View from the Dome: House’s Tax Review Members Agree Property Tax Revisions Must Help Ed Funding

View from the Dome: House’s Tax Review Members Agree Property Tax Revisions Must Help Ed Funding

View from the Dome – Jan. 18, 2019

By Copper Dome Strategies, LLC

After the pomp and circumstance of the inaugural activities, the General Assembly got to work with numerous subcommittee and committee meetings. Gov. Henry McMaster released his Executive Budget outlining his spending priorities.

TAX

The Senate Finance Taxation System Review and Reform Subcommittee met on Tuesday, Jan. 15, and heard from two more interested parties on how to best reform our state’s complicated tax structure. Presentations were from Dr. Rebecca Gunnlaugsson from Acuitas Economics and Ellen Weaver from the Palmetto Promise Institute.

The subcommittee was formed by Senate Finance Chairman Hugh Leatherman (R-Florence) to review and propose ways to reform our state’s tax code. The subcommittee is co-chaired by Senator Sean Bennett (R-Dorchester) and Senator Vincent Sheheen (D-Kershaw). The Subcommittee also plans to look at the work of previous tax study committees.

The SC House Tax Policy Review Committee met Thursday, Jan. 17. This 14-member ad hoc committee was created in 2016 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. The committee, which has added several new members, revisited its proposed recommendations from last year and agreed that any consideration of property tax revisions would have to be within the context of education funding reform.

For the next week’s meeting, they intend to narrow their focus on income tax. Any recommendations drafted as legislation would go to the Ways and Means Tax Subcommittee chaired by Rep. Alan Clemmons (R-Myrtle Beach), who has joined this committee.

BUDGET

Gov. Henry McMaster released his Executive Budget of his recommendations to the General Assembly for funding for FY 2019-20. McMaster said his budget “invests heavily in K-12 education, returns $200 million of surplus funds back to the taxpayers who earned it, and proposes a path toward freezing tuition at South Carolina’s institutions of higher learning.”

His budget calls for a 5% teacher pay increase that will bring average teacher salaries above the projected southeastern average salary for 2020. In higher education, McMaster is proposing that in exchange for freezing in-state tuition and fees, an institution will receive a 6% increase to their annual base budget, representing their pro-rata share of a $36 million-dollar appropriation. He is also proposing an additional $63 million dollars to enhance our workforce partnerships, training, grants and scholarships to help students attend our state’s technical colleges.

The governor’s Executive Budget can be found here.

House Ways and Means budget subcommittees continued hearing state agency budget requests. On Tuesday, the State Board for Technical and Comprehensive Education presented its request to the subcommittee. System President Dr. Tim Hardee told the subcommittee the request includes $22.5 million in recurring base funding, $12 million for high-demand jobs skills training equipment and $51.1 million for Lottery Tuition Assistance. The state’s 16 technical colleges also seek $272 million for one-time capital projects.

The state’s General Fund revenue will include over $1 billion in new revenue from two years of a budget surplus. Budget writers will have an additional $498 million in new recurring revenue and $549 million in one-time revenue.

Individual state agency budget requests can be found here.

HEALTHCARE

On Tuesday, a press conference was held to announce the filing of legislation to legalize marijuana for the treatment of critically ill patients in the state. Led by Senator Tom Davis (R-Beaufort), proponents claim if passed this measure would be among the most restrictive in the country. Making it explicitly illegal to smoke medical marijuana, the proposal also lays out requirements for prescribing physicians and operators of medical cannabis dispensaries and also specifies a list of illnesses to which it could be applicable, including cancer, epilepsy, post-traumatic stress disorder and multiple sclerosis.

The law enforcement community, led by State Law Enforcement Division Chief Mark Keel, firmly opposes the bill, noting that legalizing marijuana in any form could create a “black market” for resale and potential abuse. The South Carolina Medical Association also opposes sections of the new bill that force physicians to be the access point for marijuana in South Carolina. This issue has been discussed in previous legislative sessions and will surely generate considerable debate again this year.

The Senate Medical Affairs Committee approved S.16 (Senator Rankin) that increases the amount of a prescription that may be refilled from a 10-day to a 30-day supply when authorization from the prescriber is not obtainable. The bill was amended by the full committee to change it to a 14-day supply. Also approved was S.169 (Senator Hembree), a Concurrent Resolution urging the Federal government to work expeditiously to remove barriers to conducting research on the use of cannabis to treat medical conditions. Both bills now go to the full Senate for consideration.

