Tuesday, March 1, 2011

Where did the stimulus money go in South Carolina?

I've been doing some investigating into the state finances (if I show up missing one day, call the CIA or FBI) to see if I can determine where the Stimulus money went that our state government accepted. Remember that Gov. Mark (hot pants) Sanford tried to refuse the money? But the state courts intervened and said we must take the money. And take the money we did.

Do you know how much Stimulus money we have spent so far? So far, means from march of '09 through Jan of 2011. A big whopping $4,030,918,748.....that's right $4Billion and change.
If you want to check my figures please log onto the State Comptroller Generals website   http://www.cg.sc.gov/scstimulus/    and see for yourself. I will warn you though that this transparent document is over 3700 pages long. Our Comptroller General Richard Eckstrom has sung his own praises of "transparency" in Government spending. So he has posted on this website all of the money that is being spent by our friends in Columbia. The only problem is that the report is a transaction report by category and sorted by purpose and also by department. These reports have every transaction you can imagine accounting supposedly for every penny spent. Great to have the information but difficult to make any sense out of.

So what about the Stimulus? Well, BHO was generous in giving away money that the Feds did not have so he had the Fed Reserve print up a bunch of Monopoly money and sent it around to all of the states. This was supposedly done to "CREATE JOBS". This money supposedly has no strings attached and we therefore do not have to pay it  back. It's sort of like your rich Aunt calls you up one day and tells you she will send you $10Million with no strings and do you want the money or should she give it to your older brother? This package of around $787 Billion approved on Feb 17th of 2009 was handed out like candy and we got in line and got our share. So what did the state do with it? Spent it of course.

Remember last fall when we were told that Medicaid in SC would run out of money by March 6th of 2011? Guess what, Medicaid ran out of money long before that. In March and April of 2009 Medicaid spent $83,076,084 all stimulus money. In total Medicaid has spent from March of '09 through Jan of 2011 a total of $285,886,785 for individual services and another $689,947,802 for medical services to institutions.. As of Sept 2010 Medicaid had spent $818,544,351 Stimulus dollars. So by the end of 2010 Medicaid had spent almost its entire budget by using Stimulus money.

Remember all of the hoopla about the Department of Employment and Workforce running out of money and having to make an emergency loan from the Feds of $900 million? Well guess what? There was $197,072,251 of stimulus dollars given to help pay unemployment claims. In total, stimulus dollars have paid $1,541,773,976 (count those commas, that's BILLION) for unemployment claims through jan 2011. Again, the stimulus money does not have to be paid back but the $900 million loan does have to be paid back, hence the reason the state recently changed the rates that companies have to pay for unemployment insurance. Had it not been for stimulus money would the state have realized long ago that we needed to do something?

What about creating new jobs? Wasn't the stimulus supposed to create new jobs? Well, I guess so. So here are the jobs that could have possibly been created in the state of SC. The Dept of Transportation gave contracts worth $463.1 million and as of Jan 31, 2011 had spent $331,214,491 for highway and road improvements. These contracts went to various companies around the state that build highways, Ashemore Brothers in Greenville, being one of them. From what I can tell this is the only expenditure that could have created jobs. But we all know that the major cost of paving or building a road is not labor , it is materials. Even with labor, we would have to assume that these companies already had a workforce and probably did not have to hire any new help. Even if they did hire someone it would have been a short term job, as it doesn't take long to pave a street in downtown Greenville. 

How about Education? We are always told the schools need more money for the children. Well, the kids in SC got $375,334,665 through grants to school districts. Greenville County Treasurer has received (specified for the schools),,,,$ 26,628,238. More than $1 million in Jan 2011. 

Anyone on food stamps? Well you can thank BHO for being able to eat. So far the food stamp program has spent over $153 million of stimulus dollars, and still spending. The Dept of Social Services has spent over $278,621,330 of stimulus money.

How bout our prison system? We have prisoners, as a matter of fact the adult average daily population is 24,105. The Department of Corrections spent  $26,943,509 through Sept 2010. 

Other major expenditures:
Wages and Salaries  $34,260,109
Temporary Positions  $6,649,116
Social Security payments for state employees:  $3,177,119
Other Professional Services $22,686,314
Legal Services $1,260,333
Grants to private sector, non taxable $6,482,928
Arts Commission $997,518
Grants to Planning Districts $36,706,245
Grants to Municipalities $10,595,779
Grants to other state agencies $14,536,658
Grants to entities $216,528,946 If anyone knows what an entity is please let me know, I want to be one
Grants to counties $24,526,964
Grants to employees - payroll $7,126,664

Some other expenditures paid for by Stimulus money:
Dental Insurance state employees $100,411
cellular telephones $43,187
accidental death benefits for Police officers $24,583
utility services $4,886,284
Retirement individual Solicitor $4,000,000  I think this was a single payment for a retiree
State retirement system $2,465,451
Retirement Police Officers System $4,148,719
Postage and supplies $229,923
Office Supplies $292,046
Natural Gas $1,385,630
Health Insurance $3,049,634

In a nut shell three things happened with the stimulus money, The state used the money to pay for Medicaid and Unemployment benefits with money that it did not have. The state also used the money for grants, education and highway work that went above the normal expenditures. Which means that the stimulus money was used in large part to spend on things that would not have been funded. The state also used the money fo fund normal operating expenses. All that this did was delay the inevitable of having to cut costs by laying off employees and reducing services. The state is continuing to spend stimulus money. i have spoken to the Office of Comptroller General but have not been given an answer as to what the total amount of stimulus money we have to spend. I was told the expenditures would continue until mid year. Since we have already spent over $4Billion it would be easy to think we will spend at least that amount before it ends. Money that no one had.

The state did not do any city, community, school, county or anyone or anything else any favors by passing the money around. The state should have come to grips with the lack of money over one year ago. While private employees were losing their jobs, state employees continued to work and collect benefits, in large part, paid for by money that did not exist. Money that will have to be eventually paid back by tax payers.

One major problem that has not been addresses is that of the future liability for retirees on the state pension plan. Mr. Eckstrom addresses the issue in his cover letter for the Popular Annual Financial Reort for the Year Ended June 30, 2010 when he reports: "Also, a severe long term funding deficit remains in the South Carolina Retirement Systems for future retirement benefits for public employees that must be dealt with and not permitted to grow." Yet the problem is not addressed in the annual report, nor are there any figures given as to the dollar amount of the shortage currently nor does it address the future liability. It was reported in the Greenville News last fall that the unfunded liability for future state retirees was $23 Billion. 4 years ago it was $15 Billion. When I asked the Comptroller Generals' office what the number was I was told they did not know. I hope to get an answer. This is an issue that NONE of the politicians addressed in the last elections and even to this day none of the politicians talk about it. This is a major issue and keeps getting swept under the rug. City employees in Greenville who work 30 years for the city will get 55% of their pre retirement income as a pension for life. All city and county employees across the state are in the state pension plan. How many of you have the promise of a pension plan that will pay you 55% when you retire? Teachers have a better deal and Policemen and Firemen even better. It is time that our politicians across the state started running the public sector like the private sector before it all collapses.
(note: all of these figures came from the report on the Comptroller Generals website). I didn't make them up.
Jerry Tollison

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