SC BUDGET OVERVIEW – Legislative Update

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By Shannon Erickson

The South Carolina House returned to Columbia last Wednesday to address the Governor’s 34 line-item vetoes for the $6 billion fiscal year 2011-2012 State Budget. 
 
We rolled up our sleeves, drafting a balanced, conservative spending plan focused on restraining government growth, funding core functions of government, responsibly paying down debt and increasing our rainy day reserve accounts. As noted by Governor Haley in her press conference Tuesday, there is “no pork included in this year’s budget.” I appreciate Governor Haley making note of the fiscal restraint used by lawmakers during this budget process and her focus on capping state spending — an issue that House Republicans have championed, passing spending limitations bills six times, including passing the Spending Limitations Bill (H. 3368) just this past March. 

This budget DID come in well below proposed growth caps — in fact it was tens of millions of dollars below growth caps. The State Budget falls under this spending cap because we made priorities of setting aside and not spending unprecedented appropriations for items such as debt repayment, and increasing rainy day reserve accounts. It must be made perfectly clear:  Paying down debts and increasing reserve accounts do not constitute “new spending” or “government growth”. In fact, it is quite the opposite and helps ensure financial solvency for South Carolina.

Some of those budget items include:

• $146 million to unemployment debt repayment;

• Up to $261 million which fully funds increases to the General Reserve Fund five years ahead of schedule;

• $104.8 million dedicated to an additional back-up reserve account;

• $198.6 million to fully fund general obligation bond payments.

To view all vetoes and results, go to www.schouse.gov and pull up the House and Senate Journals.

By cutting taxes and working against government growth, the SC House has worked hard to ensure that South Carolinians have the lowest state taxes in the nation per capita according to the Tax Foundation, a well-known conservative think tank. 
 
Taxpayers can rest assured that I will continue to work to slow government spending, core function prioritizing and continue the same responsible budgeting practices that have delivered over $20 BILLION in tax relief to hard-working South Carolina families.
 
We took the bull by the horns this year and focused spending on core government services – items crucial to the current and future prosperity of South Carolina were made a priority in this budget. Education funding, the safety of our students, job training, law enforcement education, and emergency preparedness are all vital services of government and were adequately addressed. 
 
The SC House sustained 8 of 34 Governor’s vetoes. The SC Senate received 26 vetoes and sustained 1 veto. The SC Senate was in line with the SC House with the exception of Veto 1 which they sustained. To view all vetoes and results to: www.schouse.gov and pull up the House and Senate Journals.

 

Key Overrides:

The Arts: Both the House and Senate overrode Governor Haley’s $1.9 million veto of the state Arts Commission. The vote was 105-8 in the House. This is an economic development issue – it means jobs and a cultural environment that invites companies to locate to S.C. A new USC Moore School study shows the arts contribute $9.2 billion to the state’s economy and supports more than 78,000 jobs. The arts also produce $570 million in tax revenues for SC. Additionally, we recently re-structured the Arts Commission and I felt that we should be fair and allow time to see if their new operational mandates pushed more of their funds to local levels where they make the most impact. (LA Times story)

 

ETV: Earlier in the budget process the Governor agreed to a plan to pay ETV for services rendered to the state for its services to our public schools, law enforcement training and emergency services. When we received the budget vetoes, it became clear that Governor Haley had not held to that agreement and in fact, vetoed over 60% of ETV’s budget. House Majority Leader Kenny Bingham stated, “The governor’s office had asked us to do this very thing and now turned around and vetoed it.”  I heard from many constituents who support ETV’s involvement in educating students, law enforcement training, emergency services, and making the General Assembly sessions transparent for all to observe.  With a plan in place to re-structure the operations and cost of these valuable services to our state, the House over-rode this veto. To understand more about ETV, WATCH THIS VIDEO.

 

Elections: Believing elections are a core government function, the House and Senate voted to allow the State Election Commission to operate and help pay for the 2012 Republican presidential primary. Democrats, whose party does not plan a primary next year, asked Republicans to turn the budget rule into permanent law so that it applies to future presidential primaries, no matter the party. The State Election Commission has about $680,000 on hand. Total cost of the Primary is expected to be $1.5 million.

Education: The new budget includes $12.4 million for school buses, $20 million to deal with flaws in the statewide school funding formula and $56 million in additional per-student spending. The per-student spending will increase to $1,880 up from current $1,615 of the previous year and amends the formula in a way that will boost future funding for local schools. The proviso stipulates that if a school district does not receive funds by the Education Funding Act formula, it automatically will receive 70 percent of the lowest allocation awarded.  This could mean about $630,000 next year for the Beaufort County School District. Additionally, the General Assembly directed that about $45 million of one-time aid to school districts go to students with disabilities.  Beaufort County should realize about $1.3 million from those funds.

Reserve Account: We overrode the veto of the $107 million reserve account that includes areas of economic development, tourism advertising, job training and maintenance. There are critically needed funds in this account, particularly for economic development throughout the state. Since the Governor did not use her line item veto authority for this portion of the budget, the majority of the House felt that vetoing the entire reserve account would have been incredibly damaging. If the Governor had given us vetoes on specific lines, a more thorough consideration could have been accomplished.  Issuing a veto of the entire reserve account, required the General Assembly to quickly over-turn the veto.

The House has adjourned until July 26th when we will return to debate the congressional district map plans currently at odds between the House and Senate.  As we begin this interim, I will continue work on the House Tax Task Force which was appointed by the Speaker to offer tax reform suggestions to the SC House, participate in various local and state committees and functions, while providing constituent services and promoting several bills that are either sitting in the Senate or languishing in committee.  I am always open and appreciative of my constituents needs and issues and value your input.
 
If you know of someone who wishes to receive my Legislative Updates, please forward their email to me and I will add them to our list.
 
It is an honor and privilege to serve you as your Beaufort voice in Columbia.  I wish everyone a happy and safe summer!