Money for local governments cut in SC Senate budget plan

ccope@thestate.comMay 1, 2014 

Hugh Leatherman

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— Local governments could pay the price for the Senate Finance Committee’s decision to expand South Carolina’s 4-year-old kindergarten program for at-risk students.

The Senate panel, working on a proposal for the state budget to take effect July 1, cut $15.8 million from the $30 million in additional money that the S.C. House earmarked for local governments. The money for local governments was cut to help pay the $24.4 million cost of the 4K expansion and add about $25 million more for higher education, including about $10 million that is contingent on higher than expected lottery profits. The 4K program was not included in the House budget.

“Education has got to be at the forefront of our budgetary process,” said Senate Finance chairman Hugh Leatherman, R-Florence.

The $15.8 million cut from local governments could be restored if the Bureau of Economic Advisors projects the state will collect more revenue than currently expected. The money also could be put back during budget discussions in the full Senate, set to begin Tuesday. Lawmakers also could restore the money when House and Senate negotiators meet later this month to reconcile the two bodies’ differing budget proposals.

However, the Senate budget writers’ decision was disappointing, said Tim Winslow, assistant general counsel for the S.C. Association of Counties. “We hoped they would increase the local government fund.”

By law, the state should pay 4.5 percent of its general fund revenue collections during the previous fiscal year to local governments. But that hasn’t happened since the Great Recession struck. This year, local governments should get $287.5 million. But, even if the Senate Finance Committee cut is restored, local governments will get only about $213 million.

By not giving money to local governments, state lawmakers will force counties to raise taxes, Winslow said.

“If that revenue doesn’t increase, then you have to make it up somewhere else because inflation happens, which costs county taxpayers money,” Winslow said.

Senators made the decision to cut local government reluctantly, said state Sen. Wes Hayes, R-York, chairman of the finance subcommittee for K-12 schools.

“A lot of us didn’t really want to go there,” he said. “But there’s not a lot of options.”

Local government was cut because senators were not willing to cut money from other priorities, including a third-grade reading initiative, summer reading camps and reading coaches, Hayes said.

The reading initiatives are part of Republican Gov. Nikki Haley’s education reform proposal, including $175 million in new spending. Meanwhile, expanding 4K has been a priority of Democratic state Sen. Vincent Sheheen, who is running against Haley in November.

However, the Senate Finance Committee’s proposed cut will make it difficult for counties – unsure of how much state money they will get – to prepare their own budgets, Winslow said.

Senate President Pro Tem John Courson, R-Richland, offered no apology for the cut, saying cuts had to be made to give more money to K-12 and higher education.

“It is an education budget,” said Courson, chairman of the finance subcommittee on higher education. “Monies had to be shifted.”

Senate Finance’s proposed cuts

While the budget the Senate Finance Committee approved Wednesday was a win for education, some agencies and programs would lose money, compared with the budget approved by the S.C. House. Where the Senate panel cut and added:

Losers

Local governments: Cut $15.8 million

Department of Revenue: Cut $11 million for a new tax-processing system

State Budget and Control Board: Cut $6 million for statewide technology security

Charter schools: Cut $3.5 million for a facility loan program

Winners

4K: Added $24 million to expand the state’s 4-year-old kindergarten

Higher education: Added $25 million, including about $10 million in lottery money, to pay for maintenance and equipment needs, that is contingent on lottery profits exceeding estimates

Lawmakers: $2 million for a $12,000 raise for each lawmaker

The college book controversy

The Senate Finance Committee voted Wednesday to restore about $70,000 in state money to two colleges – USC-Upstate and the College of Charleston – that the S.C. House voted to cut because of gay-themed reading selections. How senators voted:

Voting to restore the money: Paul Campbell, R-Berkeley; John Courson, R-Richland; Tom Davis, R-Beaufort; Wes Hayes, R-York; Joel Lourie, D-Richland; John Matthews, D-Orangeburg; Yancey McGill, D-Williamsburg; Floyd Nicholson, D-Greenwood; Clementa Pinckney, D-Jasper; Nikki Setzler, D-Lexington; Kent Williams, D-Marion

Voting to cut the money: Thomas Alexander, R-Oconee; Raymond Cleary, R-Georgetown; Mike Fair, R-Greenville; Larry Grooms, R-Berkeley; Hugh Leatherman, R-Florence; William O’Dell, R-Abbeville; Harvey Peeler, R-Cherokee

Giving lawmakers a raise

The Senate Finance Committee also voted Wednesday to give legislators a $12,000-a-year raise. How senators voted:

Voting for the raise: Thomas Alexander, R-Oconee; Paul Campbell, R-Berkeley; Raymond Cleary, R-Georgetown; Mike Fair, R-Greenville; Larry Grooms, R-Berkeley; Wes Hayes, R-York; Hugh Leatherman, R-Florence; John Matthews, D-Orangeburg; Yancey McGill, D-Williamsburg; Floyd Nicholson, D-Greenwood; William O’Dell, R-Abbeville; Clementa Pinckney, D-Jasper; Nikki Setzler, D-Lexington; Kent Williams, D-Marion

Voting against the raise: John Courson, R-Richland; Tom Davis, R-Beaufort; Joel Lourie, D-Richland; Harvey Peeler, R-Cherokee

Reach Cope at (803) 771-8657

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