Memo on State Infrastructure and the Local Government Fund
The Board of Directors of the South Carolina Association of Counties sent the following communication in regard to state infrastructure needs and the Local Government Fund to the Honorable Governor Nikki Haley and members of the South Carolina General Assembly:
The South Carolina Association of Counties completed its Legislative Policy Development Process for the 2015 legislative session on December 5. Although a complete publication containing our policy positions is forthcoming, it is imperative SCAC address two issues prior to the convening of the 121st General Assembly. The significance of State infrastructure needs and the Local Government Fund to the people of South Carolina cannot be overstated, and we believe must be resolved in a way that benefits our citizenry, and not in a manner that merely represents delay or expediency.
State Infrastructure Needs
SCAC opposes any legislative efforts to transfer roads from SCDOT to local governments. This legislative position is not born out of caprice, but rather arises from a thoughtful consideration of what is best for South Carolina. A resolution adopted by the SCAC Board of Directors regarding the transfer of roads to local governments is available here.
For over 50 years the General Assembly adopted an approach to state infrastructure which included the intake of secondary roads into the state highway system. It is estimated that the percentage of secondary roads in good condition is as low as 10 percent. Counties do not have the financial resources to fund the necessary maintenance costs on the roads within the state system. Recently passed legislation limiting local government's ability to raise revenue, and a failure to receive statutory state-shared revenues have strangled the financial ability for counties to provide minimal services for their constituents. Adding the secondary highway system as a burden on county government and county taxpayers will ensure the financial collapse of many local governments. Many counties, especially rural counties, have neither the residential nor commercial tax base to assume the perpetual maintenance cost of roads, even if given a new source of revenue. Furthermore, the state has failed to establish that even if given the financial resources in one fiscal year, that counties would be able to rely on continued financial resources for the next. Absent a constitutional amendment, no revenue source is safe from the whimsy of a future General Assembly.
SCAC is ready and willing to assist the General Assembly regarding any issue. However, Article III, Section I of the South Carolina Constitution clearly grants the legislative power of the State to the General Assembly. SCAC believes in the plenary power of the General Assembly in all statewide issues and the county officials in this state will not intrude on that power. Devolution would merely cloak as local an issue which is obviously one of overarching concern. South Carolina’s infrastructure needs represents a statewide concern and should be tackled in a fashion which benefits the state in its entirety.
Local Government Fund
Fiscal year 2014-15 represents the 7th consecutive year the LGF has not been fully funded. In order to fully apprise the membership regarding the background and use of this important resource we have included a copy of The History of the Local Government Fund and the Executive Summary of The Fiscal Impact of Selected State Mandates on County Governments, a joint project by Francis Marion University, Clemson University, and the University of South Carolina.
Full statutory funding this year would require an increase of around $90 million dollars. This amount is a result of the failure to fully fund the LGF in previous years combined with the significant increase in General Fund revenue. State revenues this year are projected to eclipse the General Fund Revenues collected prior to the Great Recession. Now is the time to renew this tax relief to your constituents.
SCAC supports funding of the Local Government Fund in accordance with statutory law. In order to achieve restoration of this important source of property tax relief for our citizens, SCAC supports legislation that would achieve a phased-in full funding of the Local Government Fund within three years.
Taxpayers dollars are sent to the state and deposited into the General Fund. The LGF represents some of that revenue being sent back to the locality from which it originated. If the money is not sent back, then counties must either raise taxes or cut services. This is why a failure to fund the LGF is detrimental to the property taxpayers of this state; they are paying the same or more taxes and getting less services.
Most counties have implemented dramatic measures to deal with both a decline in revenues at the local level and the decrease in the LGF. These measures include: freezing employee pay for several years, elimination of retiree health benefits, reductions in the size of their workforce, reducing the replacement schedule on emergency vehicles, and reducing county support of local organizations. Counties desperately need this funding to avoid widespread property tax increases.
At its core, the LGF represents property tax relief for your constituents and ours. An increase in the LGF means lower taxes and better services. We ask that you commit to increasing this vital source of revenue for the taxpayers of South Carolina.
County Councils do not want to raise property taxes on our neighbors, friends, and families! Current state obligations funded at the county level already overburden local budgets and county taxpayers. If the General Assembly—either by failing to meet its financial obligations through the funding of the LGF, or by choosing to dump state roads on local governments—forces massive property tax increases upon our citizens, elected officials at both the state and local level will surely meet with the wrath of the taxpayers at the polls in 2016.
The South Carolina Association of Counties (SCAC) is the only organization dedicated to the statewide representation of county government in South Carolina. Located in the state's capital of Columbia, SCAC is a non-partisan, non-profit association that strives to Build Stronger Counties for Tomorrow by working with county officials to provide education and training, legislative reporting, research and technical assistance.
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