Jun 2, 2017
South Carolina State House Month in Review: May 2017
On May 11, the South Carolina General Assembly adjourned sine die on the
2017 legislative session. Legislators
returned on May 23 s required by the sine die resolution to take up the budget and vetoes,
but due to the lack of business before the House, members were informed
that unless they had other official business to address, it was unnecessary
for them to attend session.
The Senate met briefly on May 23 to ratify acts and approve S. 671, a joint
resolution to allow the legislature to
fund the government at current levels in case a budget is not approved
before July 1, the beginning of the state’s fiscal year. Senate Finance
Chairman Hugh Leatherman (R-Florence) stated that the
continuing resolution was just a precaution and would be used only in the
unlikely event of a budget not being approved by the legislature before
Budget Conference Committee Concludes Work
The conference committee working to bring the House and Senate versions of
the state’s FY18 budget together announced its conference report on May 31.
Approved funding includes $60 million to increase the state’s per student
allocation to $2,425 for public schools, $12 million for the state’s
colleges and universities, and $10 million for the Local Government Fund.
The second piece of the
pension system fix was also approved, providing state funding to state agencies, cities, counties and other
local entities to cover half of the required 2 percent increase in payroll
allocation. The increase is part of the statutory fix to help shore up the
state’s ailing pension fund and will go into effect July 1, 2017, for FY18.
The Commission on Higher Education (CHE)
took a hit in the budget, and not just with a loss of funds. The conferees agreed to remove the
CHE’s authority to review college construction or renovation projects.
These projects will now be reviewed by the Joint Bond Review Committee and
the State Fiscal Accountability Authority.
The House will return to Columbia on June 6 to consider the conference
Legislature Overrides Veto on Roads Bill
On May 9, the House and Senate approved the long-debated roads funding bill
with veto-proof majorities.
was immediately sent to the governor for consideration upon passage by the
House. Gov. Henry McMaster (R), who previously
promised to veto the bill
, wasted no time and vetoed the legislation before the end of the day, with
veto message posted on Facebook.
On May 10, after
several rousing speeches on the floor about executive leadership, or
lack thereof on this issue, the House voted 95-18 to override the governor’s veto. The Senate
followed with a 32-12 vote to override the governor, completing three years
of passionate debate over the gas tax in the state.
Effective July 1, 2017, the legislation will increase the state’s 16.75 cents per gallon gas tax
to a total of 28.75 cents per gallon by the year 2022. The legislation’s 12
cents per gallon increase, named the motor fuel user fee, will be phased in
as a 2 cents per gallon increase in each of the six years of the plan. The
state’s gas tax has not been subject to inflation indexing over the last 30
years, which will not change since the final legislation does not include
the Senate’s inflation indexing provision.
The legislation requires that all revenues raised from the 12 cents per
gallon increase be placed into the newly created Infrastructure Maintenance
Trust Fund, which is required to use these funds exclusively for repairs,
maintenance and improvements to the existing transportation system.
Other fees were also increased or introduced to raise revenue for the trust
fund, including a $16 increase on every biennial registration and license
fee in the state and an increase in the vehicle sales tax, now called the
Infrastructure Maintenance Fee. For vehicles purchased and immediately
registered in the state, the Infrastructure Maintenance Fee is 5 percent of
the sales price or fair market value, capped at $500. For vehicles not
initially registered in the state, a one-time $250 fee will be imposed upon
registration in South Carolina.
New fees for hybrid and other alternative fuel vehicles
were also introduced to help offset the loss in motor fuel user fees from
more efficient vehicles.
The legislation is expected to raise approximately $630 million each year
for road repairs after full implementation. The plan is estimated to cost
South Carolina drivers who travel 15,000 miles in a car that gets 25 miles
per gallon about $1.40 per week in additional motor fuel user fees after
Several of the Senate's various tax credit and rebate proposals, originally
intended to offset the cost of the increase to the state’s taxpayers as
well as help make the legislation veto-proof, are included in the final
legislation. The legislation includes the main tax relief program proposed
by the Senate, the motor fuel user rebate, which will be a refundable
income tax credit for preventative maintenance on the state’s registered
private passenger vehicles. The legislation also implements a state earned
income tax credit that will be a nonrefundable credit equal to 125 percent
of the federal earned income tax credit. The state’s students also received
an increase in the cap on their refundable income tax credits for higher
education tuition, which will now be up to $1,500 for two- and four-year
programs. Finally, in an effort to lower the cost of business in the state,
manufacturers will get a small break on their property assessment ratios
phased in over the six-year plan.
