The General Assembly returned to Columbia this past Tuesday and adopted the state budget Conference Report. If the governor's vetoes are significant, they may return to Columbia one final time this year to address gubernatorial vetoes in the budget. If the vetoes are not significant, the General Assembly will address them when they return in January. We will send a complete review of the legislative session in the coming weeks.
Both the House of Representatives and the Senate adopted the Conference Report on the FY 2017-18 state budget (H. 3720) and the Capital Reserve Fund (H. 3721) this past Tuesday. The House adopted the report by a vote of 100-9 and the Senate by a vote of 40-2. The budget Conference Committee reached an agreement last week after weeks of the behind-the-scenes negotiations. A Joint Resolution S. 692 (Senator Leatherman), allowing the General Assembly to continue past the mandatory May 11 Sine Die deadline, was recently adopted as the state budget had not yet been finalized. Much of the new revenue was earmarked to address the mounting deficit in the state retirement system, provide matching funds for FEMA assistance from damages from Hurricane Matthew, and statutory obligations for the Medicaid program and base student cost allocations in K-12. On the higher education front, the committee agreed to provide an increase to the base funding for South Carolina's 33 public colleges and universities, including the state's 16 technical colleges. The committee also agreed to adopt a House proviso that would remove some responsibility from the Commission on Higher Education (CHE) from what many colleges complained was redundant oversight for capital improvement projects. After July 1, the colleges' plans will be submitted through the Department of Administration directly to the Joint Bond Review Committee, made up of state legislators, and the State Fiscal Accountability Authority, a five-member board including two legislators, the governor, state treasurer and state comptroller general. The CHE proviso provided for some drama during the Senate debate as senators requested to vote on the proviso separately before adopting the Conference Report. The Senate then voted 23-19 to remove the proviso from the budget, with the majority arguing CHE oversight was critical to containing skyrocketing tuition. Later in the afternoon, after it became clear that by removing the proviso the budget conferees would have to renegotiate the state budget, the Senate reconsidered the vote and reinserted the proviso.
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 the $7.9 general fund revenue, other funds (fines, fees, etc.) and federal funds, now totals nearly $27 billion. Included in the budget plan:
$150 million to local governments to offset increase in retirement system contributions;
$68 million for FEMA matching funds from Hurricane Matthew;
$60 million for base student cost increase in K-12;
$45 million increase to the Medicaid maintenance of effort;
$12 million for higher education base funding increase;
$10 million to the local government fund; and
$9 million for Mental Health Telemedicine.
For the Technical Colleges:
$3.7 million in recurring base funding;
$47 million for Lottery Tuition Assistance;
$9.6 million for ReadySC;
$8 million for workforce scholarships/grants;
$3 million for Allied Health; and
$2.8 million for technology.
The bills will now be sent to the governor where he has five days to exercise his line item veto authority. If necessary, the legislature will return one final time this summer to address the governor's budget vetoes.
All budget documents can be found here.
Individual state agency budget requests can be found here.
More than sixty bills received third and final reading during the last week of the legislative session. That represents nearly half of all bills passed during the five-month legislative session. Click here to view all bills ratified this session.
Two new members of the General Assembly were sworn into office this past Tuesday after winning special elections to fill vacated seats. Republican Richard Cash will represent Senate District 3 seat covering northern Anderson County. Cash, a Powdersville businessman, fills the Senate seat vacated when Senator Kevin Bryant ascended to become Lieutenant Governor.
Republican Ronnie Young will represent House District 84 in Aiken County replacing former Representative Chris Corley, who resigned from the seat in January after he was arrested on domestic violence and weapons charges following a domestic incident in December. Young was serving as Chairman of the Aiken County Council and served on council for the past twenty years.
TAX STUDY COMMITTEE
The House Tax Policy Review Committee reconvened this past Tuesday for its first meeting of 2017 to hear a presentation on the rollout of the newly passed highway infrastructure funding plan. This fourteen member ad hoc committee was created last year by Speaker of the House Jay Lucas and is responsible for reviewing South Carolina's current tax code and submitting suggestions for reform to the Speaker. While there was initially some thought the committee might finish its work last fall and propose recommendations to the Speaker of the House prior to the start of the legislative session, the committee agreed to take a break during the highway funding debate. Chairman Tommy Pope (R-York) told the committee they will resume work at the end of the summer and meet throughout the fall in an effort to find ways to make our tax code lower, fairer and flatter. All options remain on the table, including removal of some $3 billion in sales tax exemptions.
COMING UP NEXT WEEK
The General Assembly has completed their work for the year unless they decide to return one final time to address gubernatorial vetoes. We will send a complete review of the legislative session in the coming weeks.