What is the Local Government Fund?

PICKENS COUNTY — Since 2009, Pickens County has failed to receive more than $10 million in state funding for mandates to provide services, yet the services are still required.

The revenue for this funding — called the Local Government Fund — is collected through multiple streams of taxation and revenue sources, a complex formula intended to make the burden of property taxes lighter for residents. Instead, the demand to continue provision of services at the county level continues while the funds are MIA.

Historically, the LGF was initially enacted as Aid to Subdivisions as part of the General Appropriations Act of 1943. The purpose of the aid was twofold with one being local governments providing basic and essential services and the second being an administrative arm of the state in providing state agency support.

In other words, services that are the responsibility of the state have been passed on to the counties with the promise of funding to provide the people and materials to continue providing the services.

Instead, as county governments all across South Carolina finalize their budgets for the 2015-16 fiscal year, those checks are no longer being written but the provision of services is still required by mandate.

Since the 2009-10 fiscal year, the state Legislature has suspended its mandate for fully funding the LGF each year including the current fiscal year’s budget, leaving the counties to make up the difference in their annual budgets.

Based on research dating back to the inception of the concept in 1943, South Carolina’s Legislature has repeatedly changed the formulas for determining the funds to be distributed, broken its own mandates by reducing funding, and has suspended funding in general despite its continued demand counties continue to follow their mandated requirements.

In many instances, local services that are provided actually fall under the purview of the state and this fund is intended to make the funding and provision of services whole, allowing the county to administer and handle the state’s job while taking the state government out of the equation.

Based on state legislation, separate legislation must be introduced and passed before any reductions in funding to the LGF are permitted, no amendments or the ability to repeal any or all of the State Aid to Subdivisions Act without specific legislation submitted and voted upon, yet, the funding is cut on a yearly basis.

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