SC Senate passes budget with no earmarks but a pay raise for legislators

COLUMBIA — Senators advanced a spending plan Wednesday that would give themselves a pay raise, threaten to take money back from the city of Columbia, and keep lottery tickets cash-only.

The $14.4 billion spending plan approved by the Senate on a 41-2 vote was largely similar to the version passed by the House in March.

Both plans include a $1,500 pay raise in the minimum salary for teachers, a 2% raise for the state’s lowest-paid employees and completion of the Legislature’s 2022 law that phased in income tax cuts. That will reduce state revenues by more than $290 million in the fiscal year starting July 1.

“It’s a good budget that funds the core functions of government,” Senate Finance Chairman Harvey Peeler, R-Gaffney, told reporters soon after the budget passed.

Sen. Tom Fernandez, R-Summerville, and Sen. Margie Bright Matthews, D-Walterboro, were the two to vote against the spending package as a whole.

Bright Matthews’ vote came after a speech in which she called the process a dictatorship with little transparency. In particular, she railed against Peeler’s decision not to fund any of legislators’ requests for local projects, known as earmarks, saying that would hurt the poor, rural parts of her district.

“The struggling ones are those rural counties, where they need every cent they can get,” Bright Matthews said.

The local spending had gotten “totally out of hand” in the last few years, Peeler said, so he decided to pause the whole process to rein it in.

The tally topped $430 million last year, falling from the high of $713 million in 2023.

SC lawmakers set to spend over $430 million on local projects

Starting next year, he hopes to have communities apply for money through a grant process, he said.

“It was best to stop cold turkey,” Peeler said.

The budget isn’t finished yet. The Senate’s vote sent the plan back to the House, which will adjust its initial proposal before the two chambers work out their differences. Spending that’s the same in each plan, such as the teacher raises, won’t change. Those amounts are locked in ahead of negotiations.

Spending increase

One of the amendments approved Wednesday would give every legislator an $18,000 pay raise.

By a vote of 24-15, senators voted to increase legislators’ monthly allotment for “in-district compensation” from $1,000 to $2,500 — in other words, from $12,000 to $30,000 annually.

That’s in addition to their salaries of $10,400 a year, which hasn’t changed since 1990, and their stipends for meals and lodging as well as mileage while they’re in session.

The $1,000 monthly stipend, which is technically meant for their legislative duties but can be spent on anything, hasn’t changed since 1995.

Legislators are generally unwilling to give themselves a raise as it can backfire politically. The last time they tried was 2014, when then-Gov. Nikki Haley vetoed the attempted $1,000 raise, and senators sustained her veto without discussion.

But a raise is needed to keep up with inflation, said Sen. Shane Martin, a Pauline Republican who co-sponsored the amendment with Sens. Matt Leber, R-Johns Island, and Darrell Jackson, D-Hopkins.

With 170 members of the Legislature receiving that monthly stipend, the change would cost an additional $3 million a year.

Peeler was among senators voting against it.

“I just didn’t personally feel like we needed that,” he said.

Conversion therapy

Another clause inserted in the budget Wednesday threatens to revoke $3.5 million from South Carolina’s capital city if it doesn’t repeal its ban on so-called conversion therapy.

Since June 2021, a Columbia city ordinance has threatened a $500 fine for attempting to alter a juvenile’s gender identity or sexual orientation through counseling. It’s unclear if anyone has been fined under that rule.

While the budget clause adopted by senators applies broadly to any city in South Carolina, only Columbia has such an ordinance.

The Senate vote came a day after Attorney General Alan Wilson sent a letter to the Columbia City Council asking its members to repeal the ordinance to “avoid any future legal action.”

His letter pointed to a 2022 state law that says only the state can license and regulate medical fields, to include social workers and counselors. The law barred local governments from passing their own restrictions.

He contends the ordinance also violates First Amendment freedoms of speech and religion by telling counselors they can’t offer faith-based guidance but rather must affirm a patient’s gender.

“This ordinance crosses the line, violates the law, and must be repealed,” Wilson said in a statement.

Wilson asked city officials to respond by May 5. His letter came after he co-led a coalition of Republican attorneys general trying to overturn Michigan’s ban on conversion therapy for minors.

Senators took the approach of threatening to yank money from the city.

If the clause ends up in the final budget and city officials don’t change the ordinance, the city stands to lose its $3.5 million share of state aid distributed to cities and counties statewide, according to the Revenue and Fiscal Affairs Office.

“You run afoul of the First Amendment, you tell people they can’t have an opinion and force conformity to ideological position, then there should be consequences,” said Sen. Josh Kimbrell, a Spartanburg Republican who proposed the clause and questioned the initial ordinance.

Sen. Tameika Isaac Devine, a Columbia Democrat who voted for the ordinance when she was on Columbia City Council, argued the budget clause would infringe on a local government’s right to conduct its own business.

But her protests using Senate rules failed, and the amendment passed.

Debit cards and lottery tickets

Not included in the Senate’s spending proposal was a clause included in the House plan that would allow people to buy lottery tickets using debit cards. That part of the budget was thrown out for attempting to change permanent state law through a one-year budget.

State law requires lottery tickets to be purchased with cash only. It was a restriction gambling opponents insisted on when the Legislature created the lottery in 2001.

Gov. Henry McMaster recommended changing that in his executive budget proposal, saying adding debit cards would be necessary to continue funding college financial aid.

Allowing debit card sales could increase lottery revenue, which funds college scholarships, by about $52 million annually, according to estimates by the state Lottery Commission, which has been pushing for the change for years.

Tuition freeze

Unlike the House, the Senate again blocked colleges from raising tuition for in-state students.

The House spending plan would allow the state’s universities to raise tuition for incoming students, so long as they lock in that tuition for the rest of their time at the school.

College presidents told legislators keeping tuition stagnant, as they have done for more than five years, is unsustainable. Unable to increase tuition for in-state students, colleges looking to keep up with rising costs will have to continue raising prices for out-of-state students, potentially eventually pricing them out, college presidents told a House panel earlier this year.

Senate budget writers would give universities $55 million, which is slightly more than the House plan, though still nowhere near the $130 million schools collectively requested to offset tuition raises.

The committee responsible for the higher education portion of the budget was “trying to keep our costs down for all of our young people who want to attend a secondary education,” said Sen. Ronnie Cromer, the Prosperity Republican who leads that subcommittee.