State Program Spends Millions Despite Expired Legislative Authorization

The Senior Center Improvement Program was created almost 20 years ago to finance improvements to 74 senior centers through South Carolina, but nearly a decade after the original projects were completed the SCPIP still receives and spends millions of tax dollars.

SCPIP was evolved from a limited-scope initiative into a fixed part of the state’s bureaucracy, apparently spending tax dollars through a program for which there is no legislative authorization. SCPIP as currently constituted reveals a serious flaw in the SC budget process – one-third of the state budget operates on autopilot, with little oversight or transparency.

All of the programs should be re-evaluated for necessity and efficiency, and many could likely be eliminated.

The $20 billion state budget is comprised of three categories. The $6 billion general fund is the only category publicly debated and is what is commonly referred to as the “state budget.”

However, approximately two-thirds of state spending is funded through $7 billion in federal funds and $7 billion collected from state fees and fines. The revenue from fees and fines is categorized as “other funds” and is not debated in the General Assembly. Few policy makers, much less taxpayers, are able to identify how all those dollars are spent.

The SCPIP program is one example of an “other funds” program that illustrates the lack of accountability in the state budget.

The program was originally operated through the Office on Aging, which at the time was under the governor’s office and is currently run by the lieutenant governor’s office. SCPIP was created by the legislature in 1991 to finance improvements to 74 senior centers throughout South Carolina.

A provision in the FY91-1992 state budget directed $948,000 in “other funds” be allocated to the program through a temporary increase in the bingo license tax. The proviso also directed that the tax be repealed when collections reached $8.8 million.

The 74 original centers were completed in 2000. A competitive grants process that was created to finance specific projects identified by the Senior Citizen Center Survey, was also repealed effective Oct. 1, 1997. However, bingo revenue is still being directed to fund SCPIP projects.

According to the Comptroller General’s office, almost $9.7 million has been spent through the program since 2000. Several grants valued at $350,000 and at least one at $390,000 were awarded for capital projects during that period, according to the Lieutenant Governor’s Office.

The SCPIP fund currently contains another $3 million in the SCPIP Fund. Applications for the latest round of competitive grant funds were due to the Lieutenant Governor’s Office March 31, 2009.

The Senior Center Permanent Improvement Program presents a clear example of tax dollars being disbursed with little public knowledge and no apparent legal authority at a time when lawmakers are making cuts to essential programs. Furthermore, identifying the legal authorization for the SCPIP’s current operations proved difficult.

According to the Lieutenant Governor’s Office, “the original legislation was amended by the General Assembly in 1997 to continue it beyond the original list” of 74 projects.

However, according to Policy Council research, while bingo tax revenue is still being generated on behalf of the Senior Center Permanent Improvement Program Fund, there is no longer any legislation authorizing the program to actually use the revenue.

The Lieutenant Governor’s Office cites Section 12-21-3441 of the state code as authorization for the continuation of the SCPIP. However, that section refers to financing improvements to the original 74 senior centers, and has since been repealed.

Neither the Lieutenant Governor’s Office nor the Legislative Council was able to locate any other statute authorizing the specific use of monies in the Senior Center Permanent Improvement Program Fund for the current competitive grants program.

A second section, 12-21-4200, does authorize the appropriation of the bingo tax revenue to the Senior Center Permanent Improvement Program Fund. But the provision addresses only where the money is to be deposited, not how it is to be disbursed.

For the current fiscal year, $881,762.40 has been paid out through the program as of March 28, 2009. The deadline for applying to the Lieutenant Governor’s Office for FY09-2010 grants was March 31.

After spending $13 million on a program that does not have clear legislative authorization, it is ironic that lawmakers are now talking about cutting essential services such as law enforcement and teachers.

A better strategy would be to implement an immediate, comprehensive review of all programs financed through the state’s $7 billion in fees and fines revenue. Doing so will not only help streamline state government, but could potentially save millions of dollars that can be spent on essential government programs or returned to taxpayers.

Nothing in the foregoing should be construed as an attempt to aid or hinder passage of any legislation. Copyright 2009, South Carolina Policy Council Education Foundation, 1323 Pendleton Street, Columbia, South Carolina