DOT Governance Reforms
Additional Department of Transportation (DOT) reforms were also included in
the final legislation. Legislators opted to add an additional at-large
member to the DOT Commission, the governing body of the DOT, to make full
commission membership an odd number to avoid tie votes. All nine
commissioners will be appointed by the governor and vetted in some manner
by the legislature in a plan inspired by the Ethics Commission appointment
process. The seven congressional district seats on the commission will be
vetted and confirmed by the legislation delegations of the congressional
district, which will now include all legislators who represent any portion
of the congressional district. The two at-large members will be confirmed
by the House and the Senate.
Ongoing Ethics Probe Leads to Another Indictment
On May 16,
another Republican lawmaker was indicted
on public corruption charges in the state’s ongoing ethics investigation.
Rep. Rick Quinn (R-Lexington), who faces two counts of
misconduct in office, stated that he is “asking for a speedy trial so this
can be resolved as quickly as possible.”
Rep. Quinn is the third state lawmaker indicted in the last six months
after investigation by Pascoe, a state solicitor for Calhoun, Dorchester and Orangeburg. Rep. Quinn, a
former majority leader in the House, currently serves on the House
On May 23, the legal team representing Rep. Quinn asked the court to remove
Solicitor David Pascoe from the case, arguing that
Pascoe wrongfully viewed documents
seized in a raid on a business run by Quinn’s father that would be
constitutionally protected as attorney-client privilege. After an all-day
hearing, a judge asked for written arguments on the issue by June 5 before
he makes a decision.
Vacant State House Seats Filled
Lt. Gov. Kevin Bryant’s (R) vacant Senate seat was filled
on May 30, after businessman Richard Cash (R-Anderson)
defeated a last-minute write-in campaign
from supporters of his primary opposition, Carol Burdette, former
Pendleton, S.C., mayor.
(R-Aiken), chairman of the Aiken County Council, was
elected to fill a vacant seat in the House, handily defeating two other candidates on the ballot. Young replaces
Chris Corley, who resigned from the House in January after an arrest on
domestic violence charges from an incident in December 2016.
June 20 Special Election Primaries Take Place
The May 16 GOP runoff for the 5th Congressional District nomination
was too close to call, triggering an automatic recount
under state law. The State Election Commission
certified the results
on May 19, naming former Rep. Ralph Norman (R-York) as the
winner over Rep. Tommy Pope (R-York) by a 221-vote margin.
Norman will face Democrat Archie Parnell and several
third-party candidates in the June 20 general election.
Democrat Wendy Brawley
won the Democratic primary runoff on May 16
in her bid to win the vacated seat of Rep. Joe Neal, who unexpectedly
passed away earlier this year. Brawley will face Republican Bill Strickland in the June 20 general election.
Phase I of Pension Systems Fix Finalized, Phase II Begins
On April 25, Gov. Henry McMaster (R)
signed legislation authorizing a plan to fix the state's ailing
retirement system. Despite approving the plan, Gov. McMaster said the bill “does not address
the single most important measure which would ensure the long-term
financial stability and viability of the state's retirement system." He
believes the state needs a deferred compensation, or 401k-style, plan to
offer to state employees, as opposed to the current defined-benefit plan,
which promises the state's employees an exact monthly payment based on
length of service and salary.
The approved plan, which went into effect immediately upon the governor’s
signature, decouples and raises the employer and employee contribution
percentages. The employer contribution will be raised, by 2 percent, to
13.56 percent on July 1 for FY2018, and will then increase by 1 percent
each year until FY2024, for a total of 7 percent over the course of the
plan. By the end of the plan, the employer contribution will be 18.56
percent. The employee contribution will also be increased on July 1 from
8.66 percent to 9 percent, but will be capped at 9 percent for the
The Joint Committee on Pension Systems Review, who crafted the plan, met
again on May 9 to map out its continued study and discussion on improving
the system. Discussion over the interim will likely cover deferred
compensation plans or hybrid plans for future state employees. The
committee asked interested parties to submit input regarding potential
plans or any other ideas for improving the state’s pension system.