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SC House to start budget debate; billion-dollar split looms

South Carolina Budget
Jeffrey Collins/AP
/
AP
The 2022-23 South Carolina budget sits on the desk of state Rep. Bill Whitmire, R-Walhalla, on Thursday, March 10, 2022, in Columbia, S.C. (AP Photo/Jeffrey Collins)

The South Carolina House will begin debate on the state's $14 billion budget Monday, but one billion-dollar bit of business probably won't get settled until well into the spring.

With an unprecedented amount of money to spend between the booming economy boosted by federal stimulus money and cash lawmakers saved over the past few years in case the COVID-19 pandemic crashed revenues, there is plenty of areas lawmakers can make "transformative change," which are buzzwords around the Statehouse in 2022.

There is $1 billion set aside to repave roads, improve safety and expand interstates — like jump-starting the expansion to three lanes for all of Interstate 26 from Columbia to Charleston. All state employees and most teachers and state law enforcement officers get raises, new schools will be built and a new state constructed if the House adopts the plan as written by the House Ways and Means Committee.

But one $1.4 billion question won't be answered. That's the difference in income tax cuts and rebates being offered by the House and Senate.

The House plan has no rebates and spends $600 million this year to cut the top income tax rate from 7% to 6.5% and collapse all other rates to 3%. If the economy remains strong, the top rate would eventually fall to 6%, costing the state about $1 billion per year.

The Senate plan spends $1 billion cutting the state's top income tax rate from 7% to 5.7% and an additional $1 billion providing rebates from $100 to $700 to every tax filer regardless of whether they owe income tax.

While the House budget is written, the Senate is still working on its version of the spending plan for the fiscal year that starts in July. So it isn't clear what items in the House plan may get left out of the Senate's budget to pay for the bigger tax cut package.

Whether the House alters its budget to give more room for more tax cuts also remains to be see in the coming week.

Each chamber has passed its tax cut plan. Small groups of senators and House members will start negotiating the differences between the tax cut proposals and likely the different versions of the budget in late April or early May.

Other highlights of the House's budget include:

— $230 million to boost the minimum pay for teachers regardless of experience by $4,000. Starting teachers in every district would be paid at least $40,000 under the plan.

— $150 million to help rural, poorer districts build new schools and $100 million to replace old textbooks and classroom materials. There is $2.6 million in the plan to increase the checks given for teachers to buy supplies from $275 to $300.

— A 3% raise for all state employees and a $1,500 bonus,

— More than $40 million to boost the starting pay for state law enforcement officers and provides raises for some current officers.

— $20 million to buy more body cameras for police officers and set up a grant program for smaller police agencies to get bulletproof vests.

— $65 million for the Department of Mental Health to improve inpatient and outpatient care and provide more mental health services in schools.

— $4 million to the State Election Commission to pay for additional election audits and improve security.