By Copper Dome Strategies

Friday, Jan. 17, 2020

IN THIS EDITION: The second session of the 123rd General Assembly convened on Tuesday, Jan. 14. It is the second year of the two-year legislative session, and all 124 House members and 46 senators will be on the ballot in November. This week saw little floor action but numerous subcommittee meetings and budget hearings in both bodies. Gov. Henry McMaster released his Executive Budget on Monday.

GOVERNOR’S EXECUTIVE BUDGET

Gov. Henry McMaster released his Executive Budget for FY 2020-21 on Monday, Jan. 13. The governor’s budget is his recommendation to the General Assembly for funding for the next fiscal year.

McMaster’s priorities include cutting taxes, education funding including teacher pay raises, an expansion of full-day 4-year old kindergarten and public safety. His budget calls for a teacher pay increase that would place South Carolina in the 25th percentile nationally for educator’s salaries, up from 41st, according to the governor’s office.

With the increase in state revenue, McMaster is asking lawmakers to send more money back to South Carolinians in the form of tax cuts, starting with $160 million to reduce personal income tax brackets by 1% over the next five years. The governor is also proposing the allocation of $162 million in non-recurring dollars from the Capital Reserve Fund for maintenance and care of state institutions of higher education, with over $76 million going to the technical colleges.

Highlights of the executive budget include:

  • $250 million for rebate checks for taxpayers
  • $160 million for reducing personal income tax brackets by 1% over the next five years
  • $213 million to raise teacher salaries by $3,000
  • $100 million to make prisons safer
  • $162 million to pay for deferred maintenance of state institutions of higher education
  • $26 million to freeze tuition at public colleges, universities and technical colleges
  • $52 million to expand full-day 4-year-old kindergarten
  • $7.8 million for provider rate increases through the Department of Health and Human Services

For the technical colleges:

  • $28 million for recurring base funding support at the 16 technical colleges statewide
  • $51 million for Lottery Tuition Assistance
  • $18 million for equipment for high demand job skill training
  • $50 million for Career and Technology Centers in rural areas
  • $30.5 million for workforce scholarships
  • $76 million for maintenance at the technical colleges

The governor’s Executive Budget can be found here.

BUDGET

House Ways and Means budget subcommittees began meetings to hear state agency budget requests. On Wednesday, the State Board for Technical and Comprehensive Education presented its request to the Higher Education Subcommittee. System President Dr. Tim Hardee told the subcommittee the request includes $28 million in recurring base funding, $18 million for high-demand job skills training equipment and $51.1 million for Lottery Tuition Assistance. The state’s 16 technical colleges are seeking $20 million for maintenance and repair projects and funding for ongoing initiatives such as ReadySC, SC Wins scholarship funding and workforce grants and scholarships.

The South Carolina Public Charter School District appeared before the Public Education and Special Schools Subcommittee to request $38 million in per pupil funding. The request is an increase of 20% to accommodate for growth and inflationary costs. Executive Director Elliott Smalley noted the SCPCSD has approved three new charter schools that are projected to open in school year 2020-21 and enroll approximately 580 additional students, with existing schools adding approximately 4,750 students through additional grades and expansion. In total, the SCPCSD anticipates 25,200 students will be attending SCPCSD charter schools by August 2020.

The Department of Health and Human Services (DHHS) appeared before the Healthcare Subcommittee Wednesday requesting $47.3 million in state funds for Medicaid cost increases. The agency is also seeking $7.8 million for provider rate increases and $7.4 million for the Medicaid Management Information System.

With the state’s economy seeing record-level unemployment combined with rising wages and new residents, economists tasked with setting the revenue estimate for the FY 20-21 state budget have added $815 million to the $9 billion state general fund. They are projecting a budget surplus of over $1 billion.

The governor’s executive budget can be found here.

Individual state agency budget requests can be found here.

EDUCATION REFORM

Both Gov. McMaster and legislative leadership had said the 2019 legislative session would produce long-overdue reforms in K-12 education. The House passed its version of education reform H.3759 (Reps. Lucas, Allison, Felder, Pope, Simrill, Rutherford and others) in early March. However, after hearing complaints from teachers and others about the legislation, the Senate did not pass their version S.419 (Sens. Hembree, Malloy, Turner, Setzler, Sheheen and Alexander) known as “The South Carolina Career Opportunity and Access for All Act.” Instead, Senate Education Committee Chairman Greg Hembree (R-Horry) wanted to bring more stakeholders to the table and held numerous subcommittee and committee meetings throughout the summer and fall. After many changes to the bill, the full Senate Education Committee passed it out of the Education Committee in December, and the bill is now on the Senate calendar for debate by the full body.

ENERGY/SANTEE COOPER

Legislators agreed last year on a plan H.4287 (Reps. Lucas, G. M. Smith, Simrill, Rutherford and others). It required the Department of Administration to hire experts to seek and evaluate not only bids from qualified offerers to purchase Santee Cooper but to seek offers for potential management contracts of the state-owned utility – in addition to a reform plan from Santee Cooper itself regarding its future. The legislation required the Department to make their recommendations to the General Assembly by Jan. 15, 2020, or ask for an extension not to exceed 60 days. The department has asked for the extension but it is not expected to take the full 60 days. Once the recommendations are delivered, legislative hearings will be held by the House Ways and Means Committee and the Senate Finance Committee who will in turn make recommendations to their respective bodies for further consideration.

Legislators will have three options: sell Santee Cooper to a for-profit utility; allow another utility or firm to take over and manage Santee Cooper; or allow Santee Cooper to reform itself.

