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SC Politics

South Carolina House Approves $40.1 Billion Budget

Funding for Bridges, Teachers, Tax Cut and More

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The South Carolina House of Representatives gave its approval to a record $40.1 billion appropriations plan for the coming 2024-2025 fiscal year this week. House lawmakers purported to prioritize spending on infrastructure, public school teacher pay and veterans programs – while touting a general fund budget decrease of $700 million and the continuation of previously enacted income tax cuts.

The budget bill (H. 5100), which originated in the House ways and means committee, was debated on the House floor for multiple days this week prior to passage. During the floor debate, conservative representatives unsuccessfully introduced a number of amendments attempting to redirect funding to what they refer to as “core functions of government.”

The House’s portion of the state spending negotiations are a key part of the annual budget process, which begins with a largely symbolic executive budget from the governor. The process becomes serious when House members (who have the sole statutory authority to introduce bills aimed at raising revenue) begin formal deliberations on the spending plan in January.

(Click to View)

Budget process FY2024-25
(S.C. Executive Budget)

By the time the budget hits the House floor, the chamber’s leadership aims to have a bill ready to pass without major modifications. And while the proposed 2024-2025 budget was passed largely as it was drafted, some members raised objections to a number of house leadership’s financial priorities.

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WHERE DOES THE MONEY COME FROM?

Our audience members may have seen other South Carolina media outlets report on the proposed budget as a $13.2 billion spending plan. While not technically incorrect, this total only accounts for money appropriated from the state’s general fund (the pool of money collected from tax revenues).

(Click to View)

Budget Revenue by fiscal Year
(S.C. House Ways and Means Committee)

The vast majority of funding in the spending plan comes from federal funds and “other” funds – i.e. revenues collected from fines, fees and other assessments imposed on Palmetto State citizens. Because lawmakers appropriate all of this money, FITSNews has historically incorporated every penny of it in our budget reports.

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HOW WILL THE MONEY BE SPENT?

This year’s budget commits $200 million to public teacher pay, allowing teachers to receive annual wage increases for their first 28 years of employment by the state while raising the first-year teacher pay to $47,000 a year.

Teachers aren’t the only state employees getting a raise, as all state employees making less than $66,667 will receive a flat $1,000 raise while those earning more will receive a 1.5 percent increase.

State employees will also be the beneficiaries of a $107.5 million expenditure to cover a health and dental plan insurance increase – making it over a decade since the’ve seen their premiums increase.

Law enforcement is set to receive additional funding under the house budget. Lawmakers allocated $1.575 million for two new trial teams to assist in mitigating the lengthy case backlog currently impeding the delivery of justice in South Carolina. Attorney general Alan Wilson said the money would allow his office to “fix this backlog” adding that the state is “never going to let it get this bad again once we get there.”

South Carolina Law Enforcement Division (SLED) Chief Mark Keel saw the continuation of funding increases he says help his agency retain employees in a tight labor market.

“I just want to tell y’all thank you for what you’ve done for all of state law enforcement, not just SLED, but all of state law enforcement over the past couple of years,” Keel told lawmakers recently. “What you have done with regards to pay for state law enforcement has been transformative without any question.”

South Carolina’s schools are earmarked to receive $20 million to harden entry ways, install bulletproof glass, and otherwise increase their physical safety in the era of mass shooters – as well as $5 million for mapping of schools to assist first responders in the event of an emergency.

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A closer view of Richard V. Woods Memorial Bridge Beaufort, South Carolina
Richard V. Woods Memorial Bridge in Beaufort, South Carolina (Getty)

On the infrastructure front, South Carolina’s nearly 9,000 bridges are slated to receive a much needed $200 million overhaul. Governor Henry McMaster‘s executive budget called for the funding of this priority item, noting that “many of these bridges are 60, 70, and even in excess of 80 years old and are crumbling before our eyes each day.”

