(Published by the Office of Research of the House of Representatives)

March 16, 2012

The House of Representatives approved and sent to the Senate H.4813, the General Appropriations Bill, and H.4814, the joint resolution appropriating Capital Reserve funds, which together comprise the $6 billion proposed STATE GOVERNMENT BUDGET for fiscal year 2012-2013. The proposed budget includes $5.979 billion in general funds.

Nearly $400 million is placed in the financial reserve accounts that the state draws upon to cope with budget shortfalls, the General Reserve Fund and the Capital Reserve Fund. $549 million goes to the state’s property tax relief fund.

$77 million is devoted towards paying off the unemployment insurance loan that the state had to obtain from the federal government when South Carolina’ jobless benefit fund became insolvent. This State Unemployment Tax Authority (SUTA) debt funding is provided to reduce the unemployment insurance taxes that all the state’s businesses pay for their employees, amounting to an average savings of 12.3% or $51.11 for each worker.

An additional $10 million is provided for the Deal Closing Fund that the Department of Commerce uses to recruit new business to the state. The budget legislation also provides that this economic development fund is to receive South Carolina’s share of the multi-state mortgage settlement reached with the nation’s major lending institutions which is expected to be around $30 million.

The Harbor Deepening Reserve Fund is created within the State Ports Authority and $180 million is provided to pay the state’s full share of deepening the Charleston Harbor so that South Carolina can remain competitive in maritime shipping with a port capable of accommodating the larger vessels that will pass through the newly-expanded Panama Canal.

An additional $152 million is included for K-12 education, allowing for an increase in the Base Student Cost to $2,012 per student. Additional funds are to be used to provide a 2% pay raise for teachers. School districts that demonstrate they are unable to fund these pay increases may apply for a waiver. An additional $5 million is provided for the state’s Public Charter School District.

The budget legislation discontinues state-funded teacher salary supplements for National Board Certification by suspending the incentive program for new applicants during the coming fiscal year. A Joint Teacher Salary Study Committee is created to examine potential changes to the state’s teacher salary schedule that may include a pay for performance model.

$6.2 million is provided for school buses and the Department of Education is provided the flexibility of either purchasing or leasing vehicles.

Full funding is provided for the LIFE, HOPE, and Palmetto Fellows scholarship programs.

Over $24 million is devoted to worker training through the Ready SC Program at the state’s technical colleges.

$28.25 million is included to grant a 2% state employee pay raise. The increases needed to fund the Employee Health Insurance Program are divided equally between employer and employee, representing a monthly increase of $7.33 for the average employee. Full funding is provided for the employer share of the increases needed for the state’s retirement systems.

An additional 3% pay raise is provided for Class One officers at the Department of Public Safety, The Department of Probation, Pardon, and Parole Services, and the Department of Natural Resources for a total raise of 5% for these employees.

Over $21 million in new funds is provided for the state’s two primary law enforcement departments, South Carolina’s Law Enforcement Division (SLED) and the Department of Public Safety.

Funding is provided to add three Circuit Court judges and three Family Court judges to cope with caseloads.

Full funding is provided for the Medicaid program’s Maintenance of Effort which allows the program to continue to offer services at the current level. Funding for the state’s health insurance program for low-income residents accommodates the inclusion of around 70,000 children who already qualify for participation in the program, but had not yet been enrolled.

The Department of Health and Environmental Control is provided $1 million for the AIDS Drug Assistance Program, $1 million for child immunizations, and $1.8 million for community health centers.

Over $18 million in funding is restored for the Department of Mental Health.

$3.6 million is provided to Vocational Rehabilitation for a nearly complete match of available federal funds.

The House approved a suspension of the requirement for distributing 4.5% of the previous year’s state General Fund amount to the counties and municipalities and, instead, keeps the Local Government Fund at its current reduced level of $182 million. A flexibility provision is included that allows a political subdivision to reduce its support of any state mandated program or requirement by up to a percentage equal to the reduction in the Local Government Fund. Local governments may not, however, reduce support for solicitors, public defenders, or any judicial functions.

A budget proviso prohibits counties, municipalities, and all other local government entities from using taxpayer funds to pay for lobbying activities. The Governor’s Office is also prohibited from using General Fund appropriations to compensate employees who engage in lobbying activities.

The Department of Employment and Workforce is required to make a comprehensive report on its finances and conduct.

Funding is increased by $8 million for the destination-specific tourism advertising program at the Department of Parks, Recreation, and Tourism.

Funding is increased for the Forestry Commission by nearly $6 million to enhance the state’s capabilities in fighting forest fires.