- Associated Press - Saturday, January 25, 2014

COLUMBIA, S.C. (AP) - A bill being talked about as the largest overhaul of state government in 20 years is on its way to desk of Gov. Nikki Haley, who praises the restructuring both she and her predecessor fought for as bringing South Carolina out of the dark ages.

But explaining how taxpayers benefit won’t be easy as she and her Democratic opponent tout its passage on the campaign trail.

The measure won’t produce immediate savings, as no layoffs are expected. In fact, it will require additional spending initially, with the hiring of a new agency director and extra legislative staff to help the Legislature comply with its newly required reviews of agency programs.

Other undetermined costs will be incurred by the moving around and renaming of government divisions.

But supporters say the soon-to-be-signed law will eventually save the state millions through centralized purchasing and technology services.

Other benefits are less measurable, with supporters summing up the changes as making government more effective and accountable.

The bill’s passage is a “win that will finally provide the people of this state with the efficient, cost effective, and forward looking government they deserve,” said Haley spokesman Doug Mayer. “Gov. Haley has long maintained that government needs to run like a business and this is a major step in that direction.”

Mayer called it a great, bipartisan win after a three-year fight. But the fight actually started with former GOP Gov. Mark Sanford, whose antagonist relationship with legislators - who opposed the bill as giving the governor more power - made passage during his tenure increasingly unlikely. Haley then managed to make a largely inside-the-Statehouse debate over an arcane agency a campaign issue, and abolishing what she called the “big, green, ugly monster” became a central part of her agenda.

It took the politically odd duo of Haley and state Sen. Vincent Sheheen, her Democratic opponent in 2010, to finally push the idea across the finish line ahead of their election rematch this November. Both can tout accomplishing a signature issue, as Sheheen has sponsored the idea since 2007. The Camden senator was the one Democrat Haley thanked in her State of the State address last Wednesday, a day after the Legislature gave final approval.

So what exactly is the end result of this decade-long effort?

Over this year and next, the Budget and Control Board’s wide-ranging responsibilities will be divided among new and existing agencies.

The first moves will occur in July, as the agency’s economic divisions become the Revenue and Fiscal Affairs Office. That new agency will consist of the Board of Economic Advisors, which makes revenue projections and estimates the cost of legislative proposals, the Office of Research and Statistics, and budget staff that will help the Legislature. Other budget staff will transfer to the governor’s new budget office, replacing the one person in Haley’s office who puts together her budget proposal.

Beyond making it more likely that legislators will use the governor’s suggestions - Sanford’s budgets were immediately tossed aside - Haley’s office says this new division will allow for more analysis and monitoring of agency spending.

The governor’s budget office will become part of the new Department of Administration in July 2015, when the Budget and Control Board name will cease to exist.

The new Cabinet agency puts many bureaucratic functions under the governor, including the management of state property and parking facilities and human resources. In all, about 685 people at the Budget and Control Board - three-quarters of its current staff - will work for the Department of Administration, according to estimates the Budget and Control Board provided Friday.

The new agency will also incorporate a dozen divisions now part of the governor’s office, including the guardian ad litem program and division of veterans’ affairs.

The five-member board that oversees the Budget and Control Board will oversee a new agency called the State Fiscal Accountability Authority. That five-member board was the target of much of the debate, and Sanford fought to eliminate it and Haley said that was the goal. Though the governor serves as chairman, Sanford regularly fell on the losing end of 3-2 votes.

The same five people - governor, treasurer, comptroller, and the chairmen of the House and Senate budget-writing committees - will maintain authority over fiscal decisions such as bond approvals, purchasing and insurance reserves.

Critics have faulted the final bill as reform in name only, for renaming rather than eliminating that board. But supporters say it greatly diminishes its power.

Haley hoped to put procurement into the Department of Administration, to get deals through statewide contracts. But the Senate insisted that no one person should have control over contracts. So, the compromise requires the new fiscal authority agency to undertake a so-called “strategic sourcing initiative” no later than Dec. 31, 2015.

That’s the part of the bill expected to generate the most savings, possibly tens of millions of dollars.

Haley’s office touts this change as state government buying things like a large business would. It expects the price of everything from computers, to cleaning supplies to paper clips to get a lot cheaper when a single agency is negotiating purchasing agreements, rather than each agency entering its own.



Click to Read More

Click to Hide