Wishing You a Safe, Blessed, and Happy Fourth of July!

The Fourth of July is the great summer holiday when families come together to enjoy cook-outs, patriotic music, fireworks, and all that has traditionally accompanied our nation’s birthday celebration.

Communities throughout South Carolina will sponsor an array of parades, festivals, and concerts, many culminating with extraordinary firework displays. These great events will be part of the best memories our children will carry through their lives. That is why I would like to suggest that among all the happy events of the day, families pause to realize that this day also represents the extraordinary faith, courage, and dedication of our nation’s founding fathers.

One good way to discern the character of perhaps our most noted founding father is to consider George Washington’s “Earnest Prayer.” The great General, facing military retirement at the close of the Revolutionary War, was in Newburgh, New York on June 14, 1783, when he released a “Circular Letter Addressed to the Governors of all the States on the Disbanding Army.” General Washington wrote in his letter:

“I now make it my earnest prayer that God would have you, and the State over which you preside, in His holy protection; that He would incline the hearts of the citizens to cultivate a spirit of subordination and obedience to government, to entertain a brotherly affection and love for one another, for their fellow-citizens of the United States at large, and particularly for brethren who have served in the field; and finally that He would most graciously be pleased to dispose us all to do justice, to love mercy, and to demean ourselves with that charity, humility, and pacific temper of mind, which were the characteristics of the Divine Author of our blessed religion, and without an humble imitation of whose example in these things, we can never hope to be a happy nation.”

In these times, no less than in Washington’s time, our nation needs such a spirit of service and dedication. And none should question that it especially needs his “earnest prayer.”

We wish you and yours a safe, blessed, and happy Fourth of July!

The Battle for Freedom Continues

This week the Supreme Court rendered two extremely important decisions in support of the Constitution, freedom, and the individual liberties of every American.

Virtually all of the media attention has been focused on the Court’s ruling in District of Columbia v. Heller, which upholds the individual right of Americans to own guns in the District of Columbia. Since Washington, D.C. is federal territory, many of those who oppose the Constitutional right to keep and bear arms continue to argue that the Second Amendment simply allows for state militias to possess guns, and they strive to keep and expand state and municipal prohibitions against individual gun ownership. But these state and local laws will now be challenged in light of the new ruling that makes clear that our Constitution and Bill of Rights not only mean what they say, but apply to every American.

In finding the Washington, D.C. gun ban in violation of the Second Amendment to the Constitution, Justice Scalia eloquently affirmed what our founding fathers understood when saying that certain rights are inherent, natural, and from God, not government, and when he explains how the rights affirmed by the founding fathers have their roots deep in ancient British legal history. These natural, God-given rights include the right to defend oneself and one’s family, to safeguard one’s home and property, even to defend one’s right to life, liberty, and the pursuit of happiness against a tyrannical government.

For a great many Americans, what the Supreme Court has done in this landmark case is to affirm what most of us simply regard as “right thinking” or common sense. Yet the Supreme Court’s ruling in this matter was determined by a razor thin vote of 5 to 4.

The national attention that focused on this Second Amendment ruling has eclipsed another Court decision rendered the same day, but one that is at least as important in that it re-asserts our First Amendment right to free speech. The McCain-Feingold law has been seen by many as an “incumbent protection act” in that it restricts the quantity, content, and timing of political speech during federal elections. One provision, known as the “millionaires’ amendment,” had attempted to subdue wealthy, self-financing candidates by letting their opponents receive triple the standard campaign contribution limit of $2,300 per donor. This provision effectively had limited what one candidate could spend, thereby limiting that candidate’s speech, since it costs money to get one’s message to the voters. Also, by “leveling the playing field” in this way, the law provided an advantage to incumbents who typically are much better known than are their challengers.

This week the Court also determined by a 5 to 4 vote that this provision of the McCain-Feingold law is unconstitutional, thereby upholding the right of a candidate to spend his own money for campaign speech.

While we can be thankful that the Supreme Court has aligned itself on the side of liberties contained in our Bill of Rights, the closeness of these votes reminds us of how very fragile those liberties are.

When we hear legislators boast about how much legislation they have sponsored and passed, we need to remember that every law, whether it is promulgated by local, state, or federal governments, limits someone’s freedom. The challenge is in knowing when to make the trade-off.

There was a time in the nineteenth century when many seriously argued that our Congress was no longer necessary since our nation had all the law it needed. With the threats posed by international terrorism, by a public that increasingly thinks government should solve all problems, and by a government that seeks to manage everything from the nation’s economy to planetary temperatures, our liberties come under constant assault.

The noble battles for liberty fought at Bunker Hill, Ticonderoga, Valley Forge, Charleston, Camden, and Eutaw Springs continue today in both political parties, in our state legislatures, in Congress, and as we have seen this week, in the United States Supreme Court. The fight is never ending.

Free Markets, Not Government, Are the Answer

Americans in every part of our nation are acutely aware that something is causing steep increases in the price of gasoline. At approximately $4 per gallon and continuing its upward climb, some estimate that the price of gasoline could double in the foreseeable future. Such prices not only will create havoc with family budgets, they will stagger our nation’s economy.

We have been given many reasons for the price increases and many solutions to resolve the crisis that these increases have created. But when Congressional Democrats recently called for the federal government to nationalize the refineries, I was reminded of President Reagan’s first inaugural address in which he said:

"In this present crisis, government is not the solution to our problem; government is the problem."