HIGHER EDUCATION

The Economic Development Legislative Subcommittee of the House Ways and Means Committee approved H.3576 (White, Cobb-Hunter and Garvin), the SC Workforce Industry Needs Scholarship (SC WINS). The bill establishes the SC WINS scholarship for students who are attending a two-year public technical college, majoring in a critical workforce area program, as defined and recommended by the State Board for Technical and Comprehensive Education and ratified by the South Carolina Coordinating Council for Workforce Development, and who are receiving a Lottery Tuition Assistance Program Scholarship (LTAP) for the current school year. During discussion, the critical areas included advanced manufacturing, healthcare, information technology and transportation logistics and distribution. The bill now goes to the full House Ways and Means Committee.

JUDICIAL/LEGAL

On Tuesday, a Senate Judiciary Subcommittee unanimously approved S.7 (Malloy, Climer, Goldfinch, Talley and Harpootlian), dealing with the Tort Claims Act limits. The bill increases the limits from a loss to one person arising from a single occurrence to $1 million and increases the total limits from a loss arising from a single occurrence to $2 million. The bill also requires the limits be adjusted annually in accordance with the Consumer Price Index. The bill now goes to the full Judiciary Committee for consideration.

ANIMAL WELFARE

The Senate Agriculture and Natural Resources Subcommittee on Animal Welfare unanimously approved S.105 (Campbell and Sheheen). This is the animal welfare bill that passed the senate last year and was reintroduced this year. The legislation was developed from recommendations of the Animal Welfare Task Force. The bill now goes to the full Senate Agriculture Committee for consideration.

INTRODUCTIONS OF INTEREST

HOUSE

H.3568 (Reps. Gilliard, Govan, Toole, Garvin, and others) House Resolution stating Dominion Energy should honor its representation to ratepayers and pay the one thousand dollar refunds. Referred to Committee on Labor, Commerce and Industry

H.3576 (Reps. White and Cobb-Hunter) Establishes the South Carolina Workforce Industry Needs Scholarship. Referred to Committee on Ways and Means.

H.3588 (Reps. Rose and Huggins) Increases penalties for ill-treatment of animals. Referred to Committee on Judiciary.

H.3595 (Reps. Elliott, G. M. Smith, Simrill and Stavrinakis) Increases the aggregate annual credit amount of the industry partnership fund tax credit. Referred to Committee on Ways and Means.

H.3602 (Rep. Rose) Ads an additional category of persons who may make healthcare decisions. Referred to Committee on Judiciary.

H.3623 (Rep. Mace) Joint Resolution requiring SLED to develop a pilot data integration and analytics system with various state agencies. Referred to Committee on Judiciary.

H.3628 (Rep. Hart) Requires electrical utilities to bury all power transmission lines within a municipality beginning in 2020. Referred to Committee on Labor, Commerce and Industry.

H.3639 (Reps. Taylor and Allison) Expands categories for military personnel entitled to in-state tuition. Referred to Committee on Education and Public Works.

H.3641 (Reps. Clary, McCoy, W. Newton, Simrill, Pope, Caskey and G. M. Smith) Relating to the Public Service Commission and its membership and duties. Referred to Committee on Labor, Commerce and Industry.

H.3642 (Reps. Clary, McCoy, W. Newton, Simrill, Pope, Caskey and G. M. Smith) Creates the Utility Oversight Committee. Referred to Committee on Labor, Commerce and Industry.

H.3643 (Reps. Tallon, Long, Johnson, Hardee, Bryant, and others) Exceptions to Waiver of Immunity regarding the Tort Claims Act. Referred to Committee on Judiciary.

H.3659 (Reps. McCoy, Rose, Ballentine, Wooten, W. Newton, Mack, and others) Enacts the “South Carolina Energy Freedom Act” enumerating specific rights for electrical utility. Referred to Committee on Labor, Commerce and Industry.

H.3660 (Reps. McCoy, Mace, Taylor, Bennett, Rose, Stavrinakis and Gilliard) Enacts the “South Carolina Compassionate Care Act” relating to the sale of medical cannabis. Referred to Committee on Medical, Military, Public and Municipal Affairs.

H.3664 (Reps. Pope, McCoy, Rose, Simrill, Davis and McCravy) Exemptions on limitations on certain injuries sustained by law enforcement in workers’ compensation. Referred to Committee on Judiciary.

SENATE

S.366 (Senator Davis) Sale of medical cannabis. Referred to the Committee on Medical Affairs.

S.380 (Senator Campsen) Joint Resolution to delay the property tax penalties by individuals affected by the government shutdown. Referred to the Committee on Finance.

S.386 (Senators Malloy, Goldfinch, Climer, Talley, Sabb and Harpootlian) Amends and reorganizes the existing exceptions to the South Carolinas Tort Claims Act. Referred to the Committee on Judiciary.

UP NEXT

Gov. McMaster will deliver his annual State of the State Address before a Joint Session of the General Assembly on Wednesday, Jan. 23 at 7 p.m.

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