SC to get a $600 million payout from the feds. What will lawmakers do with it?
South Carolina will soon be the recipient of a $600 million check courtesy of the federal government that ends a years-long legal battle over the removal of bomb-grade plutonium from the Savannah River Site.
The state’s Attorney General Alan Wilson said Monday that that one-time money will be available by Oct. 1, dumped into the budget’s general fund. And about $75 million of it will be spent on attorneys fees, despite objections from Gov. Henry McMaster.
Adding yet another possible tangle to budget negotiations — in a year when every lawmaker’s seat is up for reelection — state legislators aren’t sure whether they’ll spend it. Lawmakers return to the State House on Sept. 15 for a special two-week session to adopt some sort of spending plan and other legislation.
“I have not staked out a position on that,” Senate Finance Committee chairman Hugh Leatherman, R-Florence, said Tuesday.
South Carolina is not alone, facing a rather uncertain financial future after the COVID-19 outbreak upended the state’s tourism industry and forced private and public businesses to shut down and furlough and lay off employees as it tried to salvage the impact.
In a few short months, the state lost roughly 250,000 jobs, almost wiping out the state’s $1 billion unemployment trust fund that pays for unemployment benefits, Frank Rainwater, head of the S.C. Office of Revenue and Fiscal Affairs, told senators on Tuesday.
“Had COVID impacted us three months later, ... you would probably be looking at a rescission bill (legislation that would cut an agency’s budget),” Rainwater told a completely virtual Senate Finance Committee on Tuesday. “... We’ve dodged a bullet that you did not have to come back and reduce anybody’s budget.”
But cuts may be necessary next year as costs related to the coronavirus continue to stack up.
State economists on Monday estimated the state would have $861 million in new money to spend in the year that started July 1, not including the more than $500 million federal windfall or the $668 million coming to the state in COVID-19 aid through the federal CARES Act.
Of that surplus, $775 million is set for one-time spending and only $86 million is new annual dollars to spend.
With so many unknowns, including a still unavailable COVID-19 vaccine, lawmakers are split over whether to adopt a new budget or keep state government operating on the Legislature’s emergency measure that keeps state services and employees paid at the same levels as last year.
House leadership and the governor want to keep the continuing resolution in place.
However, Leatherman has already laid out a couple of spending priorities, including sending a bulk, if not all, of the remaining CARES Act money for COVID-19 relief back into the state’s unemployment trust fund to keep businesses from having to bear higher rates.
Leatherman proposed Tuesday putting more than $450 million of the one-time surplus into a separate fund in case of an economic downturn.
“I want us to have money to where we don’t go in mid-year and do (budget) cuts,” Leatherman said. “I’ve been there. ... I don’t want to go back. That’s the worst thing that could ever happen to an agency.”
This story was originally published September 1, 2020 at 1:46 PM.
