THE FICKLE FINGER OF FATE

For some unfathomable reason, there are people in our society who just love to push the envelope to the maximum degree. Sometimes, this is not a bad thing. Records are set; discoveries are made. Society usually benefits in some way by these efforts. BUT, there are equally as many people who engage in this extreme behavior to the detriment of society. You can equate these people to spoiled children who manage to misbehave on a regular basis without correction. If they get caught pulling the cat's tail, they blame it on their brother. If they get caught stealing a cookie, "Daddy said I could have one."

We have all known of people who belong to this latter group: Madoff, Wrangle, Parish, Weiner, and of late, Blago. We have marveled at the fact that folks of this ilk seem to seldom if ever get punished adequately for their bad behavior. If they are finally brought to task, years of damage and economic carnage have passed. It is doubly frustrating and annoying when these people are elected officials handling our tax dollars.

Well, take heart. Sometimes, there is such a thing as poetic justice. Sometimes, these folks push the envelope a bit too far. Sometimes, they try to add just one more straw to the overburdened camel's back and they are brought to account for their actions. We have such a case to report today.

All of the regular GE&P readers know and cringe at many of the policies of the present BC administration:

You knew it was wrong when the Supervisor acted in direct opposition to a vote of County Council concerning the re-branding of the BCW&SA. All he had to do to get out of that little mess was say, " Ooops, my bad" and go his merry way with many of his illegal changes left in place due to the expense to the County of changing everything back to the way it was. First big win for the Supervisor.

You all knew it was wrong when the Supervisor allowed a $2.4 Million water line with less than 10 tap-ins to be installed, without the knowledge of full Council, to the relative front door of a Councilman's house because he needed the support of this Councilman to establish his vote control. The criticism of this project was manipulated by it's supporters and culminated in the opposition being dubbed "racists". The fact that this project was not economically feasible was pushed to the sideline and deemed immaterial. Eventually, the furor died down, the water line was installed, and the Councilman's support was secured. The Supervisor wins, again.

You all knew it was wrong when the Supervisor proposed taking back 29% of the property tax relief derived from the Local Option Sales Tax (LOST). The first two times the LOST was proposed, the taxpayers voted it down by referendum. This new tax succeeded only when Council vowed that "100% of the revenue derived from the tax would be applied to property tax relief". The Supervisor ignored this promise, misinformed some members of Council, and mustered sufficient votes to take the 29%. Since, he has used these funds to finance some of his wasteful spending. The Supervisor wins, again.

You all knew it was wrong when the Supervisor proposed a 30% increase in the water and sewer rates. At that time, BCW&SA had an enormous fund balance. (Funds contained in the fund balance are deemed "surplus", comparable to a savings account.) The Supervisor blamed the necessity for this increase on the rules of the bonding companies. He explained that the bonding companies required a mandatory ratio between revenue and the debt. Several of his advisors testified to Council that this was, in fact, true. The incomprehensible element to this argument was that the size of the surplus had no impact on this ratio. (Would it not be astounding if, at one point in time, a BC advisor, after being shown documented proof that this person had provided misinformation to Council, answered, "I know that, but, if one lies with enough conviction, the statement will be taken for the truth.") A sufficient number of Councilmen were convinced of the necessity for the increase and the measure passed. The Supervisor wins, again.

You all knew it was wrong when the Supervisor began referring to BCW&SA as a "department" of BC government. You voiced disapproval when he announced that he proposed a "transfer" of funds from the fund balance of W&S to the general fund of BC government. He defended this action by saying it made no sense for one "department" to borrow needed funds when another "department" had surplus funds just laying around unused. In January, 2008, Resolution 08-01 was approved "to transfer an amount not to exceed $10 Million from the BCW&SA to the BC General Fund". The Supervisor wins, again.

You all knew it was very wrong when the Supervisor decided to cut out all opportunity for opposition to his policies by reorganizing County Council Rules. Existing Rules and precedent were violated or ignored; the Committee system was bastardized; and, in the end game, only the Supervisor's supporters on Council had any control over the decision making process. With positive input from the County advisors ratifying the process to establish all these changes, the new Rules were put into place. Since that "reorganization", four members of County Council have had no input whatsoever in the policy making process of BC government. Consequently, when the Supervisor now makes a proposal, no matter how outrageous, the vote is always 4/4 with the Supervisor breaking the tie in his favor. This maneuver was a genuine coup and the Supervisor wins, again.