That is as true of our “present crisis” as it was of the enormous challenges faced by our fortieth President.

For four decades, presidents and Congress have yielded to environmental extremists who have opposed virtually every opportunity to move “we the people” closer to energy self-sufficiency. They have opposed hydropower because of perceived threats to the natural habitat of fish even though hydropower has been used to produce electricity since before the invention of the light bulb, it is nearly free, there are no waste products, and it does not pollute the water or the air. They have opposed nuclear energy even though it provides safe, clean, and inexpensive power to much of the world. They have opposed drilling for oil on western federally-owned lands, in the arctic wasteland, and offshore and in the Outer Continental Shelf of the United States, even while China and Cuba are preparing to drill for oil in those same waters off America’s coast. They have even opposed erecting wind turbines off our coasts that convert kinetic energy in the wind into electricity, because turbines might block the view for boaters and for those with waterfront property. Political leadership should be made of sterner stuff.

Beginning in 1982, Congress began limiting offshore drilling through the appropriations process for the Department of the Interior. In 1990, the elder President Bush issued an executive order restricting new offshore exploration and drilling. In 1998, President Clinton extended these regulations through 2012, and until this past week, our current President has done nothing to relax them. Now, at crisis stage, he indicates that he will support legislation opening the Outer Continental Shelf for exploration and drilling.

Since the 1970’s, American presidents have encouraged the American people to conserve, put on sweaters, and turn down thermostats, with the understanding that the law of supply and demand would keep affordable the inexpensive oil we were importing from the Middle East. Unfortunately, in the intervening years the same governmental leaders that have overseen our energy crisis have presided over the export of America’s manufacturing industries to other countries. As a result, we are no longer the world’s foremost consumer of foreign oil. In fact, there are far more tankers crowding China’s ports than there are in our own, fueling China’s rapidly increasing manufacturing industries. While we might hope that driving less and conserving more will bring down oil prices, hordes of foreign consumers are hungry for our share and more, thus driving up prices.

As a result of America’s energy crisis, both political parties and their candidates will likely be trying to sell us complex energy plans on how government can get us out of this mess that government got us into. As President Reagan wisely understood, comprehensive government plans are not the solution to the crisis we confront; government plans likely are the problem.

The solution to our energy crisis is not nationalization of oil refineries. That is the way of Venezuela, Russia, Cuba, and China. The answer in the United States is for our government to step aside and rescind its Executive Orders, statutes, and volumes of rules and regulations that have all but ruined America’s robust economic engine of exploration, research, development, and production.

America has the same capability it has always had to lead the world in developing new sources of bioenergy from plant matter and animal waste. It can harness geothermal energy from deep within the earth, and the sun’s energy can be more efficiently used for heat and electricity. Hydrogen can be cleanly produced from renewable sources. Tidal forces, when harnessed, offer enormous potential power. And while all of these new technologies are being developed or expanded, we have sufficient deposits of oil and coal in the United States to provide for all of our energy needs for many future decades.

Congress is very good at producing a lot of hot air, but it will not produce a single barrel of oil or one iota of the new energy technologies we need. The seemingly insurmountable problems confronting America’s families and our economy will be more likely to be addressed when voters recognize that their own government, not Middle Eastern sheiks, is causing our energy crisis. Private industry, freed of government shackles, is more than capable of providing America with the safe, clean, reliable, and low cost power our nation needs.

The Legacy of a Great Leader

As the seemingly endless presidential campaign has narrowed to the two major party’s presumptive nominees, some conservative Republicans are nostalgically longing for the Reagan years, and regret that a conservative leader of President Reagan’s stature seems not to have emerged.

President Reagan was an extraordinary leader, and many eloquent voices call him the greatest American of the 20th Century. In her moving eulogy for the late President, Lady Margaret Thatcher pointed out the daunting, historic tasks he set for himself. “Ronald Reagan,” she said, “sought to mend America’s wounded spirit; he sought to restore the strength of the free world, and to free the slaves of communism.”

These she said were “causes hard to accomplish and heavy with risk.” Yet this great, “providential figure” was a man “who knew his own mind, had firm principles, expounded them clearly, and acted on them decisively.” We know that with his unfailing optimism, humor, charm, and persistence under fire, he accomplished all that he set out to do. He won the cold war without firing a shot, and left America and the world far more free, safe, and prosperous.

President Reagan accomplished the impossible and made it look easy. His presidency was very much the culmination of what has been called “the greatest generation.” It was a generation that was forged in the Great Depression, tempered by war, and whose patience, fortitude, and faith was proven through uncertain and dangerous decades when the Cold War’s outcome was far from certain. It takes nothing away from President Reagan’s epic accomplishments to recognize that his great triumphs were the result of service and sacrifice rendered by millions of his generation over the course of their lifetimes.

It is not surprising that in our own difficult day we long for a monumental leader like President Reagan to deal with problems that seem overwhelming. Domestically we are experiencing out-of-control government growth, spending and deficits, growing political support for big government, socialist programs, record costs for oil that not only threaten families, but threaten economic havoc in our nation and throughout the world, a growing trade deficit, the export of American industry and jobs, and the continuing breakdown of the most basic units of civilization, marriage and the family. Internationally we are experiencing a weakened economic and strategic position relative to hostile governments, two costly wars with no end yet in sight, and the constant threat of terrorism with its potential for catastrophic destruction.