“Too many (bridges) have been closed, while others are in such a state of disrepair that the required restrictions render them useless for commercial trucking, school buses, or fire trucks needed to serve our state’s increasing population,” McMaster added.

McMaster called for $500 million of repairs, requesting they be funded via a surplus created from a 2006 sales tax hike. Lawmakers instead opted to return this tax money to home owning South Carolinians in the form of property tax relief. Their plan also set aside $100 million to continue the reduction of the state’s top marginal income tax rate from 7 percent to 6 percent over the coming decade.

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HOUSE FLOOR BATTLE

Conservative lawmakers expressed their dissatisfaction that the budget proposal failed to make meaningful cuts to state government. S.C. Freedom Caucus vice chairman RJ May III lamented the budget “doesn’t cut a single dollar from a single program.”

While May’s allies introduced numerous amendments attempting to shift funds to what they repeatedly referred to as “core functions of government,” these amendments only garnered the same sixteen or seventeen votes of support typical of conservative amendments opposed by House leadership.

Republican representative Kathy Landing of Mount Pleasant attacked effort to modify the budget on the House floor.

“To bring something up today, repeatedly, don’t you think it kind of looks like a political trap?” she asked.

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State representative Kathy Landing during a House session on Tuesday, March 14, 2023. (Travis Bell/STATEHOUSE CAROLINA)

Landing grilled state representative Jordan Pace, who raised the issue of the state funding a massive new lease for a consolidated health agency‘s office space prior to the signing of the lease.

Landing took offense to Pace’s objections “when these things have been negotiated and worked on.”

Acknowledging that Pace (or his ideological compatriots) lack a seat on the powerful ways and means committee, Landing told him he could attend committee meetings and “ask questions afterwards” to attempt to resolve issues he has with the legislation.

“Did you do that?” she asked.

“That is not the issue here” Pace replied, arguing the lease in question “is obligating the taxpayer for 20 years, that shouldn’t be discussed behind closed doors … especially when the lease has not been agreed to.”

“This is not a political trap, this is the way its supposed to be” Pace continued “we’re spending $14 billion of other people’s money, it’s very easy to do when its not yours, but when it’s other people’s money it should be deliberate, that is the purpose of why we are here, to have these lengthy (and sometimes painful) discussions.”

Landing reiterated her position saying she “heard a lot of things today I disagreed with, but I kept my mouth shut – but at the end of the day I wanted to make the point that we really need to do everything we can leading up to budget week and not necessarily hold this type of process hostage.”

Pace replied that he and his fellow conservative members had discussions with members of the ways and means committee about their legislative priorities, but “we don’t get a vote until today.

“This is our chance to represent our constituents,” he said. “I believe my constituents don’t want us to spend this money frivolously, particularly on a lease that doesn’t exist.”

Freedom caucus chair representative Adam Morgan faced similar idealogical resistance from House minority leader Todd Rutherford. Their exchange received over one million views on the social media platform X.

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The House version of the 2024-2025 budget now heads to the Senate where finance committee members will identify discrepancies between the priorities of the upper and lower chambers. Once the Senate passes its version of a spending plan, differences will be ironed out by a conference committee comprised of members of both chambers.

Once both chambers agree to that compromise, the spending plan will be sent to the governor – who has the ability to sign it, veto it or (if he chooses) veto specific spending items. Like his predecessor Nikki Haley, however, McMaster rarely uses his veto pen to make significant cuts to the budget that lands on his desk.

Any gubernatorial vetoes must be taken up by both chambers – with a two-thirds majority of each body required to override them. Once all vetoes have been dealt with, the new budget takes effect on July 1, 2024 – the first day of the state’s fiscal year.

Count on FITSNews to continue to keep our finger on the pulse of South Carolina’s financial status.

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ABOUT THE AUTHOR …

(Via: Travis Bell)

Dylan Nolan is the director of special projects at FITSNews. He graduated from the Darla Moore school of business in 2021 with an accounting degree. Got a tip or story idea for Dylan? Email him here. You can also engage him socially @DNolan2000.

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