You all knew it was wrong when, considering the state of the economy, the Supervisor proposed his new Capitol Improvements plan: the $6 Million purchase of the old fairgrounds property (using the seller's appraisal) to locate the $22 Million "Dan Davis Health and Human Services Campus", a proposed new $3 Million court house in St. Stephen to secure another Councilman's supporting vote, a proposed multi-million dollar library in Hanahan that even the Mayor of that town doesn't support, spending millions of dollars on expanding the senior citizens center in Moncks Corner, and playing musical chairs with numerous agencies in the county at a cost of more millions of taxpayer's dollars. The actual list of proposed projects is far too long to include here. We only named the most egregious offenders. With the cooperation of his supporters on County Council, the Supervisor obtained approval for this agenda. Another win for the Supervisor.

At last, we come to the part where the tide changes. As a wise man once said, "Be careful that you don't drive something into the ground until you break it off." Unfortunately for the Supervisor, his actions at Monday night's County Council meeting indicate he has never heard this cautionary tale.

Late last week it became public knowledge that the Supervisor intended to submit a budget Ordinance for fiscal year 2011/2012 that would combine the BC budget with that of the BCW&SA. It was argued in many circles that this rumored move was highly unlikely due to the fact that extensive research proved beyond a shadow of a doubt that BC Law and SC Statute clearly forbade such action. If anyone would like to read the statutes for themselves, please refer to S.C. Code Ann. 6-1-300 through 6-1-330, S.C. Code Ann. 4-9-30(5)(a), and BC 1992 Ordinance NO. 92-06-08. The proof that the language of the 1992 Ordinance has never been repealed can be found in BC 2010 Ordinance No. 10-07-18.

When this combined budget was introduced during the Finance Committee meeting Monday night, Councilman Callanan referenced the 2008 Resolution transferring funds out of the BCW&SA's fund balance and suggested the County would be following a slippery slope if this combined budget was to be adopted. He suggested that the County would be placing itself in a precarious legal position. Mr. Calanan voiced some concern that the head of Finance, Mrs. Smith, at a previous meeting, had indicated that Council could vote to forgive the debt to W&S if it should so choose. He said this action, should it happen, would leave W&S at a disadvantage concerning the recoupment of its funds. The Supervisor, however, put everyone's concerns to rest when he announced that he wanted to adopt this combined budget strictly for the convenience of simplicity and that he had no intention of commingling the funds. (Well Sir, we don't know about you but that assurance surely takes a load off our mind. Silly us thought this whole exercise was formulated so BC government could get it's hands on BCW&SA's surplus. We are truly relieved that we were mistaken.)

Also, Mr. Callanan made a motion that any revenue collected that exceeded expenditures under the 2011/2012 budget be dedicated to property tax relief. He said his goal was to return some of the 29% from the LOST to the taxpayers.

Councilman Fish introduced a motion that a continuing resolution be adopted so that Council could hold a workshop on his budget analysis that could save the County approximately $1 Million. Also, he quoted the BC law that states the "transfer" of the $5 Million from the BCW&SA fund balance was illegal. Needless to say, both Mr. Callanan's motion and Mr. Fish's motion failed when a vote was taken in full Council. You have to remember these two Councilmen have no vote on the Finance Committee thanks to the Supervisor's new Council Rules. Sounds fair to us.

Ultimately, when a vote was taken on the new combined budget, the result was 4/4 with (here comes a big surprise) the Supervisor breaking the tie in favor of his budget. Supervisor Dan Davis, Councilman Bob Call, Councilman Cauldwell Pinckney, Councilman Steve Davis, and Councilman Jack Schurlknight all voted in favor of this combined budget after hearing Mr. Terry Hardesty read the SC Statute forbidding the commingling of W&S's revenues with those of BC government. To date, these four members of Council who support the Supervisor have faithfully marched like lemmings to the beat of the Supervisor's drum. Unfortunately for these faithful supporters, they may just have unwittingly marched off the proverbial cliff with this latest vote. If the 2008 Resolution didn't exist, it would be easier for a judge to believe the Supervisor's story about only wanting simplification of the Budget Ordinance. His statement about having no intention of commingling funds might be believable if he had not already taken funds from the W&S fund balance and put them into the general fund of BC government. But the 2008 Ordinance brings all of his assertions into question.

Now, the die is cast. The deed is done. Mr. Davis' administration has no choice but to face the possible consequences of his actions. Could this be the first big loss for the Supervisor?

As with most things political, GE&P has more questions than answers:

Does anyone think that BC government's use of BCW&SA's fund balance as a revenue source is illegal?

Is this very thing the goal of this administration?

Has this plan been in the works since the W&S rates were raised years ago?

