SC Senators advance budget with higher pay raises

COLUMBIA, S.C. (AP) — South Carolina's Senate Finance Committee unanimously advanced late Wednesday a budget that provides higher raises to state workers, pays for long-deferred maintenance at all public colleges, and spends more money on special needs students.

The 2012-13 state spending plan sent to the Senate floor provides 3 percent raises to most state employees, 5 percent raises to state law enforcement officers making less than $50,000, and 2 percent raises to teachers statewide. The plan also covers the rise in employees' health insurance premiums.

The House plan passed in March gave 2 percent raises to most, while providing a waiver for school districts that didn't get enough to provide the raises. The Senate set aside $48 million specifically for teacher raises. While the House gave public universities money for maintenance projects, the Senate also gives money to smaller and technical colleges.

The plan includes $36 million for special needs students to prevent further federal penalties.

It disperses an additional $40 million to local governments, boosts money for needs-based college tuition grants for the first time five years, and gives $4 million to the Office on Aging for services such as home-delivered meals that help seniors live independently in their homes.

The committee wrapped up its work a day after the Board of Economic Advisors certified an additional $292 million in revenue above earlier projections. That includes $155 million in one-time spending money coming in during the fiscal year that ends June 30 and $137 million in recurring funds added to next fiscal year's base projections.

"We were able to really do some things that really need to be done we weren't able to do otherwise," said committee Chairman Hugh Leatherman, R-Florence.

Gov. Nikki Haley has repeatedly said she wants any extra money used to either pay down debt or returned to taxpayers.

Leatherman said the Legislature should get credit for billions of dollars of tax cuts over the last 20 years.

"We're often labeled as spending every penny we get our hands on, when a big part of the budget is tax relief," he said. "Is that spending? No."

As approved Wednesday, the 2012-13 budget includes $752 million in tax relief, according to documentation distributed to senators.

That includes $554 million in property tax cuts required to come off the top of state revenue due to previously passed laws, $77 million toward keeping businesses' unemployment insurance down and $106 million in other business reimbursements. An additional $395 million is set aside in reserves.

The Senate plan matched the House's increases in state law enforcement, plus provided for 20 new officers at the Department of Natural Resources.

Other items maintained from the House plan includes $180 million set aside to pay the state's share to deepen the Charleston harbor.

The Senate plan also incorporates $15 million in tax relief from a bill the House passed two weeks ago, as the first of a four-year reduction in taxes for small business owners.

The measure approved 17-1 by the Finance Committee earlier Wednesday would cut taxes for small business owners who report their profits as personal income. Their tax rate would decrease from 5 percent to 3 percent over four years. Budget advisers estimate the measure would reduce state revenue by $15 million next year and $65 million annually when fully implemented, starting in 2015-16.

"This type of tax cut is good policy," Leatherman said. "When it helps mom and pop businesses, all that money stays in the state economy."

Budget officials estimate 60,000 small business owners would benefit, eventually saving roughly $1,000 each.

The House approved the bill as part of the majority GOP caucus' seven-bill tax package, three of which made it to the Senate.

"This legislation will help tens of thousands of small business owners and self-employed South Carolinians keep more of their money, reinvest in their businesses, and keep more of their hard-earned money," said Rep. Tommy Stringer, R-Greer, who led the caucus panel that crafted the bills.

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