Critic says Charleston County library expansion amounts to 'debt financing'
In 2014, Charleston County voters approved a ballot measure that raised taxes to provide the Charleston County Public Library (CCPL) $108 million for the construction of five new libraries, in addition to 13 renovations throughout other county libraries.
As the CCPL embarks on that construction program, however, it finds itself with $9.6 million of red ink (as of its 2016 financial report) on the books, due largely to a growing pension liability with the South Carolina Retirement System.
Barton Swaim, communications director for the South Carolina Policy Council, said what the CCPL is doing amounts to "debt financing," and expressed skepticism that the library should continue with its expansion while facing such a growing pension crisis.
"Governments should use debt financing, if at all, for core necessities – and only as a last resort," Swaim said. "Others may feel differently, but building and expanding libraries doesn’t sound like a core function of government to me."
According to its 2016 report, the Charleston County Public Library is $9.6 million in debt. File photo
To be sure, the CCPL isn't the only South Carolina government entity facing pension issues. The state's retirement system had a deficit of $21 billion in 2016.
During the most recent session, Gov. Henry McMaster signed legislation that will increase the contributions that public employers make to pensions and decrease the individual employees' contributions. The new law would mean that employer contributions to the state pension fund will rise from 11.56 percent of an employee’s aggregate salary to 18.56 percent over the next six years.
State Sen. Tom Davis (R-Beaufort), who voted against the pension measure, has continued to criticize the new law.
"If the proposal becomes law, government workers would contribute an additional $42 million a year to their retirement system, while taxpayers would pay an additional $827 million a year," Davis wrote in an April 24 Facebook post. "The bill does not amend the pension plan's structure so as to require new hires to participate in a defined-contribution plan, and both current and future employees would continue to have the right to participate in a defined-benefit plan."
The law could also mean that the CCPL's debt issues continue to worsen at a quicker rate. With the construction/expansion project meaning more and bigger libraries, the CCPL will likely need more workers to staff the locations. More workers equal more pensions, which would take the long-term project costs well beyond the CCPL's estimated $108.5 million for construction and renovation.
If that's the case, the Charleston County voters could be shouldering a much larger cost than they bargained for when they voted for the tax increase in 2014.
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