In a move Governor Nikki Haley called “morally wrong,” lawmakers in the South Carolina Senate overrode her veto of money set aside to help close economic development deals instead of directing it to help struggling homeowners.
At issue was the state Department of Commerce’s Closing Fund, which is used to help build local infrastructure for new companies. Lawmakers set aside an extra $10 million for that fund using part of $32 million that South Carolina received under a national mortgage settlement. That settlement was reached earlier this year by the U.S. Justice Department several banks accused of improperly foreclosing on homes.
It was an unusual situation because the veto pitted Haley against leaders from her own party. In fact, a majority of lawmakers who supported the governor in this particular vote were Democrats, especially amongst members of the Legislative Black Caucus.
The veto was narrowly overturned in the Senate Wednesday 28-13– one more vote than the required two-thirds needed to supersede the governor.
Haley said the settlement money should have gone to the state’s housing agency to help those South Carolinians struggling with foreclosure.
“There is no bigger advocate for Commerce than me,” Haley told reporters Wednesday, “(But) when you have $10 million that is sent in to help people with foreclosures of their houses, it is morally wrong to spend that money for Commerce.”
However, State Rep. Gary Simrill (R-Rock Hill) noted the South Carolina State Housing Finance And Development Authority already has nearly $300 million set aside to help homeowners. He said the budget rules do not allow them to change where the funds are going once the budget is passed. Instead, the $10 million would have gone into the state’s General Fund to be used next year.
“It’ll just be sitting in that account. What if a big company in the meantime comes to South Carolina and… we’re competing with Alabama, Florida, or North Carolina? We can’t touch that money,” he said on the House floor Tuesday.
But State Sen. John Scott (D-Columbia) disagreed with Simrill. “Even without this… the Closing Fund will receive $5 million more than last year,” he said Wednesday, “Put it however you want to put it. It’s wrong.”
The debate was easily longer than for any of Haley’s other 80 vetoes. At first, senators upheld it, falling shy of the two-thirds majority 27-14. But leaders tried again a half-hour later and were successful the second time 28-13.
In the end, the legislator who provided the crucial passing vote was Sen. Robert Ford (D-Charleston). Ford had spent much of the previous 90 minutes condemning the Senate leaders for putting the money into Commerce, but eventually voted in favor of it, saying he wanted to show he could work with fellow senators.
Senate Finance Chair Hugh Leatherman (R-Florence) said he respected the governor’s opinion, but added, “We need to put as much money into that Closing Fund as we possibly can to bring companies in here to create jobs for our people.”
Haley said that the Commerce Department’s deal-closing fund already has $15 million— 50 percent more than last year— and an additional $38 million in the state’s Rural Infrastructure Authority which could be tapped, if needed.