Originally created 12/05/01

Aiken holds economic forum



AIKEN - South Carolina's declining economic forecast has state legislators in a bind, looking for ways to lighten the burden on local governments and educators.

"The numbers aren't getting any better," Rep. Roland Smith, R-Aiken, said Tuesday morning at a public forum held by the Aiken Chamber of Commerce. "The task is where we're going to make these cuts."

In October, the state Board of Economic Advisors projected South Carolina would see revenue growth of 2.3 percent in fiscal 2002, down from the 7.9 percent the board projected a year ago.

The October announcement preceded a midyear 4 percent across-the-board budget cut for South Carolina.

Dr. Donald Schunk, a professor of economics at the University of South Carolina, said Tuesday afternoon that the state will be lucky to see the 2.3 percent increase. He said the state's economy will likely turn around but not early enough to affect the current outlook for the fiscal year.

The state's 2002 budget cannot be altered, leaving legislators to negotiate the 2003 budget. The 2002 budget year began July 1.

Local political and education leaders gathered at Tuesday's forum voiced concerns about the future.

Aiken Mayor Fred Cavanaugh said eliminating South Carolina's car tax has strained local governments' budgets and that future unfunded cuts would worsen an already troublesome situation.

Because of state budget surpluses during the late 1990s, South Carolina's cities didn't have to increase taxes because of money handed down from the state, Dr. Schunk said.

Asked about unfunded state mandates and the effects they have on local governments' effort not to increase taxes, Sen. Tommy Moore, D-Clearwater, said, "You can't have it both ways" when the state's budget has been slashed.

"I'm not sure what the complete answer is," he said. "I think the entire tax structure needs review."

Mr. Smith and Mr. Moore were especially critical of education budget cuts. Holding Aiken County's pupils to higher standards but not providing them the financial means to achieve them is unfair, the officials agreed.

"It is absolutely chaotic," Mr. Moore said. "The General Assembly should be embarrassed."

Reach Josh Gelinas at (803) 279-6895 or josh.gelinas@augustachronicle.com.