SENATORS UNVEIL FISCAL IMPACT FOR 2009 EDUCATION OPPORTUNITY ACT*

*April 2, 2009* – State Senators David Thomas and Kevin Bryant joined former S.C. Revenue Director Burnie Maybank today in unveiled a dynamic fiscal impact analysis for the 2009 Education Opportunity Act, South Carolina’s new parental choice legislation.

“This bill is about helping all students – and all taxpayers,” Sen.

Thomas said. “It’s also about giving public schools more resources per child. As a longtime, passionate supporter of public education in South Carolina, I believe that we have an obligation to do both.”

“We have to stop pretending that these goals are mutually exclusive, and we have to start recognizing that you can be for parental choice and for public education at the same time,” Sen. Thomas added. “Who can be against simultaneously empowering parents and freeing up more money per child within the public system?”

“Our school system is failing far too many children.  We have to try something new, and the good news is that we can do that in such a way that saves the state money and lets our public schools have smaller class sizes and better student-to-teacher ratios,” said Sen. Bryant. “When you put the goal of the individual child – not the individual bureaucracy – first, this proposal is a no-brainer. It’s only when your concern is more for the administrative functions that you start to see opposition.”

According to Maybank’s analysis – which unlike previous BEA reports factors a reasonable average private school tuition rate and a conservative demand estimate – the Education Opportunity Act would save S.C. taxpayers $5.4 million its first year.

“I have used the BEA numbers,” Maybank said. “What I have done, however, is used a dynamic model to reach more accurate conclusions.”

Today, the South Carolina Policy Council unveiled a study: “The Economic Impact of Federal Spending on State Economic Performance: A South Carolina Perspective. This project was done in cooperation with Arduin, Laffer & Moore Econometrics. Remember Dr. Arthur Laffer was Reagan’s chief economist. The findings?  The $700 million stimulus that Gov. Sanford has refused would have resulted in job losses for South Carolina; specifically 23,800-34,850 additional jobs lost.

Here are a few highlights. Click to see the full report.

Federal government spending comes with a cost to the private sector, ether higher taxes today or more borrowing which produces higher taxes later.

Total government expenditures relative to the private economy appropriately measures the burden created by total government spending. The government expenditure wedge (GEW) is defined as government expenditures divided by net domestic business output. *(the lower the better)

Increase in Government spending results in an overall downturn in the economy. Examples

–Between 1950 and 1965 GEW was low (32.4%) later it grew 5.5%. Private sector expansion was 3.6% per year.

–Between 1965 and 1983 GEW rose to 49.0% private sector slowed to 2.5%

–1983 – 1988 GEW fell to 45.7% and the private sector grew to 5.1%

–(continues trend GEW up = Private sector down see page 2)

Result: Accepting federal dollars causes a slowing in the private sector. 1.7 million jobs lost in US + 23,800 – 34,85 additional jobs lost in SC.

No such thing as a free lunch.

-More government spending creates lower private sector –

-Lower private sector produces higher unemployment –

-Higher unemployment creates more unemployment benefits.

-THEREFORE –

-More government spending creates greater costs to states in unemployment benefits.

Government spending directly produces higher state taxes.

After the stimulus bill the SC GEW will be 61.0%

Conclusion:

The Stimulus plan will be detrimental to SC, causing a slowing in the private sector, higher unemployment, higher state spending and  higher state taxes.

Good Friday Prayer Breakfast 
Friday April 10, 2009 
6:30 am at the Boulevard Baptist Church
Community Activity Center 
Rev. Jim Reimann 
Editor of “My Utmost for His Highest” 
“Look unto Me”  
Join us for a Resurrection Celebration