SC legislators advance $14.7B spending plan that includes pay raise for themselves

COLUMBIA — A pay raise for legislators, lottery ticket payments using debit cards and a potential reduction in funding for the city of Columbia were all part of a spending plan a panel of legislators approved Wednesday.

Much of the actual spending in the state’s $14.7 billion budget, including a $1,500 bump in the state’s minimum teacher pay and the completion of an income tax reduction already in law, was locked in when the six-member committee started negotiating Tuesday.

A $1 billion hike in revenue projections Tuesday helped legislators quickly settle the remaining differences between the House and Senate spending plans.

The newly recognized revenue allowed budget negotiators to choose whichever plan had the larger amount. That includes sending the state Department of Transportation $200 million to fix aging bridges and $35 million for Hurricane Helene cleanup (the House version), instead of the Senate’s $100 million and $25 million.

Negotiators also approved an additional $65 million to pay private K-12 school tuition and other costs for up to 10,000 eligible K-12 students under a law Gov. Henry McMaster signed earlier this month. (That combines the $45 million the House plan put toward the scholarships and $20 million in the Senate version, funded in different parts of the budget.)

The vast majority of the $30 million legislators approved last year for a similar scholarship program, which was partially thrown out by the state’s high court, is still available.

SC legislators get extra $1B to spend as budget negotiations begin

The budget conferees left roughly $500 million of the unexpected revenues unspent. That could become part of discussions next year in changing the state’s income tax structure. It could also serve to fill holes amid economic uncertainties, said House Ways and Means Chairman Bruce Bannister, R-Greenville.

“That’s left us a lot of flexibility, which I think is a good, responsible way to do it,” Bannister said.

Not included in this year’s budget were earmarks.

Removing all one-time funding requested by legislators, usually for their districts, sped up the process, said Senate Finance Chairman Harvey Peeler, R-Gaffney.

While some legislators have said the decision will disproportionately hurt poor, rural areas that lack the tax base to pay for projects themselves, Peeler and Bannister said a one-year moratorium was needed to rein in spending that swelled into the hundreds of millions of dollars the last several years.

“It’s something that needed to happen this year,” said Peeler, who made the initial announcement refusing earmarks this year. “It had gotten out of hand — too many earmarks, too large — and we had to have a full stop.”

Legislators are expected to take a final vote on the spending package next week. It takes effect with the July 1 start of the fiscal year.

Pay raise for legislators

Budget clauses that direct how to spend money made up most of the items of contention this year.

That included a directive that effectively increases legislators’ pay by $18,000 over the fiscal year.

The clause inserted into the Senate plan during that chamber’s floor debate was approved unanimously Wednesday by the panel’s three representatives and three senators. It officially raises their allowance for “in-district” expenses from $1,000 to $2,500 per month. But there are no limitations on how it can be spent, so it’s really just a raise.

That adds to their salaries of $10,400, which hasn’t changed since 1990. They also receive stipends that are meant to cover meals and lodging as well as mileage while they’re in session. Their $1,000 “in-district compensation” hasn’t changed since 1995.

The last time legislators attempted to increase it was in 2014, when then-Gov. Nikki Haley vetoed the effort. In that time, inflation has caused costs to rise drastically, legislators who proposed the change said.

“It’s just time,” Bannister told reporters.

Peeler, who voted against the raise on the floor, said he voted for it Wednesday in order to reflect the will of the Senate, which voted 24-15 on the raise. But he said he still didn’t fully support it personally.

McMaster recently told reporters he’ll decide whether to veto the clause after the final package reaches his desk. But he hinted he may let it go, unlike his predecessor.

Being a legislator is officially a part-time job. But legislators work long hours, often late into the night. It makes sense that inflation has hit them hard too, he said.

“They need to be able to work without a whole lot of distraction,” McMaster said. “I’d like to see exactly what the details are, but everyone, if they’re working at home, they have a home office, an office in their business, I think they’re entitled to be reimbursed for all their expenses, and that’s the nature of this.”

Other spending clauses

Also adopted by negotiators was a clause that would revoke an estimated $3.7 million from the state’s capital city unless it repeals a ban on so-called conversion therapy.

The Columbia City Council deferred a vote Tuesday on the 2021 ordinance that threatens a $500 fine for anyone who tries to alter a juvenile’s gender identity or sexual orientation through counseling. Officials wanted to wait and see whether the clause was included in the final version of the budget.

Attorney General Alan Wilson sent the city a letter earlier this year asking council members to repeal the ban to “avoid any future legal action.” Under a 2022 state law, only the state can license and regulate medical fields, including counselors, Wilson wrote.

Columbia postpones vote on conversion therapy ban awaiting state budget decision

The clause included in the state budget threatens to pull state aid from any city with an ordinance banning the practice, but Columbia is the only city in the state with such a ban.

Bannister spoke with members of the Columbia City Council before the vote. He said the officials he spoke with — he declined to name them — supported including the threat in the budget, as they feared the city would lose any lawsuit challenging the ordinance.

Adding the clause “would encourage their members to think a little harder about it,” Bannister said.

Another adopted budget directive would allow people to buy lottery tickets using debit cards, which McMaster recommended as part of his executive budget. Opponents of gambling insisted on banning sales using credit and debit cards in 2001, when legislators created the lottery.

But as fewer people regularly carry cash with them, allowing sales using debit cards could increase revenue by about $52 million, the state Lottery Commission estimated. The money pays for college scholarships, and it could potentially pay for K-12 students to attend private schools under the voucher law legislators passed.

Editor’s note: The amount of money in the budget for the state’s K-12 scholarship program for private tuition and other expenses has been corrected. The $65 million total in additional aid comes from two separate sections of the budget: $45 million from the general fund, as in the House version, and $20 million from lottery profits, the Senate version. The budget negotiators adopted both.