Dr. Oran Smith

Everyone’s Got A Crazy Uncle…

Tax & Budget
May 1, 2015

Dr. Oran Smith

Suppose you had a rich but unpredictable uncle who started sending your three children to a top flight private school. Suppose he nearly always pays the tuition on time, but you know with certainty that he (and his finances) are unstable.

What would you do?

Well, good sense would drive you to have a contingency plan. Scrawled across the top of a legal pad in your kitchen might be: “What to Do if Uncle John Becomes Unhinged,” not so different from the famous fire alarm “In Case of Emergency, Break Glass.”

South Carolina’s Uncle Sam is very generous, supplying nearly 38% of our budget, but he is also unstable. The federal debt as of today (May 1) at noon stands at approximately $18.21 trillion, and every year the debt grows larger. What if Uncle Sam goes unhinged? Wouldn’t it be sound financial policy for the state to have a plan for the sudden absence of our crazy uncle?

The instability of Washington and its subsidies is the reason why Rep. Alan Clemmons introduced H.3027, a bill we affectionately call “Financial Ready.” The Clemmons bill simply asks state agencies to determine how much funding they receive from Washington and what they would do if that funding dried up. In legislative floor speak, this kind of common sense looked like a lock for the Uncontested Calendar.

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Not so. The bill was so contested in fact that it received the most heated debate on Crossover Day, which this year fell on this past Wednesday April 29. (That’s the date by which House bills must pass to the Senate to be considered and vice versa.)

Reps. Alan Clemmons, Garry Smith, and Eric Bedingfield took a barrage of flak from opponents, accusing them of everything from hatred of the President to wanting to shut the federal (and state) government down. Proponents of the bill won one procedural vote right after another (61-42, 66-31, 66-40) but in the end they were forced to carry Financial Ready over until next week in order to allow time for other legislation to get up to bat on Crossover Day.

Who would have believed that a policy recommended by the National Association of Certified Public Accountants and supported by over 80% of South Carolinians according to our Palmetto Promise Insitute Poll, would stir such a hornet’s nest?

Our Uncle on the banks of the Potomac is erratic and irresponsible, and in budget terms he is unbalanced. But as long as he is able to print money and give it away, he will find friends…lots of friends…about 40 in the South Carolina House to be exact.

Keeping an eye on our crazy Uncle Sam isn’t partisan politics…it’s just common sense.