These epic threats, like the threats that confronted “the greatest generation,” will not be resolved with one Congress, one presidency, or even one great, historic figure. Overcoming these threats will likely consume the century ahead, and triumphing over them will likely require principled, resolute, and unifying figures like Ronald Reagan to lead the way.

As conservatives and Republicans, we need to remember that the triumph of Ronald Reagan was prepared over decades both by great names and by unknown Americans who were faithful to their present moment, relied on God’s protection, and did what they could, where they were, with what they had. Many did not live to see the great victory to which they contributed, but they share in our triumphs nonetheless.

While Ronald Reagan may have come closer to our ideal of political perfection than any other American in the 20th Century, today we face a choice between two candidates. In that choice, Senator McCain is exceedingly closer to President Reagan than is his opponent. McCain shares Reagan’s love and optimism for the United States and he believes to his core -- and spent over five years of intense suffering in the Hanoi Hilton because he would not renounce these beliefs -- that the US is a force for good in this world. He also believes, as did President Reagan, that individual Americans create our nation’s wealth, build our communities, invent today’s breathtaking new technologies of tomorrow, educate our young, and possess primary responsibility for raising new generations. All of this is in direct contrast to his opponent who believes that these are the responsibilities of nameless bureaucrats working in a labyrinth of government departments, bureaus, and agencies.

Each of us has a God-given role to play in the great epic struggle of our day. In that struggle we need first and foremost to arm ourselves with faith, as though everything depends on God, while we work in our homes, communities, civic groups, and political parties, as though everything depends on us. When we trust in God’s mercy and grace in that struggle, we not only labor to achieve President Reagan’s vision of the “great, shining city on a hill,” we participate in the eventual triumph of good over evil that God has promised to all those who put their trust in Him.

A D-Day Remembrance

Today we commemorate D-Day, the historic allied invasion of Normandy in World War II. This morning my brother forwarded me a letter he received from Captain Mark O'Brien, a close friend of his and a U. S. Navy judge advocate presently serving in Iraq. His letter is so poignant and thoughtful that I decided to publish it in this forum. Captain O’Brien wrote:

"I was thinking of the subject this morning and it occurred to me that D-Day was 64 years ago. When we were born, WWII had ended less than 10 years earlier. Putting that in perspective, Desert Storm, which seems like yesterday to me, was 17 years ago. Seventeen years after WWII was 1962. Our parents’ generation came home from the largest, deadliest, most far reaching war the world has ever seen and by the time I was 7 they had rebuilt the world and acted as if the war didn’t happen. Yet for tens of millions of Americans (who fought in it, worked to support it, lost loves ones to it or just prayed for its end) it had radically altered their lives but they simply carried on without any demands for compensation or claims as victims. They gave our generation and the ones that have followed the most prosperous blessed land God ever graced the earth with. Sadly, today only a handful of people will remember the countless millions of sacrifices made in order for us to enjoy what we have today. So we must remember to say a prayer in thanksgiving for all of those who gave us so much."

Will Anything Last Forever?

In recent weeks workers have been making repairs to our magnificent State House and re-grouting the massive blocks of native granite that form its steps and walls. Our first State House in Columbia, a mere shadow of today’s structure, was originally completed in 1794. The building has been repaired, restored, and enlarged many times, but from its earliest days it has been a monument to our rich and storied heritage and our noblest ideals of freedom and self-government. It is a place where the people rule under the Constitution and the laws they themselves have made. As I observed the workers preserving our state’s most historic building, I was reminded of the poet Shelley’s great sonnet, Ozymandias (see box above).

Shelley tells the story of a once great monument built by the Egyptian pharaoh, Ramses II, to proclaim his power and his belief that the civilization he ruled would last forever. The great temple he built at the center of his realm was even inscribed with a warning to friend and foe: “My name is Ozymandias, King of Kings: Look on my works, ye mighty, and despair!”

Yet this once great monument to an emperor’s power and glory, we are told, now lies “sunk,” “shattered,” and ruined in the desert sands, a “colossal wreck” whose scattered columns remind the traveler that all of man’s greatest works, man himself, and the world in which we live will eventually pass away.

Elected officials who work in grand buildings of state, with their marble pillars, grand hallways, marble floors, glittering chandeliers and fine art can come to think of these great buildings as monuments to themselves and their own vainglory. There is a temptation to believe one is entitled, and that having made it to an exclusive club, one can do as one pleases, rather than what one ought.

Many forget that they are merely the people’s servants and, like Ozymandias, come to believe that the ornate structures in which they work proclaim their own individual greatness, and that while they serve they should also be served. Yet all the ambitions, power, chairmanships, seniority and influence quickly pass away and amount to nothing if the object of one’s labors is mere personal aggrandizement or self-interest.

Our nation and the states that comprise it are unique in the world. They were founded not on the basis of ethnicity, personal ambition, feudal land holdings, or the conquest of one group over another, but rather founded on ideas and the Christian ideals of a pilgrim people. But our most cherished monuments, like those who erected them, will one day surely pass away.

