On Friday, Aug. 14, I closed the state’s books for the recently-concluded fiscal year. To put it simply, the picture is bleak.

State government overspent its general fund budget by $98.2 million for the fiscal year that ended June 30, 2009. Actual revenue collections were $1.2 billion less than the estimates used to form original spending plans. As South Carolina’s economy deteriorated and estimated revenues failed to materialize, midyear spending cuts and other actions lowered the amounts state agencies were authorized to spend by $974.7 million. In the end, however, these revised estimates were still too optimistic, resulting in $98.2 million of excess spending even after exhausting the state’s Capital Reserve Fund (using the entire $133.2 million) and General Reserve Fund (using the entire $108.1 million).

The fact that the state overspent by nearly $100 million once again underscores the need to re-examine the prevailing philosophy about spending, and to close the gap between what we spend and what we can afford. We must commit to the idea of setting priorities ­— identifying those things state government should do, and doing them well, but resisting the urge to spend on things that are unnecessary or can be delayed until better economic times.

The need to rediscover the notion of setting priorities and living within our means is best illustrated by recent actions in Washington, where Congress and the White House continue to increase spending in the face of record-shattering deficits, and expand government far beyond its intended limits. In the process, they’re extending mountains of debt far into the futures of our children and grandchildren.

But the problem goes deeper than just “spending what we don’t have.“ It’s about our view of the proper role of government. We simply can no longer try to be all things to all people.

Washington can’t seem to get its act together… which means we have an extra obligation to instill fiscal discipline here at home. At a time when tax dollars are scarce, and the demands on them increased, it’s more important than ever that we use restraint with public money.

The challenges we face in South Carolina are great. We must grow our economy, improve education, reduce the tax burden and continue to find ways to make government operate more efficiently. Perhaps improving our state’s fiscal health is an important key to reaching these goals, realizing our full potential and moving South Carolina toward a brighter future for all of us.