Was the combined W&S/BC government budget Ordinance the first step toward combining the revenue of both entities?

Does this administration think it will cause less controversy to gain revenue by this means as opposed to flat out raising taxes?

If you have the answers to any of these questions or would like someone to try to answer them, please call your member of the BC delegation. GE&P would very much like some answers.

PROFIT?

GE&P read the P&C article this morning about Cypress Gardens with great interest and, we must confess, greater confusion. The article provided many valuable facts and figures but the conclusions drawn from this information were right out of the Twilight Zone.

GE&P supports Cypress Gardens as the golden asset to the county that it is. Our only argument is with the manipulation of the facts as presented in this article.

EXAMPLE:

"The county paid off its ($3.5 million) debt from a surplus fund."

FACT:

BC government illegally took this money from the fund balance of the BCW&SA. This administration, using accounting slight of hand, maneuvered these funds, ultimately, into BC's general fund.

EXAMPLE:

"By the numbers, $61,352 estimated profit."

FACT:

The taxpayers of BC are providing $647,000 a year in property taxes to Cypress Gardens. If we are providing subsidies to the expense column, how can these people claim that a positive bottom line is "profit"?

It's time for the misinformation to stop.

FOR THIS DAY

"Daddy's hands were soft and kind when I was crying.

Daddy's hands were hard as steel when I'd done wrong.

Daddy's hands weren't always gentle but I came to understand,

There was always love in Daddy's hands."

THANKS TO "THE NERVE"

After Filibuster, Senator Eyes Budget Cuts, Tax Refunds

By Eric K. Ward
 The Nerve


S.C. Sen. Tom Davis wants to cut next year’s proposed state budget by at least $149 million and have that money refunded to South Carolina taxpayers.
The senator’s proposed cuts and rebates could be twice that amount, or closer to $300 million, based on calculations he attributes to Senate Finance Committee staff.
Davis, R-Beaufort, says he plans to propose a series of amendments to implement the spending cuts and tax rebates when senators resume deliberations next week on a budget for the 2011-12 fiscal year, which begins July 1.
The Senate has been debating an approximately $21.8 billion budget since the final week of April. Members of the chamber plan to pick it back up when they are scheduled to reconvene Tuesday at 10 a.m.
Again citing Senate Finance data, Davis says the general fund portion of the proposed budget would grow from $5.1 billion this year to $5.86 billion next year, an increase of $760 million or nearly 15 percent.
“And my point was households haven’t seen that kind of an increase in their incomes,” Davis says of an unusual, five-hour filibuster he mounted against the budget on the Senate floor Thursday. “I mean they’re trying to make ends meet.”
The general fund, about one-fourth of the budget, consists of state tax revenue. The rest of the budget comes from “other” funds, mostly fees and fines, and federal funds.
Davis says the Legislature, and state government in general, should abandon its spend-whatever-we-collect mentality and instead focus on core functions, discontinuing activities outside of its mission such as economic development.



Send it Back 
Whatever money remains after that process, he says, “Let’s send it back to the taxpayer. Essentially we’ve over-collected.”
Davis provided The Nerve with an advance copy of nine budget amendments he plans to introduce.
Most of his would-be cuts and taxpayer refunds would come from a $100 million reduction in Medicaid, a federal- and state-funded health care program for the poor, elderly and disabled.
Another amendment proposes a 10 percent reduction in funding to the Commission on Higher Education and state-supported colleges and universities. The schools “must reduce administrative and non-classroom instructional programs to absorb the cost,” the amendment says.
Five of the amendments similarly seek 10 percent funding reductions to a host of agencies and departments, including the House and Senate, and all nine constitutional officers except the attorney general and adjutant general.
The 10 percent list also features the Public Service Commission and the Department of Parks, Recreation and Tourism.
The Department of Consumer Affairs would get about $565,000 less.
Davis says he reviewed the Senate Finance allocations to each entity compared to its core mission and asked staff members of the committee to calculate his proposed savings.
Adding the figures, The Nerve came up with a little more than $149 million. The total listed in the documents, however, is double that amount – $298 million.
Davis says he isn’t sure how to account for the discrepancy.



