SC Policy Council: Senate passes modified tax commission, refuses to bar a general tax increase

Senate passes modified tax commission, refuses to bar a general tax increase

The South Carolina Senate passed a bill this week establishing a new commission that would examine state tax policy. Senators voted down an amendment offered by Senator Kevin Bryant (R-Anderson) Wednesday that would have barred the commission’s report from proposing a tax increase.

Senate Finance Committee Chairman Hugh Leatherman (R-Florence), the bill’s original sponsor, led the call to table Bryant’s amendment and leave the door open on raising taxes. In a 20-19 vote, the Senate voted to allow the commission to recommend raising taxes.

Senators voted as follows. An aye vote was to allow a tax increase. A nay vote was to bar the commission from proposing a tax increase.

Ayes 20; Nays 19

AYES

Alexander Cleary Coleman

Cromer Ford Hutto

Jackson Land Leatherman

Leventis Lourie Malloy

McGill Nicholson O’Dell

Reese Scott Setzler

Sheheen Williams

Total–20

NAYS

Bright Bryant Campbell

Courson Davis Elliott

Fair Knotts Martin, L.

Martin, S. Massey McConnell

Mulvaney Peeler Rankin

Ryberg Shoopman Thomas

Verdin

Total–19

The Senate did adopt an amendment by Senator Phil Shoopman (R-Greenville) that retains the General Assembly authority to debate and amend recommendations proposed by the final TRAC report. The original bill language allowed an unelected commission authority to recommend binding changes to sales and income taxes while prohibiting lawmakers from making changes.

An amendment by Senator Tom Davis (R-Beaufort) also effectively doubled the commission’s authority to include $7 billion in fine and fee revenue collected by the state. The original bill limited its scope to the $6 billion state general fund.

Earlier this month, the Policy Council released a report highlighting the state budget is actually three times larger than often reported and is comprised of the general fund, federal funds, and also fine and fee revenue. The general fund had been the only portion historically debated.

“Two weeks ago, before the Policy Council Report came out, most people didn’t even know these funds existed,” Davis said. “Now, for the first time this ’shadow budget’ is going to be examined.”

Senator Greg Ryberg (R-Aiken) included a statement in the Senate journal stating his opposition was due to the bill’s failure to prohibit raising taxes. Ryberg offered two amendments that would have required a documentation of communication between commissioners and government officials, but both amendments were defeated. Senator John Courson (R-Richland) was the only other Senator to vote against the bill Wednesday, but he did not include a written reason.

The Senate did adopt an amendment by Senator Mick Mulvaney (R-Lancaster) similar to the Ryberg amendment that prohibits commissioners from having contact with lobbyists outside of formal presentations to the commission.

Senators formally passed third reading of the bill and sent it to the House Thursday. After voting for the bill Wednesday, Senator Kevin Bryant (R-Anderson) reversed course and included a statement in the Senate journal opposing the final bill because it does not include a prohibition on raising taxes.

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