Gov. Nikki Haley said Wednesday that she disagrees with a state Senatebudget proposal that would add $105 million to K-12 education spending,arguing the money instead should be used for tax cuts or to pay offstate debt.
Haley also said that, in the future, anytime a three-member panel ofstate economists increases projected state revenues, as they did lastmonth, the added state money should go for tax cuts or payments on thestate's debt.
The Board of Economic Advisors added $210 million to state coffers lastmonth, as the state's recovering economy generated more tax and feerevenue than expected. But that money has created problems between Houseand Senate lawmakers trying to work out a final compromise on thestate's $5.8 billion spending plan for its fiscal year that starts July1.
The Senate -- who had the first opportunity to spend the new money --added $105 million for K-12 education and $100 million to helpbusinesses pay off nearly $1 billion in federal loans that the state hadto take to be able to continue paying jobless benefits after the state'sunemployment fund went bust. Some businesses say their unemploymentinsurance bills have increased six-fold after lawmakers voted to raiserates to repay the loan.
The House earmarked $146 million for business tax relief, trimming thatmoney from higher K-12 spending. House members argued that providingbusinesses with additional tax relief might encourage them to hire moreemployees.
Haley said the House was able to balance its budget without theadditional money, and the Senate should do the same.
"If you're not giving it in tax relief, if you're not giving it to paydown the debt, you send it back to the taxpayers -- that's where itbelongs," Haley said.
Haley also said that, in the future, if the Bureau of Economic Advisersadds more revenue, as happens often when the economy is recovering,lawmakers should not spend the money. The panel often cuts revenueprojections during economic downturns forcing state agencies to trimtheir budgets mid-year, including three times in the budget year thatended June 30, 2009.
"From now, going forward, whenever money falls from that money tree --and it does every year -- it's not, 'Where do we spend it and how do wespend it?' It's, 'Give it back to the taxpayer,'" Haley said.
Haley said she will target her budget vetoes at "anything that's notthat core function of government."
House Ways and Means chairman Dan Cooper, R-Anderson, told colleaguesWednesday that Haley indicated to him she would veto the Senate budgetbecause of the additional K-12 money.