It is proper that we build and maintain monuments to our greatest state and national ideals and to those who lived and died for them. But we should always realize that these majestic structures serve to remind us of who we are, what we believe, where we come from, and like lighthouses, they guide us on our way. And we should humbly acknowledge that even our most enduring structures will one day pass away, just as will the most thoughtfully constructed laws, policies, and budgets ever crafted by elected officials.

A 20th century American commentator said that "a politician's legacy will be hollow indeed, unless his motivation is for a goal and a calling greater than himself." All public servants should consider that solemn thought, look squarely in the mirror, and resolve that their every motive and goal will be to promote the overall public good.

Adorning a kitchen wall in my grandparent’s home was a short poem that I understand better now than I did as a child when I first saw it. The thought-provoking poem, speaking to the days of Ozymandias and to our own day, read:

Only one life, ‘twill soon be passed,
Only what’s done for Christ will last.

Remarkable! It should comfort and encourage us to realize that while granite monuments will crumble and civilizations rise and fall, people can do certain things individually that will last forever.

The Fiscal Impact of Runaway Immigration

Last year Americans responded in justifiable anger against the amnesty proposals for illegal immigrants that some of our federal legislators were trying to force on America’s citizens. Yet the people said “no” for many good reasons – our concern for American sovereignty and our belief that the laws of our nation must be upheld, the unfairness of granting citizenship to scofflaws when so many law abiding people continue to wait their turn, the threat that cheap illegal labor has on American jobs by driving down wages, and, in the aftermath of 9/11, the serious threats that unsecured borders pose to our nation.

At the outset, let me emphatically state that I am not opposed to immigration. I am opposed to illegal immigration. We are a nation of immigrants. But immigration must be managed in accordance with our established laws! Every country has a sovereign right to regulate its borders and surely our country does as well.

It concerns me that many do not consider the enormous financial costs that out-of-control immigration imposes on local, state and federal governments. An extraordinary new study on the costs of legal and illegal immigration, “The Economic and Fiscal Impact of Immigration” by Edwin S. Rubenstein, reveals the staggering costs of this crisis and the massive hidden burden it imposes on every American taxpayer. The study analyzes the costs to fifteen federal departments and agencies. Yet as shocking as these findings are, they are only part of the story, because the study does not include the enormous costs to local and state governments.

Rubenstein points out that the U.S. has 37 million legal and illegal immigrants that cost U.S. taxpayers last year more than $346 billion. This means that U.S. taxpayers are providing on average more than $9,000 annually to each immigrant or $36,000 for a family of four. These costs imperil our economy and our nation and they affect virtually every aspect of our national life.

Since most immigrants don’t speak English, 3.8 million children of immigrants enrolled in K-12 schools require special classes and the hiring and training of specialized teachers with annual costs estimated at $1,030 per pupil, or $3.9 billion. In the next few years, immigration will consume the entire planned increase in spending for public schools.

The U.S. Department of Health and Human Services provides $250 million annually to help hospitals cover part of the costs of providing emergency medical treatment to illegal immigrants, but costs to the hospitals are far greater than the federal reimbursement and as a result some emergency rooms and hospitals have been forced to close.

Our federal prisons house 267,000 criminal aliens in an already overcrowded system. As a result of overcrowding, many dangerous criminals who otherwise should be securely locked-up are out among us.

The Federal Housing Administration has encouraged home ownership among low-income immigrants by requiring down payments as low as $200 to $300. Since these buyers have virtually nothing invested, they often walk away when they can’t meet their mortgage payments, resulting in blighted, abandoned houses and neighborhoods, and high foreclosure rates that threaten our economy.

This entire enormous tab, paid for by the American taxpayers, is increasing while the former Federal Reserve chairman Alan Greenspan and many federal representatives in the House and Senate are calling for even higher levels of immigration. Greenspan has said that “significantly opening up immigration to [more] skilled workers solves two problems: Companies can hire educated workers they need. And those workers would compete with high-income people, driving more income equality.”

What this really means is that salaries are being depressed for skilled American workers who will now be forced to compete with a flood of foreign competitors in our own country. American workers are being squeezed, but by whom?

Nearly half a century ago, President Eisenhower, who had been a great military leader, warned Americans of an emerging “military-industrial complex” that even then was seen to be threatening our national sovereignty. In the past year we have seen the enormous power and influence that modern day transnational corporations, with no allegiance to our nation, wield over the decisions of many of our elected representatives.

Time and again the American people have insisted that we want our borders secured and illegal immigration stopped. Yet time and again, through parliamentary maneuvers, last minute amendments, and their own singular determination, many of our elected representatives have sought to give amnesty for illegal immigrants already here, while doing little or nothing to stop this destructive growing tsunami.

America is at a crossroads. Will we allow our businesses and industries to be deported and our people reduced to a mere labor pool for transnational corporations, or will we continue as one nation, under God, the shining city upon a hill? The choice is ours to make.

Several roll call votes on this issue make clear which of our representatives are working for transnational corporations and which are working for “we the people.” It is our civic duty to take notice of who’s who and wield the power we still have at our polling places to literally reclaim our country.

Are We Becoming a Nation of Financial Illiterates?

Because of “Tax Day,” April is a month when many people take stock of their finances. Unfortunately, it is also a grim reminder for many citizens that their personal finances are in trouble. Our personal habits for saving, borrowing and spending not only have a big impact on the well-being of our families, they affect the health of our state and national economies, and even our national security. With this in mind, many community leaders are increasingly involved in efforts to ensure that America’s students have the sound financial literacy skills they will need to be successful in life.

