Explosive spending, questionable provisos define next year’s budget

State lawmakers this week approved what will be the final version of next fiscal year’s $32 billion-plus budget, pending vetoes issued by the governor. The General Assembly will take up any vetoed items when it reconvenes next Tuesday for the final time this month.  

Not only is this budget the largest in state history, it contains a multitude of year-long provisos that alter state law and have little to do with actual spending. These include changes that would expand legislative power over the state’s economy to giving lawmakers the “unconditional right” to intervene in legal challenges to election laws.  

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Do these provisos belong in the budget? 

Adding lawmakers to an economic development board 

This proviso would add the chairmen of the Senate Finance and House Ways and Means Committee (or their designees) to the Coordinating Council for Economic Development – a board managed by the Department of Commerce that is primarily engaged in awarding grants for a broad range of economic development projects.  

This is one of the most concerning provisos added to the budget, as it would give select legislative leaders even greater power to shape the state economy, and would violate the “one subject rule” under the South Carolina Constitution, which requires that items in the budget be “reasonably and inherently related to the raising and spending of tax monies”. Adding members, particularly lawmakers, to a state board is a completely separate matter from issuing guidance on how to spend money – even if that part of that board’s job is to award state funds. 

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Giving lawmakers the “unconditional right” to intervene in election law challenges 

This proviso would establish that the House speaker and Senate president, on behalf of their respective bodies, have an “unconditional right” to intervene in a court action that challenges: 

• The validity of an election law; 
• An election policy; or 
• The manner in which an election is conducted 

If this sounds familiar, it’s because lawmakers filed identical legislation earlier this year, which passed the Senate but was never taken up by the House. It is common practice for lawmakers to insert language from dead bills into the state budget as provisos, but this proviso is particularly egregious as it does not involve funding. 

It should be noted that a similar proviso dealing with legislative intervention (applying more generally, not just to election-related challenges) already exists in the budget. This proviso is similarly in conflict with what is allowed under the state constitution.  

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Suspending restrictions on mobile optometry units  

This proviso would suspend a section of state law restricting where eye doctors offering mobile services can operate, which is normally limited to working from a licensed health care facility.  

The fact that “mobile” optometrists are limited to very specific locations under the law would seem to completely undermine the point of offering mobile services, and this is an issue that should be addressed by the Legislature. However, the budget is not the proper mechanism to rectify this matter, as budget provisos expire after one year, and should be limited to directing state spending.  

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Fewer checks on higher education spending  

Under this proviso, the state’s largest universities (University of South Carolina-Columbia, Clemson and the Medical University of South Carolina) would be exempt from traditional approval and review requirements for a range of projects if they cost less than $5 million. Projects by smaller universities and tech schools would enjoy the same exemptions if they cost less than $2 million. As this proviso would suspend state law, and deals primarily with oversight, it should not be in the budget. 

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Reduction/removal of match requirement for tourism funds 

Per this proviso, the Department of Parks, Recreation and Tourism (PRT) would fully waive the private match requirements normally needed to receive Destination Specific Tourism Marketing Grants, if they were paid from non-recurring funds. The PRT director could also reduce matching requirements for grants funded with recurring funds at their discretion. (Read more about the program here) 

While this proviso is at least loosely related to spending, it would seem fiscally irresponsible to reduce/waive match requirements for a program that is already incredibly generous to its recipients, and should likely not exist in the first place.  

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The budget by the numbers 

General funds: $10.7 billion – The general fund is comprised of tax revenue and is the only category of state spending debated by lawmakers. 

Federal funds: $9.5 billion – These are funds received from the federal government. These dollars is not free, however. Nearly all federal funds come with strings attached, including program matching requirements, mandates for future state spending, and various other policies that South Carolina must comply with in order to get funding. 

Other funds: $12.3 billion – Other funds make up the largest category of state spending, but are perhaps the least discussed. They include various fines, fees and other dedicated revenue sources – such as the gas tax (which lawmakers renamed a “fee” in 2017).  

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How are your tax dollars being spent? 

Generally speaking, the only real discussion that takes place on the budget is how new and leftover money is to be spent, of which there is around $1.8 billion for next fiscal year (a combination of roughly $520 million in recurring funds and $1.3 billion in non-recurring funds). 

Here’s a look at some of those spending items: 

General 

• State employee pay increase of 2.5% – $59,437,400 
• Increased health insurance costs – $5,928,000 
• Increased mandatory contribution to state employee retirement plan – $32,411,836 

Department of Commerce 

Lawmakers appropriated over $32 million in surplus funding to the S.C. Department of Commerce, which represents a 62% increase over its base appropriation amount. Items funded with this money include: 

• Gallo economic development project – $8,300,000. These funds are being used support the construction of a production facility and distribution center owned by the E. & J. Gallo Winery company. A $16 million grant was also given to Chester County (where the plant is to be constructed) to support the project.    

• Deal closing fund – $3,700,000. Dollars form this fund are awarded by the Coordinating Council for Economic Development, which high-ranking lawmakers are trying to make themselves members of via the proviso discussed earlier.  

• LocateSC – $4,000,000 (The Nerve wrote about this program here) 
• PGA Championship 2021 sponsorship – $360,000 

Education (K-12 and higher ed) 

• Minimizing tuition increases – $46,256,012. While these funds are intended to keep colleges, universities and tech schools from raising their tuition rates, lawmakers removed the budget proviso that required schools not raise tuition as a condition to receive the funds. Without the proviso, there is nothing stopping schools from raising their tuition. 

• Bus driver salary increase 5% – $4,181,714   
• Teacher salary $1,000 increase – $72,063,180  
• Infrastructure funding for disadvantaged schools – $100,000,000 

SC Legislature  

Senate

• Operating costs and reapportionment combined – $6,977,175. Reapportionment includes the redrawing of electoral districts using the most recent census data. It is unclear why the Senate combined these two categories of spending into a single line item; doing so makes it impossible to know how much is being allocated for each purpose.   

House

• Reapportionment – $2,000,000