Income Tax Rebate Fund
It could trace to a formula outlined in another of his amendments. That one would set up an “Income Tax Rebate Fund” in the S.C. Treasurer’s Office. The office would use the formula and the fund to compute and issue refunds to taxpayers. Late filers would not qualify.
The final Davis amendment calls for using any general fund revenue collected through the first three quarters of next fiscal year in excess of projections to help pay off nearly $1 billion in state debt to the federal government for unemployment benefits.
Asked why he would take the largest share of his cuts out of Medicaid, Davis says the budget the Finance Committee presented to the Senate would grow Medicaid by $200 million, meaning the program still would receive $100 million more over this year even if his suggested cut passes.
Also, Davis notes that the Legislature has taken steps to reduce Medicaid costs by repealing several provisos.
Those measures mandate certain Medicaid services, such as medically necessary chiropractic care. Another one of the provisos prohibits the state agency that manages Medicaid, the S.C. Department of Health and Human Services, from reducing payment rates to hospitals and other Medicaid providers.
South Carolina is the only state with a lock on its Medicaid provider rates, according to state officials and health care industry representatives.
Health and Human Services officials have said they are planning to cut rates 10 percent overall, but reductions for different industry sectors would vary.
The Nerve asked HHS for a response to Davis’ proposed $100 million reduction.
“Instead of taking 10 percent from the Medicaid provider line, we’d have to take around 18 percent,” agency director Tony Keck said in an email from HHS spokesman Jeff Stensland.
Continuing, Keck wrote, “Since most of our saving strategies, such as reducing NICU (neonatal intensive care unit) days, would be maxed out, most of the additional 8 percent would have to come from eliminating or significantly curtailing optional services and programs.
“We’d also have to look at additional rate cuts to managed care organizations and providers.”



Commitment on Amendments 
Davis says he agreed to end his budget filibuster only after receiving a commitment in writing from enough of his fellow senators that would allow him to bring his amendments to the floor for a vote.
Under Senate rules, doing so requires the consent of three-fifths, or 60 percent, of senators present.
While Davis spoke against the size of the budget on the floor of the chamber Thursday, he says his desk mate, Republican Sen. Phillip Shoopman of Greenville, approached all of their colleagues on hand asking where they stood on the matter, checking off their positions accordingly.
Only three senators said they would oppose the Davis amendments being voted on, according to the list Davis provided: Republicans Hugh Leatherman of Florence, Paul Campbell of Berkeley and Ray Cleary of Georgetown.
Sens. Thomas Alexander, R-Oconee, and Glenn McConnell, R-Charleston and president pro tempore of the chamber, were marked as “present.”
Sens. Darrell Jackson, D-Richland, and Gerald Malloy, D-Darlington, were recorded as unsure.
Davis said he did not know how to explain the “present” answer.
Efforts to reach Shoopman on Friday were unsuccessful.
Reach Ward at (803) 254-4411 or eric@thenerve.org.

It would appear Senator Campbell finds himself on the wrong side of an issue, again. He contrived reasons why he, originally, would not support the Voter ID bill and now, he refuses to back spending cuts to reduce the budget. Let's see, exactly when does Senator Campbell come up for reelection? We'll have to make a mental note of that for future reference.

QUOTE OF THE DAY

Many thanks to the Navy Seals who rappelled into Usama Bin Laden's compound and achieved justice for the 3000 Americans killed on 9-11.

The official report from the CIA stated, "The Navy Seals gave UBL the opportunity to surrender before they shot him."

For years now, the description of the shortest possible period of time has been "the time between when the light turns green and when the woman behind you blows her horn". From this moment on, the shortest possible period of time will be described as "the time between when the Navy Seal asked UBL if he wanted to surrender and the time he shot the SOB in the head".

USA USA USA

IS THIS ANY WAY TO RUN A RAILROAD?

• In 1994 lawmakers invested $17 million in Air South. Three years later the company went bankrupt and 700 South Carolina workers were laid off.
• In 1997 Marine Energy Systems was promised enormous taxpayer-funded incentives. The company announced the creation of 700 jobs. Less than three years later, the company was bankrupt.
• In 1998 Western Star Trucks was offered a massive investment package that included a reduced fee in lieu of property taxes and $25 million in exchange for 400 jobs in North Charleston. Two years later the plant closed.
• For two decades politicians gave millions – in cash – to Policy Management Systems Corp. In 2000 the company laid off 700 workers, was bought out, and the new company laid off 550 more.
• South Carolina taxpayers have spent more than $100 million on a new “research park” called “Innovista.” Politicians promised it would attract millions of private sector investment dollars. Today, the buildings are unfinished and largely empty.
• More than $40 million in state and local tax dollars have been spent in the Midlands alone to develop the “hydrogen economy.” Two hydrogen fueling stations cost $1.45 million. There are only two hydrogen-powered cars in the state, one of which costs more than $100,000.

This preceeding information was provided by the South Carolina Policy Council.

