View From the Dome (June 4, 2021): House Ways and Means Committee Unanimously Adopts New Version of $31B State Budget

As part of SCACPA’s dedication to Advocacy on behalf of the CPA Profession, here is your weekly update of actions being taken during the 124th Legislative Session, prepared in cooperation with our lobbying partner, Copper Dome Strategies.

Friday, June 4, 2021

The House Ways and Means Committee adopted its revised version of the state budget on Wednesday. A Conference Committee met Tuesday to resolve differing versions of legislation relating to state-owned utility Santee Cooper.

All federal, pandemic-related unemployment benefit programs will be terminated statewide effective June 30. The termination is due to an unprecedented workforce shortage, including those in the hospitality, tourism, manufacturing and healthcare sectors. For more details, click here.

COVID Vaccination Reminder: All South Carolinians aged 12 and older are eligible to receive COVID-19 vaccinations. Online appointments can now be made at scdhec.gov/vaxlocator. For more information from DHEC on the virus, click here. Stay safe!

BUDGET

The House Ways and Means Committee on Wednesday unanimously adopted its revised version of the state budget. After receiving the Senate amended version of the FY21-22 General Appropriations Act, H.4100 (Ways and Means Committee) last month, the House committed the bill back to the Ways and Means Committee. Following passage of the House version of the budget in March, the State Board of Economic Advisors (BEA) raised the budget estimate by $203 million. Legislators now have $385 million in new recurring revenue to appropriate for the next fiscal year beginning July 1.

The $31 billion budget includes $9.9 billion in general fund revenues and one-time surplus revenue of $1.3 billion. Ways and Means Chairman Murrell Smith (R-Sumter) noted that since state agencies operated under a Continuing Resolution for the current fiscal year, this plan incorporates two years of funding requests and needs.

The budget adopted is $522 million above the base from the previous budget and includes:

$250 million – Pandemic Stabilization Reserve Fund
$71 million – 3% state employee pay raise
$72 million – $1,000 teacher pay increase
$65 million – Raises K-12 base student cost to $2,516
$10 million – Full-day 4-year-old kindergarten
$3 million – Statewide Broadband Office
$10 million – Broadband expansion
$16.7 million – DHHS – Medicaid Management Information System (MMIS)
$14.8 million – DHHS – Medicaid Maintenance of effort
$1.5 million – DJJ – Marine and wilderness programs
$7.6 million – Judicial Department Virtual Courtroom Expansion
$10 million – Judicial Department Case Management Modernization

For the Technical Colleges:

$10 million – Recurring base increase (tuition mitigation)
$51 million – Lottery Tuition Assistance
$10.3 million – Maintenance, renovation and replacement
$2.5 million – ReadySC
$16 million – Workforce Scholarships and Grants
$17 million – SC WINS
$18 million – High-demand job skill training equipment

The above amounts for the technical colleges are included in the Senate version of the budget and will not need to be addressed by the Conference Committee. $134.6 million was appropriated individually to the 16 technical colleges. The Senate version includes $134.8 million, and some of the amounts to the colleges differ slightly. Those amounts will need to be worked out in conference committee.

The full House will meet next week for budget debate on the floor. The bill will then go back to the Senate, where they are likely to non-concur on the House amendments setting up a Conference Committee to resolve the differing versions.

The Senate did not amend the House-passed version of the Capital Reserve Fund H.4101 (Ways and Means Committee), which appropriates one-time and surplus revenue. It is enrolled for ratification.

In addition to the annual state budget, the General Assembly must still determine how to appropriate $2.1 billion in federal funds from the American Rescue Plan Act. Also up for debate is the $525 million from the Savannah River Site (SRS) settlement, much of which is likely to be directed to the three-county region primarily impacted by SRS. Those decisions are likely to occur sometime this fall.

The Revised Ways and Means Committee budget can be found here.

The governor’s executive budget can be found here.

Individual state agency budget requests can be found here.

The Senate Finance Committee budget spreadsheet can be found here.

ENERGY/UTILITIES

A Conference Committee met Tuesday to resolve differing versions of H.3194 (Reps. Lucas, G. M. Smith, Simrill, Rutherford and others) relating to the potential sale and reforms of state-owned utility Santee Cooper. The Conference Committee adopted a report that makes reforms to the quasi-state agency that would make it operate more like an investor-owned utility and provide greater state oversight. However, they deleted the section that included a process for the eventual sale of the utility.

The House conferees were Representatives Jay Lucas, Murrell Smith and Todd Rutherford. Senate conferees were Senators Luke Rankin, Shane Massey and Brad Hutto.

The Conference Report must now be approved by the full House and Senate.

SINE DIE ADJOURNMENT

The General Assembly has adopted H.4285 (Reps. Lucas, Simrill and Rutherford), a Concurrent Resolution to allow the bodies to meet post adjournment at the call of the President Pro Tem of the Senate and the Speaker of the House of Representatives to consider certain specified matters, including the state budget. The schedule is as follows:

June 8-10 – House Floor Budget deliberations

June 14-18 – Conference Committee meets

June 21-23 – Conference Report adopted by both chambers

June 29 – Address gubernatorial vetoes

The General Assembly will meet again in the fall to address redistricting and appropriate the $2.1 billion in federal funds from the American Rescue Plan Act and the $525 million from the Savannah River Site (SRS) lawsuit settlement.

UP NEXT

The full House will meet to adopt a revised version of the state budget.

REAR VIEWS 2021

Look to SCACPA’s “View from the Dome” updates on the SCACPA website and our social media every week during the legislative session and beyond. You can always stay up-to-date with SCACPA’s respective blog pages for Governmental Topics, Legislative Topics and Regulatory Topics.

May 28: As SC Budget Undergoes Revisions, State Agency Directors Seek More Funds for Staff Salaries, Filling Vacancies

May 21: General Fund Revenues are $412M Above Expected Collections, Per BEA Report

May 14: Conformity Bill Awaits Gov.’s Signature; Decouples with 10 Federal Provisions, Exempts $10,200 of Unemployment Payments

May 7: Tax Conformity Bill Reaches Calendar for Senate Readings

April 30: With Two Weeks Left in Legislative Session, Here are 10 Tax Bills About to be Considered by the Full SC House Ways and Means Committee

April 23: House is Signaling its Approval of Senate’s COVID-19 Liability Safe Harbor Act

April 16: Crossover Deadline Passes, Senate Finance Committee Starts Draft of New $31B State Budget

April 9: Conformity Moves Through House, with Tax Break for $10,000 in Unemployment Benefits

April 2: Senate Approves Bill Concerning Attorney’s Fees Connected to DOR Actions

March 26: House Receives Senate’s Bill for Pass-Through Trade and Business

March 19: Conformity Begins its Journey with Approval from a House Ways and Means Subcommittee

March 12: Senate Finance Committee to Consider a Pass-Through Trade and Business Bill