least, it would provide counties and municipalities with the head’s up they need to make the appropriate projections.
Local governments are already fighting to keep funding in place. Changing the fund could lessen frustration and get the state and local governments on the same page.