House Creates Budget Amendment
May 8, 2008
House Creates Budget Amendment
The House passed several amendments on the Senate budget amendment today. Some of the key items funded are:
· 1% State Employee Pay increase
· Fully funded Education Finance Act
· Fully funded scholarship programs
· More money for the Department of Corrections
· $4.5 million for state university Light Rail (broad-band high speed network)
· $10 million for Destination Specific Grants for Parks and Tourism
· The University Center of Greenville
· $2.5 million for Hydrogen grants
In order to fund these programs, the House took money from numerous different sources, including:
· Eliminating most of the Capital Reserve Fund Items
· Recapturing $10 million from Competitive Grants
· Recapturing $14.4 million from the Farmer’s Market
In addition to funding state agencies and other programs, the budget often includes provisos and legislation. This current budget amendment includes legislation that would:
· Offer marriage tax relief
· Redirect car tax revenues to DOT and SIB
· Create the Research Centers of Excellence Review Board and Centers of Excellence Matching Endowment
· Create a Spending Limit Reserve Fund.
The House did vote down several special projects, despite many attempts by representatives to have their favored projects added back into the budget.
Transparency Suffers a Blow in the House
The Senate passed a transparency proviso that mandated all counties put their check register online. But the House refused to follow suit. Instead, the House passed a week proviso that simply requires the Comptroller General to provide the service to the counties, not that they participate.
In the upcoming budget conference committee meeting, legislators will have to place one of the provisos in the final budget. If true transparency is the goal, then the Senate proviso should be adopted.
Cigarette Tax Increase Passed the Senate
The Senate approved a 50 cent increase of the state cigarette tax. The vote was 33 to 11 with one abstention. The House already approved a 30 cent tax increase. The bill now moves to conference committee for House and Senate lawmakers to reconcile the differences. Governor Sanford said today he will veto any tax increase that is not offset by a tax cut.
To find out how your Senator voted go to: http://www.scstatehouse.net/sess117_2007-2008/sj08/senjour.htm.
The Senate bill passed today directs that money be used to increase the number of South Carolinians eligible for Medicaid. Taxpayers will ultimately shoulder the burden when Medicaid growth outpaces cigarette tax revenue and lawmakers are forced to cover the difference out of the state general fund.
Other states that have used cigarette tax increases to fund state programs have often found actual revenue collections fall short of the predicted amount. For example,
· Georgia projected $180 million in new revenue after a 25 cent increase in 2003, but actual revenue was just $117 million — 35 percent less than the projected amount
· Virginia projected $62 million in new revenue after a 10 cent increase in 2005, but actual revenue was $52 million — 16 percent less than the projected amount.
