Copper Dome Chronicle: 2023 Session Week 22

Welcome to this week’s edition of the Copper Dome Chronicle, sponsored by Advocatus. We strive for substantive writing with brevity, inspired by the book Smart Brevity; one of the best books about communications and writing we’ve read in years.

This week’s edition, covering June 5-9, is 1,324 words or about a 5.5 minute read. There are an unknown number of days remaining in the special session. Thanks for reading and sharing; we welcome your feedback and commentary!

1. Budget Conference Committee Reaches Agreement

After concluding the regular session without a budget and nearly a month of negotiations, the budget conference committee reached an agreement on H.4300 (FY 2023-2024 General Appropriations Act) and H.4301 (Capital Reserve Fund). Below are some big ticket items included in the final agreement.

State employees. Not only was the $121M.5 state health plan annualization funded but the committee allocated $155.6M for state employee pay raises: $2500 per FTE earning less than $50,000 annually and 5% increase in base salary for FTEs earning more than $50,000 annually. In toto, including an additional $40.1M in retirement system contributions, the committee invested $317.3M in state employees.

K-12 education. The committee allocated $115.1M in State recurring funds and $151.4M in Education Improvement Act (EIA) recurring funds for a total of $266.5M recurring funds for the State Aid to Classrooms budget line (these are net new dollars when accounting for budget lines rolled up into the State Aid to Classrooms line). These funds increase the state minimum salary schedule to $42,500 annually - a $10,000 increase from FY 2018-2019 just five years ago - and increase each step in the state salary schedule by $2,500. Also, the committee allocated $120M in EIA nonrecurring funds for school district capital projects, such as school building construction and renovation. This funding is in addition to the $100M appropriated in the current fiscal year for school buildings. Lastly, $39M (-$3M compared to House) allocated in EIA nonrecurring dollars for a “literacy instruction program,” which new State Superintendent of Education Ellen Weaver has stated literacy is her top priority.

Student tuition and scholarships. The committee allocated $124M to the state’s public 4-year and 2-year institutions to freeze in-state tuition for FY 2023-2024. Gov. McMaster has proposed tuition freezes for the past five years and the General Assembly has agreed with him again for a sixth consecutive year. The SC Workforce Industry Needs Scholarship (SC WINS) program received a large increase of $93.7M; last year the program received $17M. When combined with other state-based scholarships and student aid, a student can effectively attend one of the sixteen technical colleges in South Carolina without paying any tuition and incurring no student debt.

Human services. Several agencies whose missions are primarily to provide human services (i.e. Medicaid, health care services, social services) were allocated significant State recurring funds increases: the Department of Health & Human Services ($223.4M); the Department of Mental Health ($20M); and the Department of Social Services ($16.6M). These amounts do not include any State nonrecurring funds, most of which are considered earmarks or pass-throughs to non-state agency organizations such as community nonprofits.

The outdoors. Those who love the outdoors and conservation efforts will be pleased to learn the committee allocated the following State recurring funds increases: the Department of Natural Resources ($15M) and the Department of Parks, Recreation & Tourism ($1.2M). However most of the investments made in these agencies are State nonrecurring funds: DNR ($56.3M) and PRT ($265.7M). For DNR, $54.1M (96%) of State nonrecurring funds will remain with the agency; only $42.3M (16%) will stay with PRT. Additionally, the Conservation Bank would receive $25M and the Office of Resilience will receive $200M in State nonrecurring funds, as those agencies play key roles in land conservation efforts.

Law enforcement. Law enforcement agencies received solid increases in their State recurring funds appropriations: the Department of Public Safety ($40M); the Department of Corrections ($20.4); the Department of Juvenile Justice ($17.3); the State Law Enforcement Division (SLED, $7M); and the Department of Probation, Parole & Pardon Services (PPP, $5.6M). Included in the SLED allocation was funds for the new Center for School Safety and Targeted Violence. Additionally DJJ received $65M in State nonrecurring funds, 99% of which will stay with the agency to renovate and construct new facilities as well as improve security.

