State workers would get a 3 percent raise and teachers would get a 2 percent pay hike under a budget plan unanimously approved Wednesday by a state Senate committee.
However, unlike the House, senators, writing their own plan for the state’s budget that takes effect July 1, required the raises for teachers only. School districts could give the raise to all of their employees but would not be required to under the Senate plan.
House lawmakers, who approved their version of the budget in March, required school districts to give every district employee a 2 percent raise. But state lawmakers don’t control the salaries of principals, assistant principals and district administrators.
“We’ve never done that before. It’s certainly laudable and commendable, but that is an unfunded mandate,” state Sen. Wes Hayes, R-York, said Wednesday, explaining why the Senate plan differs.
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Also, school districts would be required to give teachers the raises under the Senate plan. The House budget would allow districts to opt out of the raises, if they could prove they could not afford them.
While teachers would be guaranteed a raise, they could lose some of their salary through furloughs. House lawmakers included a proviso in the budget that banned districts from furloughing teachers — unless there is a midyear state budget cut. But the Senate deleted that proviso, allowing districts to furlough teachers if they choose to.
“We are not mandating that they have any furloughs. But we’re not stopping them,” Hayes said. “This is basically home rule for school districts.”
Part of the motivation behind the pay raises is to offset a move last week by the Senate Finance Committee to increase state workers’ contributions to the state workers’ retirement system to 8 percent of their pay from 6.5 percent — basically a pay cut phased in over three years.
Senators, in effect, gave back some of that money by giving state employees a 3 percent raise. House lawmakers recommended a 2 percent employee raise.
The senators also gave a 5 percent raise to all Class 1 law enforcement officers who make $50,000 a year or less at SLED, the Department of Public Safety, the Department of Natural Resources and the Department of Probation, Pardon and Parole Services. The House’s budget also included a 5 percent raise for those law enforcement agencies — except for SLED.
And senators spent $4.9 million to pay for an increase in the cost of the state employee health plan — an increase House lawmakers planned for employees to pay for through premium increases.
The spending plan now goes to the full Senate, which will begin its budget debate next Tuesday. Differences between the House and Senate plans then will have to be worked out before the budget can be sent to Gov. Nikki Haley, who has said she wanted more state money used for tax cuts or to pay down debt.
The Senate could do more for state workers than the House because senators had more money to spend. The state Board of Economic Advisors added an extra $137 million to the state budget Tuesday, citing the state’s strong employment growth over the past year. More people working means more people are paying taxes, so lawmakers had more money to spend.
Some of that money would go toward a $15 million tax cut for small businesses next year.
Wednesday morning, the Senate Finance Committee approved a bill that would lower the income tax rate for small businesses to 3 percent from 5 percent. The bill already has passed the House. If enacted, the tax cut would lower the state’s general fund revenue by $15 million next budget year. By 2016, it would lower the state’s revenue by $64 million.
Senators did disagree over how to spend some money in the state attorney general’s budget.
Attorney General Alan Wilson asked senators to allow him to tap into $500,000 reserved for the state’s lawsuit against North Carolina over use of the Catawba River.
State Sen. David Thomas, R-Greenville, said Wilson would use the money to sue the U.S. Justice Department for blocking South Carolina’s controversial voter-ID law, which would require voters to show a photo ID before they could vote in elections.
“Why take money ... that we may need to fight water-litigation lawsuits to fight for a voter-ID law that looks like an uphill battle to be successful?” asked state Sen. Darrell Jackson, D-Richland. “This whole voter-ID thing is a political thing. It doesn’t affect the quality of life for South Carolinians.”
Thomas, however, said it was an appropriate use of state money because the money was set aside specifically for “federal litigation.”
“(Wilson) is supposed to defend South Carolina legislation from attack,” Thomas said. “We pass a bill on immigration, he’s supposed to defend that, too.” The committee approved the request, 10-8.