Politics & Government

May 24, 2014

EXCLUSIVE: Rare SC budget deal in the works; senators to begin roads debate

While S.C. lawmakers are working on a budget compromise that includes little new money for the state’s crumbling roads next year, state senators are set to debate a plan to spend more on road repairs in future years.

While S.C. lawmakers are working on a budget compromise that includes little new money for the state’s crumbling roads next year, state senators are set to debate a plan to spend more on road repairs in future years.

If lawmakers are successful in reaching a budget deal – and they could, since the House- and Senate-passed spending plans are similar – it would represent a rare step. It also would avoid sending the budget to a conference committee, where three representatives and three senators would hash out budget differences.

The differences between the House and Senate budget proposals, which lawmakers and budget staffers are working to smooth over, include how much to spend to expand 4-year-old kindergarten, subsidize local governments, pay cyber security consultants, boost higher education and operate the state’s Certificate of Need program.

Those differences could be papered over by spending $86 million in additional revenue that the Board of Economic Advisors officially added to the state’s fiscal year that starts July 1.

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Still, there isn’t much new money allocated to another key issue: road repairs.

Republican Gov. Nikki Haley has said money added to the state budget after the BEA’s annual springtime revision of projected revenues should be spent on roads, referring to that revision as “the money tree.” But, instead, the House or Senate could use that money to satisfy differences between their budget proposals.

However, a partial, longer term roads solution could be in the making in the form of a House bill that senators are set to start debating this week. That bill would help pay for road repairs by using more of the sales tax now collected on vehicle sales, now capped at $300.

Until recently, 80 percent of the money raised by that sales tax went into the state’s general fund, while the remaining 20 percent went to the Education Improvement Act, which helps pay for public schools.

Last year, however, lawmakers directed that half of the money going to the general fund should be diverted to repair roads. That was about $41 million a year, said state Sen. Raymond Cleary, R-Georgetown, who is championing the House bill.

The House road proposal would take the remaining vehicle sales tax money that goes into the general fund – another $41 million a year – and divert it too for road repairs, starting with the 2015-16 budget.

Proposed Senate amendments to the House bill would raise more money for roads by increasing the price of drivers’ licenses and license plates or hiking the state’s gas tax.

None of the proposals is a tax increase, Cleary insists, saying the higher taxes generated should be considered fees, since they would go to a specific purpose.

“Every amendment that we have, that we’re going to offer, is a fee or the elimination of an exemption,” including the $300 cap on vehicle sales taxes, Cleary said.

A 2012 report by the state Transportation Infrastructure Task Force said South Carolina has $48.3 billion in road repair needs through 2033. The report estimated the state will have $19 billion to pay for those repairs, leaving a shortfall of $29 billion.

“Just like a home, it’s always cheaper to maintain it than to let it fall into disrepair,” Cleary said.

But raising any tax or fee will face opposition.

State Sen. Kevin Bryant, R-Anderson, says he will fight the House-passed proposal, noting hundreds of millions in new spending has been added to the budget that takes effect July 1, but very little is earmarked for roads.

“The trick politicians like to play is spend your money behind your back and then come to you with a gas tax,” Bryant said.

The real problem is wasteful spending, he said. “Everybody agrees that infrastructure is a core function of government, and everybody agrees it takes money. ... The money is there, the priorities are what’s lacking.”

‘Not a lot of big differences’

While the House and Senate budget proposals include little new money for roads next year, they are similar in many areas.

“There’s not a lot of big differences between what either one of us did,” said state Rep. Brian White, the Anderson Republican who is chairman of the House Ways and Means Committee.

Those similarities mean the House and Senate could avoid naming a conference committee, which has happened only once in White’s tenure as Ways and Means chairman. In the past, budget conference committees have taken weeks to work out differences between the House and Senate spending plans.

The current negotiations are a streamlined alternative to a conference committee, said Senate President Pro Tempore John Courson, R-Richland.

To avoid a conference committee, the House would amend the Senate’s budget proposal, then send it back to the Senate. The Senate then likely would agree to the House-passed proposal since compromises had been worked out previously. The budget then would go to Gov. Nikki Haley, who can veto any line in the budget.

“Any time you can avoid a conference committee ... (it) helps show the two bodies have worked together and the process is working efficiently,” White said.

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