Sadly, America’s lack of personal financial literacy has helped to create some very serious problems in our nation, from massive borrowing and personal debt, the sub-prime mortgage crisis with resulting home foreclosures, trade deficits, our national debt, the large number of people who file for bankruptcy, and high taxes to finance the “safety net” provided for those in economic trouble.

Recognizing that the financial readiness of our youth is essential to their well-being, Governor Sanford proclaimed this past month as “Financial Literacy Month.” And 48 affiliated state groups have organized with nearly 200 major companies under The Jump$tart Coalition to teach the basics of personal finance in schools and to provide educational materials for teachers, parents, and civic groups to use in that effort. The Jump$tart Coalition has also teamed with the Federal Reserve Board to conduct a biennial national literacy survey of America’s students. Results of the most recent survey were just released, and they are disappointing. Among the findings for high school seniors:

• A mere 48 percent correctly understood that a credit card holder who pays only the minimum amount on monthly card balances will pay more in annual finance charges than a card holder who pays the balance in full;
• Only 17 percent correctly answered that stocks are more likely to yield higher returns than savings bonds, savings accounts, and checking accounts even though there has never been a significant period of time where this hasn’t been true; and
• Just 36 percent correctly answered that a house financed with a fixed-rate mortgage is a good hedge during periods of inflation, down from 45 percent who understood this concept in a similar survey two years ago.

In 2005, Governor Sanford signed legislation requiring that the State Board of Education adopt curricula, materials, and guidelines for local school boards to use to implement financial literacy instruction. The legislation requires that this initiative be overseen by a “Financial Literacy Initiative Board of Trustees” that is tasked to improve the financial literacy of SC students in grades K-12. Under state curriculum standards, students are to be given basic instruction in personal finance, the structure of our economic system, an overview of our banking and financial institutions, credit management, and the stock and bond markets.

As with much that we look to our schools to teach, results are spotty at best. But this is an area where retired business leaders, local businesses, business organizations, and civic and community groups have a great opportunity to work with teachers to ensure that students have the basic personal financial tools they will eventually need to be successful in life. Schools should take advantage of the vast experienced volunteer resources that exist within their own communities. Best of all, schools can do so at no additional cost to the taxpayers.

Financial literacy is as important to the future of every student as good reading, math and language skills. Ensuring that every student graduates with basic financial literacy could not only help our economy, lower our tax burden, and result in fewer families in economic distress, it could also prepare young Americans to be more responsible and informed voters who understand the importance of property rights and free enterprise as essential underpinnings of the freedoms that Americans enjoy. Let’s make financial literacy a goal for every American family. As Governor Sanford has proclaimed, “improving financial literacy for the residents of the Palmetto State helps strengthen our families and communities and ensures our continued success in the global marketplace.”

Three Tools for Good Citizenship

After accounting for all government revenues and expenditures, perhaps the greatest responsibility that I have as South Carolina’s Comptroller General is to ensure that our citizens, their government representatives, the media, and the financial markets have clear and easily understood information about our state’s financial activities and performance.

State government will spend more than $20 billion this year generated from taxes imposed on the citizens of South Carolina. Every dollar coming in and going out must be correctly accounted for. Voters must know how their elected representatives are spending their money, and legislators must have clear and reliable information about revenues, expenses, and trends so that they can make informed decisions. Since media representatives have the daily responsibility of reporting on the activities of government, they need information they can easily understand and incorporate into their reporting. And just as credit bureaus are continually determining the credit worthiness of each of us based on our history of paying our bills on time, financial markets are assessing the soundness of our state’s finances and credit worthiness each time state government seeks to borrow money.

The Comptroller General’s Office is responsible for ensuring that every department of state government correctly accounts for revenues and expenses, and we summarize and publicly report that information. National associations regularly evaluate how well we report this financial information to those who use it.

I am proud that South Carolina is annually awarded a Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association for our “Comprehensive Annual Financial Report” or CAFR. Our CAFR is an accountant’s dream, because it is a detailed report, numbering nearly 250 pages, loaded with highly technical information that accountants love to read and discuss. We complete and distribute this major report by Thanksgiving each year, much sooner than most states, for the fiscal year that ended the previous June 30. We not only receive commendations for the professionalism and thoroughness of our CAFR, but we are commended consistently for its timeliness because we produce and distribute it sooner than nearly any other state.

This past January we issued an entirely new report called a Popular Annual Financial Report or PAFR. We prepared this very readable and understandable 16 page report for the benefit of our citizens who are not accountants but who are interested in learning more about state government’s performance. Our PAFR reviews the state’s economy, focuses on key financial highlights, and looks at numerous programs and services like highways, prisons, state parks, education, and the state lottery. To date, only a few other states have produced similar reports, although many are now considering doing so. South Carolina is among the leaders in this pioneering effort.

The Association of Government Accountants (AGA), a respected national organization, is working to improve government accountability with better “citizen centric reporting,” that is, meaningful information about the financial condition and performance of government that can be easily understood by the average citizen. The AGA recently challenged our state to prepare a “citizen centric” annual report that would be even more streamlined and understandable than our new 16 page Popular Annual Financial Report.

