Legislators are working in conference committee to finish a compromise budget for both chambers in the South Carolina General Assembly.
Part of Monday’s discussion included whether or not state agencies should be allowed to operate at a deficit. Under state law, all agencies must have a balanced budget unless they receive special permission from the Budget & Control Board, the state’s top financial oversight agency.
Some legislators were upset the state’s Medicaid agency and the Department of Corrections were allowed to operate more than $300 million in the red this past year. The Senate included a proviso in their version of the budget that would have taken away the B&CB’s authority to do that.
However, others warned there could be unintended consequences. Senate Finance Chair Hugh Leatherman (R-Florence) worried it could shut down a Trident Technical College training program for Boeing employees, which is currently $3 million over budget. He said that would break a promise South Carolina made to the company to train its employees through the technical college system.
I think the thought is great. The intent is wonderful. But, from a practicality standpoint, I’m very fully aware of doing something to the integrity of this state if we make a promise and don’t live up to it.
Sen. Harvey Peeler (R-Cherokee) argued for the proviso, saying there are ways to avoid running deficits, even though they may be undesirable– such as laying off teachers. Leatherman said the state has to maintain the training program, since it was part of the deal made with Boeing.
Other members of the committee warned that some agencies would be severely limited if a hurricane or other disaster hit the state. House Ways & Means Committee Chair Rep. Dan Cooper (R-Anderson) worried the state Emergency Management Division would be unable to properly respond to a disaster without additional funding afterwards.
While (the proposal) sounds good, and there are certain agencies that should follow it, it gets the ones you may need to have flexibility on that front.
The committee did not adopt the proviso.
On Tuesday, committee members will discuss how to divvy up an estimated $210 million in additional revenue. House leaders want to use $146 million to help pay off the state’s unemployment insurance debt. Senators want a larger chunk to go towards education.
— Both sides did agree to fund ETV indirectly, instead of using a line in the budget. Under the proposal, ETV would be paid by the different agencies that use its services. Senators had wanted to put it as a line in the General Fund. But House leaders were worried about a possible veto from Governor Nikki Haley, who has said the state should not be directly funding the network. Haley’s staff said she would allow the House version.
Another part of the budget would require local governments to be more explicit in how they use state funding. The proviso would not allow municipal governments to give state money to other entities unless that group provides a description of how it used the money.
The move drew some concern from Tim Winslow of the South Carolina Association of Counties. He said he understands the reason for it, but worries it may bit too broad in its terms. He said he would prefer the Legislature pass a bill approved by the Senate last month that would do essentially the same thing, but exempt certain direct services, such as landscapers and power utilities.
Legislators were mainly concerned about nonprofits that were indirectly receiving state money and were not accountable to state officials.