Weekly Legislative Update. February 19 – 21, 2019

What lawmakers did:

This week, the House Ways and Means Committee finalized their draft of the appropriations bill, adopting a state spending plan of $30 billion. Spending highlights include a 2% employee raise, a 4% teacher raise, $40 million for a new voting system, $15 million to relocate the USC School of Medicine, $1 million for a sports marketing grant program under the Department of Parks, Recreation and Tourism, and $4 million for LocateSC – an economic development program under the Department of Commerce. Lawmakers anticipate taking up the budget in the House next month.

Committee hearings on the education omnibus bill also continued this week. This bill (H.3759) would overhaul the K-12 education system, including the creation of a “Zero to Twenty Committee” to “monitor the state education and workforce pipeline to continually determine the education and training levels required by state employers” (which is similar to the mission of the Coordinating Council on Workforce Development). The bill as currently written would also eliminate some student tests while adding others, and revise the “Read to Succeed” program by adding more testing and reporting requirements (among other things). Lawmakers are in the process of developing a committee amendment, but the language has not yet been published.

Meanwhile, the Senate Finance Committee amended and passed S.298, which would require higher education funding to increase by the same amount the General Fund increases. The bill would also create a new tax-funded trust fund, to be divided between colleges/universities and student scholarships. Most concerningly, the amended version also includes the unaccountable mini-governments (“enterprise divisions”) proposed two years ago. The bill will now go to the Senate floor calendar.

Finally, several significant bills passed the full Senate or House, and will now go to the opposite chamber. These include:

  • 3659 – Expands customer-based solar generation (net metering), requires utilities to consider purchasing power from small renewable power generation companies
  • 3760 – Charges fees from every dentist in SC to underwrite the deficit in the South Carolina Medical Malpractice Joint Underwriting Association
  • 3253 – Creating mobile barbershop permits
  • 3092 – Creating a new permit for Mallard Duck-hunting areas
  • 260 – Classifying informal groups as “Unincorporated Nonprofit Associations” and regulating them
  • 504 – Firing, reconstituting Allendale special purpose district board
  • 160 – Requiring DOR to implement online tax lien database for public access
What lawmakers said:

At the beginning of this week’s budget meetings, Ways and Means Chairman Murrell Smith said:

“[W]e asked Mr. Rainwater to talk about how much tax cuts we’ve enacted over the years, and how much that is, and I think it’s important for us to know that right now, we would have – we’ve cut out $3 billion of revenue as a result of numerous tax cuts that we’ve had over the year. So instead of an $8 billion dollar budget – a $9.3 billion recurring revenue, we’d have $12.3 billion, and that’s been returned to the taxpayers of this state by this General Assembly.”

He went on to add, “I just want to point out as you hear us talk about spending money all the time, it looks like we’re returning a lot of the money back to the taxpayers, as we should.”

Of course, the total budget is actually $30 billion, not $9.3 billion, and $3 billion certainly does not make up for ten times that amount in proposed 2019 spending.

Chairman Smith, in another telling statement, remarked, “You’re going to hear, throughout the budget process…that fines and fees are down, and that’s not the way to fund government, and you know, I think what we’re gonna do is take a hard look during the off-session at fines and fees and the way to bring them back into the General Fund, and let’s fund government off of the revenues that are coming in, rather than this.”

Why would that be a problem? Because, simply put, there are restrictions on what lawmakers can do with tax dollars vs. revenue from fines and fees. Tax dollars (which comprise the General Fund) can be used to pay general obligation bond debt, but not revenue bond debt. Revenue bond debt owed by state agencies (like Santee Cooper’s $15.8 billion in revenue bond debt) is not backed by the state, and can only be paid from non-tax sources – like fines and fees. Mingling these categories of state funding could easily lead to unconstitutional spending, which in turn could help trigger the statewide property tax automatically imposed if the state defaults on a debt payment.

What lawmakers filed:

This week lawmakers filed 91 new bills, 37 of which were honorary/sympathy resolutions. Of the remaining 54 bills, 17 address governmental structure issues. For instance, S.530 would revise the state procurement code (the law governing state contracts, etc.). H.4006 would allow legislative delegations to declare a state of emergency and suspend local housing authority commissioners (which would give lawmakers even more power over local matters), H.4031 would make judges elected by the public, and two bills would lift the requirement that the State Department of Employment and Workforce Review Committee submit no less than three nominees for the Executive Director of the Department of Employment and Workforce to the Governor for his consideration – H.4054 temporarily, and S.540 permanently.

Nine bills would significantly change natural resources laws. H.4008 would repeal the Department of Natural Resources’ ability to issue revenue bonds for the Heritage Trust Program, while H.4010 would lift the cap on how much land the Heritage Trust Program can acquire. Two bills (H.4009 and H.4012) would restructure the Department of Natural Resources, H.4015 would eliminate the New Horizons Development Authority, and H.4019 would prohibit the Department of Parks, Recreation and Tourism from leasing parts of Hunting Island for residential use, charging fees for water service, etc. Finally, H.4021 would allow the building and leasing of cabins and end the ban on swimming in state parks.

13 regulatory bills were filed, including S.539, which would regulate electric cooperatives’ elections and transparency measures; H.4007, which would prohibit the transportation of certain wild animals without a permit; and S.549, which would prohibit employers from inquiring into a potential employee’s criminal history until the interview process.

One bill (H.4045) would require the State Law Enforcement Division to create a “hate crimes database” containing individuals convicted of crimes based on their victims’ race, gender, etc., while another bill (H.3999) would enact “constitutional carry” – the open, permitless carrying of firearms. H.4023 would allow concealed weapons permit holders to carry on college campuses.

Finally, five bills were filed that address elections. S.537 prohibits lawmakers from using state funds or their official letterhead for “unsolicited mass communication” within ninety days of an election where their name is on the ballot. H.4047 would prohibit candidates from running for multiple offices in the same election cycle, and would prohibit multiple party nominations for the same candidate in the same election cycle. H.4048 would require the Department of Corrections to educate inmates before their release on how to restore their voting rights. Finally, H.4046 would lift the requirements that political parties advertise their conventions, and H.4044 would allow voters to voluntarily designate a political party affiliation.

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