South Carolina soon will be one of the first states in the nation to provide “A Report to Our Citizens” based on the AGA’s helpful guidelines. Our newest and most readable report is prepared as a four page pamphlet, and it provides citizens with simple charts and statistics on changes in our population, employment, per capita income, public school enrollment, number of state government employees, revenues and expenses, major developments in state government finances, and future challenges.

All three of these reports, ranging from very detailed to very summarized, will be available on our website at www.cg.sc.gov. I ask South Carolinians to email or call me with any questions or suggestions about these reports or any other aspect of the state’s finances.

It is important that we all take greater responsibility for what government does, to hold our elected representatives accountable for spending our money, and to remember that ultimately government is of, by, and for “we the people.” I’m committed to making government more and more transparent and accountable, and I believe these three important reports about state finances will be essential annual tools for good citizenship and conscientious voting. As the great World War II General Omar Bradley once reflected, “If you will help run our government in the American way, then there will never be danger of our government running America in the wrong way.”

Cost of Posting State Agencies' Spending Online Overstated

(The following was published in the Commentary section of The Post and Courier on April 3, 2008)

By Richard Eckstrom

State government spending has grown tremendously over the last several years, and the public realizes that personal income levels have not grown anywhere near as fast as government spending. For example, spending by state government jumped twelve percent last year, yet the average South Carolina family’s income rose by just four percent. Clearly, government spending is out of touch with the economic realities faced by ordinary citizens.

Taxpayers deserve to know where that money is going. The General Assembly is now considering legislation that would require state agencies and local governments to post their check registers and credit card statements online. This proposed legislation, if enacted, would make it easy for citizens to see for themselves exactly where their tax money goes. In turn, this could expose wasteful spending and remind state agencies and employees that they ultimately answer to the people they serve. This is exactly the kind of common sense, good government proposal that no one should oppose. Many may not realize that the Comptroller General’s office has already implemented a similar system – at no cost to state agencies – that makes expenditure information for most state agencies available via an easily accessible website.

Agency compliance with any additional online data posting required by the proposed legislation could be implemented in most cases without costing the taxpayers a dime. Yet a recently released “fiscal impact statement” obtained by the General Assembly dramatically overstates the cost of implementing this proposal. Misinformed or biased “number crunching” only confuses lawmakers and gives governments an excuse not to make their spending available to the public.

According to initial cost estimates for implementing this proposed legislation, the state would need as much as $5 million to fully implement an online check register and credit card database. These estimates, provided by a few assorted state agencies, are simply not credible to me. In fact, I already provide spending information on more than 70 state agencies via a website at absolutely no additional cost to taxpayers. The proposed legislation would simply require local governments and the remainder of state government to follow suit.

I am told that some officials are already using the dramatically inflated cost estimates as political cover. They are arguing that it is a waste of taxpayer money to inform taxpayers how their money is spent.

Most state agencies are already in compliance with the proposed law, whether or not they realize it. The majority of state agencies already report their finances to my office for me to process their check payments and in turn I summarize and electronically post their spending information on the state website. The entire program costs taxpayers nothing.

State agencies exempted from reporting to my office now maintain their own similar financial databases that they could make available, if they wanted to, via the Internet at virtually no additional cost, simply by using the same type search engine that we are already using.

Otherwise, school districts and county and municipal governments would be able to comply with the proposed law simply by scanning their check registers and credit card statements onto a computer and posting their scanned files to their agency’s website. Keep it simple. Require each governmental entity to decide the easiest and least expensive route to comply with the proposed legislation.

But rather than taking this common-sense approach, some are lamenting that a vast network of new computers, databases and new employees will be necessary to manage an imaginary new bureaucracy. It is the usual ploy. If the costs to implement can be inflated, they think that maybe they can make go away these efforts at implementing more and better government transparency. But let’s be clear – their inflated cost estimates, which are awfully flimsy, are the only thing shielding lawmakers from the justifiable anger of the voters if this proposed legislation fails.

This typical big-government mind-set, that an entirely new bureaucracy is required to reinvent the wheel, is bogus. The real facts are clear. The majority of government agencies essentially already comply with the proposed bill. Those that don’t comply have a no-cost, or very low-cost, example to follow. Complying is simply a matter of being willing to make it happen.

The technology exists today. The infrastructure exists today. My office will assist any state agency with the transition to transparency. State lawmakers should welcome the chance to shine the sun on state spending and to invite the public into the vaults of government data. It should not cost them a thing to do so. And if they do not, the public would be justified in asking what it is their elected officials don’t want taxpayers to see.

Richard Eckstrom, a former Certified Public Accountant from Greenville, is the Comptroller General of South Carolina and one of the five members of the State Budget and Control Board. He served one term as State Treasurer and was re-elected in 2006 as Comptroller General.

South Carolina’s New Spending Transparency Website

This blog has often pointed out that well-funded, special interests in our state often have their way with policy, budgets, taxes, and spending, while the best interests of “we the people” can sometimes be overlooked. Sound fiscal management, balanced budgets, and even ensuring that jobs in South Carolina are only filled by those legally entitled to work here, shouldn’t be controversial or partisan issues. Unfortunately, some legislators know that we as private citizens are not organized, do not have highly-paid lobbyists in Columbia and Washington working for us, and are often too busy earning a living and looking after our families to pay attention to their mischief, or to even notice whose interests they are serving.

