S.C. House Republicans are holding up the states $6.7 billion general fund budget because it does not include a $64 million tax cut that they say will help small business owners.
House and Senate budget writers met for the first time in a week Monday in an attempt to break a logjam over the budget for the states fiscal year that starts July 1. But all they could agree on was $200,000 for a statewide program to eradicate head lice and an indirect way to pay for S.C. ETVs operations, funneling money to ETV from state agencies that use its services.
Lawmakers took a recess without scheduling another meeting.
I dont think were anywhere close to reaching an agreement, said state Sen. Hugh Leatherman, R-Florence, the Senates lead budget negotiator.
Some 50,000 state workers are waiting to hear what their salary will be July 1. And the states 46 county councils, whose new budget years start in 11 days, dont know if they will get a $40 million increase in state money or a $10 million increase the difference in which could stave off proposed tax increases in some counties.
Monday, it was clear negotiations on both of those issues had stopped, with House Republicans drawing their line in the sand on the tax-cut proposal.
I dont think anything is going to happen until the small-business tax is agreed upon, said state Rep. Brian White, R-Anderson, the Houses chief budget writer.
The House proposal would cut taxes for some small business owners to 3 percent from 5 percent. State economists project the tax cut would cost the state $64 million of its estimated $6.7 billion budget or less than 1 percent. It would affect 58,884 of the 2.1 million people who file state tax returns, or less than 3 percent.
The tax cut is the only one of seven Republican-sponsored tax bills with a chance to pass this year. The GOP-controlled House passed the tax cut proposal as a separate bill earlier this year. But the state Senate, which also has a Republican majority, did not debate it and never voted on it, which should have killed the bill.
But House lawmakers attached the tax cut proposal to the state budget a legislative maneuver the Senate hates because it bypasses the normal vetting process. Leatherman has called the practice dangerous, saying a similar shortcut led the state to legalize video poker years ago.
But House Republicans said they are having a hard time agreeing to a state general fund budget with an extra $1.4 billion in state spending that does not include a tax cut.
Youre talking about sending back $60 million to basically the backbone of the South Carolina economy, and thats the small businesses, White said. Thats not much at the end of the day.
In other budget news:
• Irmo Elementary School can continue charging $150 a week for its 4-year-old preschool program after some House lawmakers failed to ban the practice statewide.
House lawmakers had included a provision in the state budget that would have banned public school districts from charging tuition for 4-year-old preschool programs. The Senate removed that provision, and Monday the budget conference committee three House members and three senators voted to eliminate the provision for good.
Four-year-old kindergarten is not mandated by the state, so school districts offer it at their discretion. Also, parents are not required to send their children to the programs.
Rep. White noted public school districts use buildings and teachers paid for by taxpayers for the K-4 programs, which compete with private day-care programs. You are competing against private enterprise with taxpayer dollars; thats a little bit unfair, he said.
However, state Sen. John Land, D-Clarendon, said there is no private-school alternative for 4-year-old preschool in some rural counties. If we get those children young, we have a better chance of educating them.
• National Board-certified teachers in South Carolina will continue to get a pay increase from the state.
House lawmakers wanted to close the program to new applicants starting July 1. This year, state taxpayers have paid National Board-certified teachers an extra $68.4 million in salary. But House Majority Leader Kenny Bingham said he has not seen corresponding test scores to justify the expense, and he and his colleagues voted to close the program to new applicants, starting July 1.
However, the joint House-Senate budget committee deleted that proposal.
• The state Department of Social Services will continue to give preference to abstinence-based teen pregnancy-prevention programs. Social Services is required to award two contracts to nonprofits to run teen pregnancy-prevention programs. House lawmakers deleted the requirement to give preference to abstinence-based programs, but the joint House-Senate budget committee restored the original requirement.
Reach Beam at (803) 386-7038.