We think everyone will agree that these practices are outrageous. Unfortunately, we don't have to go out of Berkeley County to find similar egregious waste of taxpayers' dollars. All we have to do is look toward the end of Sheep Island Road.

We must go back to 2006 where the story of the "Sheep Island Road Industrial Project" begins. The controlling entities have changed names several times so, to avoid any confusion, we will refer to the only part of the "Project" concerning TBC. A FILOT (Fee In Lieu of Taxes) was executed in 2006. TBC would pay taxes at a rate of 6%, with a Special Source Revenue Credit of 15% of that amount.

On October 12th, 2009, Supervisor Davis executed a document amending this original FILOT agreement. In this new agreement, the SSRC was raised from 15% to 100% for 15 years. Also, in this agreement, TBC would only pay 25% for the final 5 years of the term. In simple terms, this means TBC would pay NO TAXES for the first 15 years.

As if this agreement didn't give away the farm enough, Mr. Davis executed yet another amended FILOT agreement with TBC on December 13th, 2010. In this newest agreement, TBC's tax exempt status was extended to 40 YEARS.

The reasoning was:

Whereas, the County has determined, in anticipation of the expected economic development impact of the Project, that it is in the best interest of the County to further induce the undertaking of the Project by extending the Fee Term, initially established to be twenty (20) years in the Original Fee Agreement, by twenty (20) years for a total of forty (40) years.

These agreements establish beyond question that Berkeley County can expect to get exactly nothing from TBC in the way of taxes for the foreseeable future. That removes any revenue gains from this equation. Now that we know what BC is NOT GETTING from TBC, let's look at what BC is GIVING TBC.

According to BC Resolution R10-03, on the 25th day of January, 2010, BC accepted a grant from the South Carolina State Ports Authority in the amount of Seven Million Dollars ($7,000,000), for the purpose of providing "aid in the construction of a new interchange located at approximately mile marker 197 on I-26." (Sheep Island Road) On the same day, Resolution R10-04 was adopted. This document details a grant from BC to TBC for $2,550,000 "for the relocation, acquisition, installation and other related costs associated with TBC's material handling equipment, generators, security systems, and other equipment." Also, on January 25, 2010, Resolution R10-05 was adopted. This Resolution grants TBC another $4,173,000. In the document, this money is earmarked "to assist with the costs of site work, utility installation (including water, sewer, telecom and electrical service) and engineering and design costs......".

The South Carolina State Ports Authority can legally grant monies to counties for infrastructure projects but is restricted by law from giving monies to private businesses. GE&P interviewed two members of BC Council concerning the coincidental transfers of these funds. We were told that no laws were broken BUT the laws have loopholes big enough to drive a truck through.

Moving right along, on February 8, 2010, BC Resolution R10-08 was adopted. This resolution accepts a $15,000,000 grant from the South Carolina State Ports Authority "to use for the costs of facilitation of construction management and to aid in the costs of construction of a new interchange in support of the County's economic development efforts....". According to this document, this Resolution supersedes R10-03, previously mentioned. At the end of this new document, it specifies the total amount of $15M can be used "for public purposes" even though the description paragraph states the money is to be used for the new interchange.

On February 22nd, 2010, Resolution R10-12 was adopted. This Resolution grants TBC another $2,100,000 "for the construction of certain public roads, including Drop Off Drive and other adjacent public roads."

To date:

SCSPA granted $7M to BC and BC granted $6,723,000 to TBC on the same day, 1/25/10.

SCSPA granted to BC an additional $8M, totaling $15M in February 2010 and BC granted TBC $2,100,000 same month.

TBC will pay NO BC taxes for 40 years.

Just when you think this mess couldn't get any worse, there's more. The State Infrastructure Bank had indicated it would contribute $25M toward the new Interchange. Since then, due to reduction in State revenue, they have withdrawn this offer. The town of Summerville offered $5M toward the new interchange because those folks learned two hotels planned to build in the same area. Summerville added one little string to its offer though. They wanted to annex the area into their town so they could get a share of the property taxes and the accommodations tax. Well, BC said, "No way, no how" to that suggestion. So Summerville withdrew their $5M. To add insult to injury, when the hotel companies realized they could end up in a situation where they had to pay taxes to two entities, they pulled out of the deal, too.

Considering the fact that TBC has no BC tax liability and BC has deferred a huge amount of their startup costs, should this economy continue to decline, what is there to deter this company from just packing their bags and leaving the BC and SC taxpayer holding the bag? In a word.......NOTHING.

GE&P IS STILL AT WORK

GE&P is working on another expose. We know it is taking a long time but excellence doesn't come quickly. Stay tuned.