To help citizens oversee what government is doing, and to make it easier for each of us to hold our government officials accountable, I am very pleased to announce a new website that Governor Sanford and I have created that will provide a greater degree of information about how our tax dollars are being used.

Our new spending transparency initiative, available by clicking the flashing link at www.cg.sc.gov, contains information provided by my office on all funds expended by state agencies. This information covers travel expenditures, purchases of office supplies over $100, and spending for contracts over $100. The information is reported by agency, and it will be updated monthly.

Because it is budget time again in Columbia, the need for more transparency and accountability could not be clearer. For example, some in the Legislature have proposed borrowing $100 million from our Medicaid program’s reserve fund. Instead of saving that money for economic down times when revenues are low and demand for Medicaid services are high, some of our legislators have decided they want spend that money on non-essential projects in their districts.

As Governor Sanford has pointed out, “revenue growth is essentially flat, and the state is dealing with a $270 million budget hole created by budget writers paying for ongoing expenses with one-time money last year.” Yet our legislators are digging an even deeper hole of debt for hard working taxpayers to fill by adding another $179 million this year in one-time money to pay for ongoing expenses. This is being done at the very time when it appears our nation is about to experience a serious economic downturn. This habit of ignoring our day of financial reckoning guarantees that South Carolina’s budget crisis will be even more painful next year and in future years.

I’ve been working to open the curtains on government spending since I came into office because taxpayers have a right to know how their tax money is being spent. We’ll keep working to make this information even easier to access and as always, I would welcome your suggestions as to how we can make government finances even more transparent. If we all work together, vote responsibly, and hold our representatives accountable, we can build a more prosperous South Carolina, with a sound economy and greater opportunity for our children and grandchildren.

It’s your money being spent. And you have every right to know how it’s being spent. Please let me know whether you find this new web-based information helpful.

SECURING THE HOME FRONT

It is becoming clear to many Americans that the cost of our federal government’s reluctance to enforce immigration laws, to secure our borders, and to ensure our national security and the safety of American citizens, affects every facet of American life.

The Center for Immigration Studies estimates that the net public cost for providing illegal immigrants with services like Medicaid, food assistance programs, our federal prison system, our court systems, and public education exceeds $10 billion annually.

Some states are recognizing the enormous costs and threats this problem poses to our American way of life. Many states recognize that employment is the most common incentive for illegal immigration to the United States, and some are beginning to hold scofflaw employers accountable for aiding and abetting criminal behavior. There is also growing awareness that those that hire illegal aliens are discriminating against U.S. citizens and legal resident immigrants. In response, some states are taking greater responsibility for addressing the crisis.

Arizona, Nevada, Oklahoma, Tennessee, Georgia, and West Virginia have enacted tough new laws requiring or encouraging employers to verify every job applicant’s legal status using a federal data bank. These states have also imposed tough new sanctions on employers, including a progressive penalty system for those found guilty of hiring illegal workers. Arizona will permanently revoke an operator’s business license for a second offense. As a result, states that have been aggressively implementing new laws have dramatically reduced costs and problems, as illegal aliens have moved back home or to other states.

There are an estimated 76,000 illegal aliens in South Carolina, costing our taxpayers $87.4 million annually for education alone. Between 2000 and 2006, South Carolina’s K-12 student enrollment increased by over 34,000 students, and is projected to increase by a similar number by 2015. This increase will, of course, result in the need to build many new schools. But that’s just one small part of the toll this crisis presents our state.

Consider our transportation systems. Increased traffic congestion results in slower commute times, greater fuel costs, and more need to repair and build roads and highways. The SC Department of Transportation already has a $5 billion maintenance backlog. The illegal wave that’s flooding our state and nation also increases problems with air quality and solid waste disposal, requires additional low-income housing, dramatically increases costs for many of our hospitals and clogs their emergency rooms, and stretches capacity while increasing costs for law enforcement.

Despite these added costs to taxpayers, threats to national security, discrimination against hardworking citizens and legal immigrants, and threats to our personal safety, when our state Senate recently had the opportunity to address the problem, it yielded to special interests that seem driven by a desire for low-cost labor. In response to overwhelming support from the citizens of our state for tough, meaningful reform, the Senate passed a bill so loaded with loopholes it would accomplish little.

Fortunately, our state House of Representatives passed stronger legislation that would hold employers accountable for aiding and abetting the criminal act of invading our country and claiming a job rightfully belonging to a legal citizen. The House and Senate bills have gone to a “conference committee” to hammer out differences, and there is hope that the provisions in the stronger House bill will prevail.

It is disappointing that many elected officials would not only put the interests of special interests above the welfare of the citizens of South Carolina, but that they would do so on matters that concern the very security and survival of our state and nation. If they would do so on matters like this of such enormous cost and importance to the safety and security of us all, think of how ready they must be to put our interests below those of special interests on so many lesser matters.

This issue emphasizes again the need for every patriotic South Carolinian to know what is happening in our state, to speak out on the issues of our times, to hold our elected officials accountable, and to ensure on Election Day that those we elect truly do represent “we the people."

An Economic Stimulus for Whose Country?

