S.C. lawmakers don’t return to Columbia until January, but the race for hundreds of millions of dollars in up-for-grabs money has already started.
Raising teacher pay, addressing the state’s underfunded pension system and replacing old voting machines are three top contenders, as state agencies and special interest groups try to win over lawmakers for their causes.
But even while the state appears flush with money, lawmakers aren’t free to spend all $1 billion in new state money, House budget chief Brian White said. Of that amount, only $546 million is one-time money, which lawmakers note can’t be spent on yearly costs, like employee pay.
“Unfortunately, nobody likes talking about the expenditures,” White said.
For months, lawmakers have suggested how they’d like to see the new money divvied out.
Here are some options:
1. Raises for K-12 teachers, state workers: Advocates for educators and state workers have asked that lawmakers split the state’s $177 million one-time surplus on bonuses, a quick way to stymie the state’s ongoing teacher and state employee shortage.
Giving the state’s nearly 37,000 employees — excluding federal and university workers — a 1-percent pay raise would cost $20.7 million.
Separately, the S.C. Department of Education will ask state lawmakers for nearly $155 million for a 5-percent teacher pay raise. If approved, that raise would be enough to push S.C. teacher pay past the Southeastern average of $50,119.
“The key component is (getting money in) the classroom,” said House Majority Leader Gary Simrill, R-York. “The biggest (classroom) assets are the educators.”
2. New voting machines: State election officials have asked for new voting machines before 2020.
Next year, lawmakers will debate whether to spend $60 million to replace 13,000 old touchscreen voting machines that currently don’t include a paper trail to verify votes. The state’s current machines were bought in 2004.
The state already has about $10 million set aside for new machines.
3. Lowering college tuition costs: S.C. college tuition has soared over the past decade.
To mitigate that burden on families, the University of South Carolina and other S.C. schools are supporting a Senate-driven bill that would, in part, temporarily freeze college tuition increases at colleges and universities.
“Raising teacher pay and lowering college tuition should be priorities,” said state Sen. Vincent Sheheen, the Kershaw Democrat who sponsored the bill.
In its 2019-’20 budget request, USC asked lawmakers for nearly $9 million to offset rising cost-of-living, health care and inflation costs. Clemson University wants another $8 million for the same purposes.
4. Bolstering the state’s pension: Accountants suggest another investment: Fill the state’s woefully underfunded pension liability.
Last year, the Legislature voted to shore up the state’s pension by requiring state workers, police officers and local government workers — and their employers — to pay more money into the state’s retirement system.
Lawmakers hope that will help fill the state’s more than $21 billion hole in unfunded benefits for retirees and workers.
Still, it’s just a partial fix.
“When you’re dealing with one-time money, you’ve got to look at the things you’ve not dealt with in the past,” said state Sen. Sean Bennett, R-Dorchester, a financial planner who sits on the Senate Finance Committee. “We need to make sure we’re spending the money in the most effective way.”
5. Cutting taxes? Since January, Republican Gov. Henry McMaster has pushed to cut state income taxes for retired military veterans and first responders.
The proposed cuts — amounting to about $22.6 million in the first year, McMaster said — were not adopted by the Legislature.
However, McMaster’s spokesman Brian Symmes says tax cuts will remain a priority for the Columbia Republican, who also has pushed lawmakers to spend more money to hire school-resource officers in the wake of school shootings.
“The governor will look to invest in the state’s greatest needs and will also ... make sure that some of that money stays in the pockets of the people who earned it,” Symmes said.
But some lawmakers say the state must address the state’s entire tax code before making any quick cuts.
“We need to take a holistic view of the financial picture of South Carolina,” House Majority Leader Simrill said. “South Carolina has done a good job of working toward priorities. Obviously, we’ve accomplished conformity. Now is the reformity portion of that.”
More money, more problems?
The S.C. Legislature will have slightly more than $1 billion in new money to spend next year in its $9 billion general fund budget that will take effect July 1, 2019. That new money is split:
▪ $457.7 million: new recurring revenue for the state’s general fund budget
▪ $151.6 million: one-time money from the state’s 2018-’19 capital reserve fund
▪ $177.1 million: one-time money from the state’s 2017-’18 budget surplus
▪ $217.7 million: projected one-time money from the state’s current 2018-’19 general fund budget