S.C. lawmakers will put $150 million in taxpayer money directly into the state’s ailing pension system, budget negotiators agreed Wednesday.
That deal was reached after weeks of negotiations between S.C. House and Senate budget writers.
The plan includes sending the money to cover half of the increased pension costs for employers that are not state agencies — cities, counties and school systems — directly to the retirement system, a key difference between the budgets passed previously by the House and Senate.
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The new S.C. pension law will hit cities, counties and school systems hard. Over the next six years those employers will have to increase the amount they pay into the state retirement system to $18.56 for every $100 an employee earns. They now pay $11.56.
When fully phased in, the higher pension rates will cost S.C. governments and their taxpayers an added $827 million a year.
The state Senate originally had proposed sending roughly $30 million to the state’s local government fund to cover the increased pension costs for non-state agencies.
But critics said that would have shortchanged some cities, including Columbia, because the local government fund favors counties, not cities.
The House, which must approve the spending plan before the Senate, proposed sending the money directly to the pension system, the plan adopted Wednesday night. The House is slated to return Tuesday to Columbia to give the final approval to the state budget, which takes effect July 1.
Meanwhile, budget negotiators did not include a one-time bonus for state employees in their final compromise.
Legislators already had nixed the idea of a pay raise for state workers, saying taxpayers couldn’t afford it when they already are paying all the cost of state workers’ higher health insurance premiums and injecting money into the pension system.
The budget year that starts July 1 will be the fifth in the past 10 when state workers do not get a pay hike. Last year, legislators approved a 3.25 percent pay hike for state employees — the largest in a decade.
However, some criminal justice employees will get a bonus.
For example, the budget deal includes spending for a raise for state Corrections officers and Juvenile Justice officers. As with some other state departments, the state’s prison systems have had difficulty filling vacancies, in part because of their low pay.