On Thursday, the Senate gave third and final reading approval to S.996 (Senators Alexander, Rankin and Hutto) which allows for the extension of the application and screening process for candidates for the Public Service Commission. The bill now goes to the House for consideration. Additionally, the House Labor, Commerce and Industry Committee approved H.4827 (Reps. Lucas, Sandifer, Forrester and Mack), the companion to the Senate bill. That bill now goes to the full House for consideration.

NEW MEMBERS

Two new House members were sworn into office Tuesday:

Republican Melissa Oremus (R-Aiken) won the District 84 special election in Aiken County last fall. Oremus is the owner of small businesses in Aiken including Bisquecuts & Glazy. The special election followed the death of state Rep. Ronnie Young.

Patrick B. Haddon (R-Greenville) won the District 19 special election to fill the seat held by Representative Dwight Loftis, who was elected to the state Senate last spring. Haddon is a businessman and farmer residing in Greenville.

APPOINTMENTS

The Joint Screening Committee for The Legislative Audit Council approved the reappointment of Philip F. Laughridge of Columbia. Laughridge holds the seat for a CPA or Licensed Public Accountant. The appointment now goes to the full Senate for consideration.

Also, the Senate Family & Veterans’ Services Committee approved the governor’s nomination of Mrs. Connie D. Munn as Director of the Department on Aging. Munn is currently serving as the agency’s deputy director. Munn previously served as the Chief of Health and Human Services and the Area Agency on Aging Director for Santee-Lynches Regional Council of Governments. Prior to working at SLRCOG, Munn worked for the Department of Mental Health. A resident of Sumter, she earned her Bachelors of Art Degree in Social Work from Columbia College with a minor in child welfare, and her Masters of Social Work, from the University of South Carolina, where she specialized in geriatrics. The appointment now goes to the full Senate for consideration.

INTRODUCTIONS OF INTEREST

HOUSE

H.4817 (Reps. G. R. Smith, Clemmons, Rutherford, Magnuson and Jones) Enacts the “South Carolina Data Privacy Act.” Referred to Committee on Judiciary.

H.4827 (Reps. Lucas, Sandifer, Forrester and Mack) Joint Resolution extending the screening process for candidates for the Public Service Commission. Referred to Committee on Labor, Commerce and Industry.

H.4830 (Reps. G. M. Smith and Sandifer) Relating to utilities and electric cooperatives that seek to bury cables underground. Referred to Committee on Labor, Commerce and Industry.

H.4833 (Rep. Hixon) Procedures for the exercise of eminent domain by pipeline companies. Referred to Committee on Agriculture, Natural Resources and Environmental Affairs.

H.4836 (Rep. Lucas) Statewide expansion of the South Carolina Child Early Reading Development Program. Referred to Committee on Ways and Means.

H.4940 (Reps. Sandifer and Forrester) Joint Resolution to establish the “Electricity Market Reform Measures” Study Committee. Referred to Committee on Labor, Commerce and Industry.

H.4943 (Reps. Sandifer, Spires, Forrester, Stavrinakis and others) Joint Resolution to create South Carolina Rural Communications Infrastructure Study Committee. Referred to Committee on Labor, Commerce and Industry.

H.4957 (Rep. Huggins) Relating to municipal water and sewer councils. Referred to Committee on Labor, Commerce and Industry.

H.4960 (Reps. G. R. Smith, Magnuson, McCravy and Jones) Enacts the “Forming Open and Robust University Minds (FORUM) Act of 2020” relating to free speech on college campuses. Referred to Committee on Education and Public Works.

SENATE

S.985 (Senator Hembree) Provides that local school boards shall establish 12-month cycles for schools operating on year-round school calendars. Referred to the Committee on Education.

S.989 (Senator Goldfinch) Relating to appointments to the Horry-Georgetown Technical College Commission. Referred to the Committee on Education.

S.990 (Senator Climer) Eliminates the Certificate of Need requirements for health care facilities. Referred to the Committee on Medical Affairs.

S.993 (Senator Hembree) Relating to permits for alcoholic beverages at festivals. Referred to the Committee on Judiciary.

S.996 (Senators Alexander, Rankin and Hutto) Joint Resolution extending the screening process for candidates for the Public Service Commission. Referred to the Committee on Judiciary.

S.998 (Senators Davis and Climer) Joint resolution establishing the “Electricity Market Reform Measures Study Committee.” Referred to the Committee on Judiciary.

S.999 (Senators Rankin, Young and Sabb) Joint Resolution to fix noon on Wednesday, Feb. 5, 2020, for judicial elections. The Concurrent Resolution was referred to the Committee on Operations and Management.

S.1007 (Senators Talley and Campbell) Relating to exemptions under the alcoholic beverage control act. Referred to the Committee on Judiciary.

S.1010 (Senators Young, Massey and Setzler) Adds two non-voting members to the Aiken Technical College Commission. Read the first time and ordered placed on the Local and Uncontested Calendar.

S.1014 (Senator Scott) Requires hospitals to develop strategic plans before licensure to ensure underserved areas have meaningful access to care in the event of a merger. Referred to the Committee on Medical Affairs.

S.1018 (Senators Malloy, Hutto, Gregory, Shealy and Talley) Enacts the “South Carolina Juvenile Justice Reform Act of 2020.” Referred to the Committee on Judiciary.

UP NEXT

Gov. McMaster will deliver his annual State of the State address to a joint session of the General Assembly on Wednesday evening, Jan. 22.

REARVIEWS 2020

Look to SCACPA’s ‘The View from the Dome’ for State House Developments on Tax Issues Through SC’s 2020 Legislative Session

Jan. 10: South Carolina’s Pending Tax Bills and Your 2020 Legislative Preview