View from the Dome

March 17, 2017

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This week marked the halfway point in the 2017 legislative session with adjournment scheduled for May 11. The House of Representatives passed their version of the state budget after just two days of debate. The Senate Finance Committee advanced the highway infrastructure funding bill to the full Senate.

BUDGET

The House Ways and Means Committee completed their work on the FY 2017-18 state budget H. 3720 and the Capital Reserve Fund H. 3721 just after midnight on Tuesday. Legislators previously warned state agencies that the new revenue has already been earmarked and receiving additional funding would be a challenge. That warning became reality for most state agencies as the majority of the new and one-time revenue went to Medicaid, K-12, the pension fund deficit and matching funding from Hurricane Matthew. The $7.9 billion general fund budget did not include a pay increase for state employees, but did fully fund the increase in their healthcare costs. The total state budget including general fund revenue, other funds (fines, fees, etc.) and federal funds now totals nearly $27 billion. Among higher education institutions, neither the four-year or two-year institutions received any new base funding in the plan. Items funded include:

  • $100 million for 39 plaintiff districts in the Abbeville lawsuit for building needs;
  • $150 million for increased pension contributions to cover half of the 2% increase for state and local governmental entities;
  • $82 million for state and local match from Hurricane Matthew recovery;
  • $46 million for Medicaid maintenance of effort;
  • $38.1 million to increase the K-12 base student cost;
  • $22 million for the Department of Commerce deal closing fund; and
  • $2 million each for Telemedicine and the Rural Health Initiative.

For the technical college system:

  • $10 million for Workforce Pathways (recurring);
  • $10 million for Workforce scholarship grants (one-time);
  • $58.1 million for Lottery Tuition Assistance (increase of $7 million);
  • $9.6 million for ReadySC;
  • $5 million for allied health initiative simulators;
  • $3 million for equipment.

While there was no added funding for the colleges for capital projects, House leaders have been working on plans for a bond bill for maintenance and renovations totaling $400-$425 million.

The Senate Finance subcommittees completed work on their version of the state budget this week. They plan to take up the budget in full committee next week.

Individual state agency budget requests can be found here.

HEALTHCARE

The Senate Medical Affairs Committee unanimously approved to H.3438 (Henderson, G.M. Smith, Sandifer and Hiott) dealing with interchangeable biological products. The bill updates the Pharmacy Practice Act and requires pharmacists to notify the prescriber in the event of an interchangeable biological product substitution. The bill now goes to the full Senate for consideration.

HIGHER EDUCATION

On Wednesday, the Senate favorably approved S. 262 (Senator Setzler) by a vote of 43-0. The bill would require the Commission on Higher Education (CHE) to establish guidelines concerning procedures for the adoption of all public institutions of higher education textbooks. It also requires each public institution to develop their own guidelines for adoption of textbooks, as well as provide information on best practices and establish procedures to assess the success of the established practices. The bill also defines an allowable time period for the replacement of most textbooks. The bill received third reading on Thursday and now goes to the House of Representatives for consideration.

Also on Wednesday, the Higher Education Subcommittee of the Senate Education Committee favorably approved S. 480 (Senators Hutto and M. B. Matthews). The bill would abolish the Denmark Technical College Area Commission and the State Board for Technical and Comprehensive Education would become the governing body for DTC. Dr. Tim Hardee, President of the State Board for Technical and Comprehensive Education, told the subcommittee enrollment at the two-year college has dropped from 1800 to 600 students and the college will reach a deficit of nearly $2 million by the end of the fiscal year. The bill also requires the State Board to commission a study into the most effective, efficient delivery of technical college opportunities in Allendale, Bamberg, and Barnwell Counties. The bill now goes to the full Senate Education Committee.

HIGHWAY INFRASTRUCTURE

On Wednesday, the Senate Finance Committee adopted H. 3516, the highway infrastructure funding proposal, by a vote of 14-7. The Senate plan would increase the amount of revenue generated from $600 million as passed by the House of Representatives to $800 million. The amended plan:

  • raises the gas tax by 12 cents, to 26 cents per gallon, over the next six years;
  • increase the sales tax cap on vehicles from $300 to $700 annually;
  • increases the motor vehicle registration fee from $20 to $40;
  • creates a biennial fee of $60 for hybrid vehicles and $120 for electric vehicles;
  • creates a $250 one-time vehicle registration fee for people moving into SC (active duty military are exempt); and
  • creates a "road user fee" for out-of-state truckers based on the miles they drive.

The committee removed all language in the House-passed version dealing with restructuring of the SCDOT Commission, which may now generate additional opposition to the plan as numerous legislators have insisted on reform of the SCDOT Commission as a prerequisite to passage of the overall plan. Numerous other senators have called for an offsetting tax decrease to be able to support the plan. The subcommittee also indexed the increase for inflation and capped it at the Consumer Price Index (CPI). The state's 16 cent per gallon gas tax, the primary source of funding for infrastructure repairs and improvements, has not been increased since 1987 and has never been adjusted for inflation. Finding a long-term solution for our road needs has been a top priority of the general public, legislative leaders and many in the business community for several years. The House of Representatives passed a similar plan in 2015, but it was filibustered and the Senate never acted on the proposal. Governor Henry McMaster has dismissed the idea of raising South Carolina's gas tax. The plan now goes to the full Senate.

INTRODUCTIONS OF INTEREST

HOUSE

H. 3968 Reps. Sandifer and Forrester: Relating to prior criminal convictions on persons seeking to practice, pursue or engage in regulated professions. Referred to Committee on Labor, Commerce and Industry.

H. 3987 Reps. Allison, Alexander, Anderson, Anthony, and others: Declaring April 5, 2017 as Technical College System Day in South Carolina. Introduced, adopted, sent to Senate.

H. 3988 Reps. Allison, Alexander, Anderson, Anthony, and others: Resolution congratulating SC Technical College students named to the 2017 Phi Theta Kappa academic all-state team. Introduced, adopted, sent to Senate.

H. 3990 Rep. Sandifer: Relating to the Small Business Regulatory Review Committee. Referred to Committee on Labor, Commerce and Industry.

H. 4002 Rep. B. Newton: Relating to Individual Retirement Accounts and bankruptcy. Referred to Committee on Ways and Means.

SENATE

S. 538 Senator Alexander: Relating to annual reports filed by corporations. Referred to the Committee on Finance.

S. 539 A bill relating to the appraisal of Business Personal Property under the jurisdiction of the county auditor.

S. 542 Senator Talley: State Institution of Higher Education Enterprise Act. Referred to the Committee on Education.

S. 553 Senator Shealy: State procurement code master agreements for SC companies. Referred to the Committee on Finance.

S. 561 Senator Cromer: Relating to pharmacy technicians. Referred to the Committee on Medical Affairs.

COMING UP NEXT WEEK

The Senate Finance Committee will begin debate on their version of the state budget beginning Tuesday.

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