We know it is an election year when the U.S. Congress votes to send us all a check. Several weeks ago the Congress approved and President Bush signed legislation granting $150 billion in tax rebates with the stated intention of stimulating the U. S. economy. According to the Internal Revenue Service, “starting in May, the Treasury will begin sending economic stimulus payments to more than 130 million individuals. The stimulus payments will go out through the late spring and summer.”

Much as we all appreciate the unexpected rebate of even a small portion of our federal taxes, past experience indicates that were our national leaders truly interested in the long-term health of our economy, rather than pleasing taxpayers in an election year, they would sharply cut taxes and make it more profitable to work, save, and invest.

As one presidential candidate asked, whose economy are we stimulating when the U.S. government borrows $150 billion from China to give $600 to each taxpayer so that they can purchase goods made in China?

A recent paper published by The Heritage Foundation states that “tax rebates fail, because they do not encourage productivity or wealth creation. To receive a rebate, nobody has to work, save, invest, or create new wealth.” It also pointed out that “every dollar that government rebates ‘inject’ into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another.”

This is not mere speculation on the part of The Heritage Foundation; it points out that the “quick fix” of random tax rebates has been tried before, in 2001, and “had little economic impact.” On the other hand, the tax rate cuts of 2003 were effective because they “were designed to increase market incentives to work, save, and invest, thus creating jobs and increasing economic growth.”

It should not be surprising that those countries that suffered most severely from the deadening hand of socialism are today experiencing vibrant growth through flat and low taxes. In fact, every flat-tax country, except Hong Kong, is a former Communist nation. In Eastern European countries like Slovakia, rich and poor alike pay a 19 percent tax on their incomes, and their economies are growing faster than the rich Western European countries, where many companies now are considering moves to the East.

What is most extraordinary is that while many in the U. S. Congress continue to focus on class envy and socialist redistribution schemes, the country that suffered most from the Marxist nightmare has implemented a 13 percent flat tax rate, four percentage points lower than the most ardent flat tax supporters in our country have requested. Since adopting the flat tax, Russia’s economy has grown by 10 percent, which exceeds growth in the United States and Western Europe during the same period. Hong Kong has had a flat tax for over 50 years and is the world’s fastest growing economy. There are even signs that China may follow Hong Kong’s example.

The recent rebate approved by Congress brings to mind a quotation often cited by President Reagan:

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship."

In our land of freedom, free enterprise, and opportunity, we should relearn the principles that made our nation the great arsenal of democracy, the principles that those so recently enslaved by socialism have learned through their bitter trials. Low taxes succeed because they reward work, encourage savings, and provide the investments that lead to new jobs and economic growth. The cynical quick fix, given in an election year, may help pay a few bills, but in the long run it only deepens our national debt and does little to improve America’s economy.

To Fix Our Schools, Let’s First Fix Our Testing System

It often seems that one of the reasons South Carolina ranks last among the states in student achievement, as measured by SAT scores and the state graduation rate, is because our education officials are so preoccupied with matters that relate only marginally to the academic success of students in the classroom.

Under an accountability plan that our state education leaders negotiated with the federal government, in return for federal funds under The No Child Left Behind Act of 2001, not a single school district in South Carolina met federal yearly progress targets last school year. Furthermore, only 37 percent of schools in the state made “adequate yearly progress” toward the agreed-upon goal that all students will score proficient or higher in English, math and science by 2014. Even more disturbing, state education leaders have said that these numbers will only get worse.

Instead of devoting our full attention and all of our resources toward ensuring that every student achieves at his or her maximum ability, our state holds the “distinction” of being the only state in the nation to own and operate its own school bus fleet. Ours is also one of the few states in the nation that administers its own testing system that we’ve named the Palmetto Achievement Challenge Test (PACT). This test diverts vast resources and attention from what should be the focus of our educational establishment, and by any standard it fails to provide timely and useful diagnostic information that would actually allow teachers to better understand and address student performance.

Most states purchase commercially available achievement tests from companies with the professional and scientific expertise to administer tests customized to individual state standards. Unlike those national achievement tests that provide diagnostic information about individual students within a few days, our PACT results are only available long after students have moved on to another grade. Also, the PACT does not provide diagnostic information about individual students, nor does it allow us to compare our students’ achievement with their regional and national peers.

In recent years we have spent approximately $65 per-student administering the PACT, while most states obtain far more useful information for under $10 per-student. In addition to many hidden costs of administering the PACT, such as field-testing possible questions, our state spends over a half million dollars on salaries tied to the test, while districts are forced to additionally spend tens of millions of dollars to purchase the national diagnostic tests in order to obtain useful information about individual students.

Many dedicated teachers complain about the time lost in preparing for and administering tests. It is particularly unfortunate to waste valuable time preparing for and administering a test that does nothing to help us understand and address the education crisis in our state. It often seems that many of our state’s education leaders are more focused on hyping the results and masking the failures of the status quo than serving the teachers, families, and students in our state.

Before the crisis can be addressed and our education problems fixed, we need to implement a testing system better than the PACT that will allow us to diagnose the problems, great as they may be, and ensure that every child is receiving all the help he or she needs to realize his or her God-given potential.

To do justice to our students and their teachers and to focus our efforts where those efforts are needed, it’s time we turn over school bus operations to those who understand the transport business -- and its time we turn our student achievement testing over to those national companies that are expert in the field.