The Unfunded Mandate Dilemma

PICKENS COUNTY— Pickens County Councilman Tom Ponder said the state needs to begin treating counties like businesses by providing them with the funds necessary to take care of unfunded mandates, the cost of which is beginning to impact the local coffers.

Ponder said many residents are unaware that some services provided by the county are actually mandated by state law and fall under a revenue stream known as the Local Government Fund (LGF), a concept dating back to 1943. Under the LGF, many services are in reality the responsibility of the state, even if funding isn’t provided, which is the case more often than not.

“Years ago the state came up with this idea, this deal where the counties would receive a certain percentage of revenue brought in by the state to fund a lot of the services at the county level, and they followed through for a number of years,” Ponder said. “Since 2008 Pickens County has been shorted an average of $1.6 million per year, which is more than $10 million since then. Even if the money isn’t distributed, the state expects us to continue to fund these mandated services even if the revenue isn’t provided.”

For Ponder, the consideration of running local government as a business is a notion many don’t recognize, and as such there are fiscal responsibilities to the local taxpayer.

“The money which is supposed to come back to the counties is earmarked for state mandated services and programs and state departments, as well as elected bodies locally, to administrate and provide these mandated services,” Ponder said. “As we saw the shortfall again by the state, ignoring its responsibility to provide the funding, we had to make decisions to live within our means.

“Over time we have begun to cut the county to the bone through attrition and have been able to keep going strong,” he said. “We’ve had to make some tough choices and streamline and the lack of funding provided by the state is beginning to affect not just Pickens County but every county in the state.”

Where does the lack of funding from the LGF leave the taxpayer?

“This shortfall year in and year out has become a double tax burden on our county’s residents,” Ponder said. “They pay property taxes and through the formula for this fund pay taxes on all sorts of items where the revenue is earmarked for the Local Government Fund.

“But the revenue the county is supposed to get never makes it out of Columbia,” he said. “When we don’t get the funding from the state, which is mandated, we have to dip into our reserves.”

Since 2009 the South Carolina Legislature has failed to fully fund the LGF.

“Every time I turn around there’s another unfunded state mandate or a shift of responsibility by the Legislature in this state,” Ponder said. “Take the roads for example. Columbia is now talking about shifting the responsibility to the counties for the maintenance of roads and bridges.

“There are over 1,800 miles of road in Pickens County and we’re talking about assisting with the care and upkeep, and that’s a huge expense the counties don’t have funds for,” he said. “At this point, it looks like the state wants to reimburse the counties for this type of work and I just don’t have any faith they will follow through.”

While Pickens County has managed to avoid tax increases for 10 years, Ponder said he believes other counties aren’t so lucky.

“I would say there are counties in this state not even holding on at this point. We’ve been lucky in the way we have managed the money and have a reserve to fall back on,” Ponder said. “You try to see a way out but in the end who suffers? Your friends and neighbors, that’s who. It’s impossible to fund all the state mandates without the revenue from the state and they haven’t proven the ability to step up to the plate.”

Should the state continue to fail in fully funding the LGF, beyond making tough funding choices, where does that leave Pickens County?

“If we don’t remember and treat local government as a business and live within our means our ability to continue to provide state mandated services is going to become too much of a burden that isn’t ours,” Ponder said. “Next year I don’t know where we’ll be unless the state finally decides to step up and do the right thing and that’s live up to its own mandates instead of passing not only the administration of state responsibilities but the cost to the counties, and fully fund the LGF. At some point there just isn’t any more locally to do the state’s job.”

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