SC House adopts $10 billion spending plan that returns millions to taxpayers
South Carolina taxpayers may get another refund of their tax dollars, if the state budget adopted on Wednesday by the S.C. House becomes law.
But signaling that they’ve learned their lesson from paying hundreds of thousands of dollars last year just to mail out one-time rebate checks to state taxpayers, lawmakers instead have opted for a one-time tax credit to avoid paying for the postage stamps.
On Tuesday, the S.C. House adopted its version of the state’s $10.2 billion general fund spending plan in a 120-2 vote. The chamber officially sent the budget over to the Senate on Wednesday by an overwhelming voice vote.
Upstate Reps. Jonathon Hill, R-Anderson, and Stewart Jones, R-Laurens, were the two to vote against the budget.
Included in the spending plan is a one-time tax credit that would allow a $100 non-refundable tax credit on every return filed in tax year 2020 that owes at least $100 in taxes. The tax credit will cost the state about $128 million.
That and other tax cuts that total more than $700 million included in the chamber’s spending plan could cause points of contention with some state senators, who get the next shot at shaping the budget after the House adopted its version in a vote Tuesday that ended well before midnight, unlike in previous budget years.
House budget chairman Murrell Smith, R-Sumter, told The State it’s a possibility tax cuts will be an issue between the chambers when it’s time to negotiate the budget.
“There’s a lot of members (in the Senate) I hear (those are) priorities in their body,” Smith said. “(The) Senate will have to work through their own issues and bring us back a budget to consider. I think you see that the House overwhelmingly supports tax cuts, especially our Republican caucus. And so, I imagine if that’s not a part of their budget when it comes over here, it’ll be a contention that we’ll have to work through in conference.”
Returning money back to South Carolina taxpayers has been one of several priorities in Gov. Henry McMaster’s executive budget the last two years. This year, he proposed lawmakers spend $250 million on another one-time check for South Carolinians that would be paid out depending on how much a filer put in. The year before, he requested $200 million for rebate checks.
Despite the governor’s proposal, Smith said he did not think McMaster would fight the Legislature over a tax credit rather than a rebate check.
“I think the governor has been supportive of the concept of maybe a tax credit as opposed to that (rebate),” Smith said. “I think he understands and sees the concerns that we had with the rebate and doing a credit would be a better alternative.”
Smith said he has had discussions with Senate budget leaders about priorities, but added, “where they’ll land I don’t know.”
Tax cuts might not be the only point of issue with some senators.
On Tuesday, House lawmakers twice rejected attempts to boost pay even higher for the state’s employees, opting instead to keep a proposed merit-based pay increase in the budget. That increase costs about $42 million, equivalent to a 2% pay raise.
Advocates for state employees have argued that amount is not enough, saying that because it is a merit-based raise, agency heads would have discretion over how the raises are doled out. Twice lawmakers voted down amendments proposed by state Rep. Gilda Cobb-Hunter, D-Orangeburg, that would have given across-the-board pay raises to state employees at 2.5% and 5%.
“The person at the top who gets the glory is usually not the person on the front line doing the work,” said Cobb-Hunter after some House members offered proposals to strip the state’s Transportation Secretary Christy Hall’s 32% pay raise, approved by the joint House-Senate Agency Head Salary Commission in February.
Cobb-Hunter and other Democrats were joined by outgoing state Rep. Mac Toole, R-Lexington, who said Tuesday that every year the Legislature debates raising state worker pay even higher, “and we never do it.”
“We need to step up to the plate and take care of our employees,” Toole said. “With all the money we’re spending, we should be able to do a better job, and we should do everything we can to make salaries, salary increases as just and as right as we possibly can, and I think we’re heading down the wrong road.”
This story was originally published March 10, 2020 at 7:56 PM.