2. The $1 Appropriations

When reviewing the conference committee’s summary control document there are a few budget line items appropriated $1 when considering all fund sources. This indicates that one chamber’s version of the budget funded the line at some appropriation level, while the $1 amount represents the other chamber’s belief that the line item is lower funding priority. So when $1 is appropriated, the line item is in effect not funded. Note: unless otherwise noted, the fund source for these line items was State nonrecurring funds.

Additional General Reserve Fund Contributions. The original House budget allocated $108.9M in additional general reserve fund contributions. The Senate’s budget allocated $1. The House, in its second amendment (H2), allocated $174.6M. The final budget meets the state constitution requirement by appropriating nearly $140M but does not appropriate any additional general reserve fund contributions.

The Citadel: Duckett Hall Renovations. The original House budget did not include this line item. The Senate allocated $13M and the House in H2 allocated $1; the final budget appropriated $1.

Francis Marion University: Maintenance, Renovation, and Replacement. The original House budget allocated this line at $9M; the Senate allocated $1 but added a new line for Founders Hall Renovation at $9M. House H2 reversed the lines with $9M for maintenance and $1 for Founders Hall. The final budget appropriated $9M to Founders Hall and $1 for maintenance.

Lander University: Maintenance, Renovation, and Replacement. The original House budget allocated this line at $7.5M; the Senate allocated $3.5M but added a line for a Nursing Building at $4M. House H2 allocated $1 for maintenance but funded the Nursing Building at $4M and added a new line, Information Technology Security, at $3.5M. The final budget appropriated $1 for maintenance in State nonrecurring and used Capital Reserve funds for the Nursing Building ($4M) and the Information Technology Security ($3.5M).

SC State University: Maintenance, Renovation, and Replacement. The original House budget allocated this line at $7.5M in Capital Reserve Funds; the Senate allocated $1 but added a new line for Turner Hall Replacement at $54.7M ($44.7M State nonrecurring and $10M Capital Reserve funds). House H2 allocated $7.5M for maintenance and Turner Hall $2. The final budget appropriated $1 for maintenance and $54.7M (as funded by the Senate) for Turner Hall.

USC-Columbia: Rural Brain Health Network and Brain Health Institute. The original House budget didn’t fund this initiative through USC but rather via DHHS at $10M. The Senate allocated $35M ($5M State Recurring, $20M State nonrecurring, $10M Capital Reserve) via USC. House H2 allocated $2 in the USC section but in the DHHS section provided $10M State recurring. The final budget appropriated $5,000,002 ($5M State recurring, $1 State nonrecurring, $1 Capital Reserve) in the USC section and $0 in the DHHS section.

State Board for Technical and Comprehensive Education: Maintenance, Renovation, and Replacement. The allocations for the sixteen technical colleges changed in every version of the budget, but ultimately each college received an appropriation.

State Board for Technical and Comprehensive Education: readySC. The original House budget allocated $2M in lottery funds via the Proviso 3.6, commonly called the lottery proviso. The Senate allocated $2M in Capital Reserve funds and $1 in lottery funds. House H2 funded it with $2M in lottery funds, $1 in State nonrecurring, and $1 in Capital Reserve funds. The final budget appropriated $2M in lottery funds via the lottery proviso and $1 in Capital Reserve funds.

State Law Enforcement Division: Agency Vehicle Rotation. The original House budget allocated $500k; the Senate allocated $1. House H2 allocated $500k and the final budget appropriated $1.

Department of Corrections: Critical Capital Projects; Security and Maintenance Funds. The original House budget allocated $25M for critical capital projects. The Senate allocated $1 for critical capital projects and $10M for security funds. House H2 allocated $25M for critical capital projects and $1 for security funds. The final budget allocated $1 each for critical capital projects and security funds.