FY 2024-2025 Budget Brief: Senate Finance Committee Version
The Senate Finance Committee (SFC) met on April 9 and 10 to debate and vote on H.5100 (FY25 budget) and H.5101 (capital reserve bill). The SFC documents have been posted online, including the summary control document. The total budget is slightly more than $40.8B:
$13.6B State recurring and nonrecurring funds (general funds);
$13.3B Other recurring and nonrecurring funds (other state funds such gasoline excise tax);
$13.6B Federal funds (formula and grant funds).
Below is a review of big ticket items, but there is plenty more material to review and discuss before the budget bill hits the Senate floor the week of April 22. When dollar figures are discussed, these are new, incremental dollars and not the total appropriation for a budget line item. Example: in the base budget a line item has an appropriation of $10M and in the SFC budget there is $1M appropriation in new recurring funds. That line item has a new total appropriation of $11M ($10M base + $1M from the summary control document).
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Resources
FY 2024-2025 General Appropriations bill versions
Big Ticket Items
1. Income tax relief. The SFC recommended accelerating the schedule state income tax cut by an additional 0.1%, which has a revenue reduction of nearly $100M. The House version provided one-time property tax relief of $500M from general funds used in years past to keep the Homestead Exemption (HEX) Fund (HEX) fully funded. One of the key differences between the two budgets is the treatment of HEX Fund.
2. K-12 education. The committee allocated $170.28M in State recurring funds and $29.72M in Education Improvement Act (EIA) recurring funds for a total of $200M recurring funds for the State Aid to Classrooms budget line. The committee increased the teacher state minimum salary schedule with a starting salary of $47,000 and increased the experience factor from 23 years to 28 years. The SFC and House budgets provide the same starting teacher salary increase but use different paths to achieve that policy goal. Instructional materials were allocated $43.9M in the SFC budget compared to $43.5M in the House budget. The SFC budget allocates $28.2M compared to $35M in nonrecurring funds for the purchase or lease of school buses. State Superintendent Ellen Weaver had her requests for $30M for the new Education Scholarship Trust Fund program and $10M for the Palmetto Math Project fully funded in both versions, in addition to her request to increase teacher pay.
3. Infrastructure. The SFC echoed Governor Henry McMaster’s call for an investment in bridges with a $100M bridge modernization program funded with State nonrecurring funds; the House allocated $200M. The SFC recommended additional infrastructure investments: $200M in State nonrecurring funds to the County Transportation Funds program and $117.4M in State nonrecurring funds for a rural road safety program. The State Ports Authority would receive $55M from the Capital Reserve Fund bill for land acquisition in North Charleston in both versions.
4. State employees. The $107.5M state health plan annualization is funded in both versions. SFC allocated $84.3M for state employee raises: $1,375 per FTE earning $50,000 or less, and 2.75% increase in base salary for FTEs earning more than $50,000. The House allocated $41.1M for state employee pay raises: $1000 per FTE earning $66,667 or less, and 1.5% increase in base salary for FTEs earning more than $66,667.
5. Student tuition and scholarships. Both versions of the budget allocate 0ver $538M in lottery funds were allocated to various post-secondary scholarship programs, including the SC Workforce Industry Needs Scholarship (SC WINS) program with $95M, which is one of Gov. McMaster’s top priorities. The two versions differ however on tuition mitigation: SFC allocated 67.9M while the House allocated $57.5M to the state’s public 4-year institutions, MUSC, and 2-year USC branch campuses; however, no funds were allocated to the state’s sixteen technical colleges for tuition mitigation.
Additionally, the SFC version would allow a 2% increase in in-state tuition while the House would freeze in-state tuition, continuing current policy. Gov. McMaster has proposed tuition freezes for the past five years and the General Assembly has agreed with him for the past four budgets.
The new veterinary school at Clemson University would receive $175M from State nonrecurring funds and the Capital Reserve Fund bill; the House allocated $22M from the Capital Reserve Fund. During the previous budget the amount of funds allocated for this project was one of the most debated topics during the conference committee. Lastly, SFC did not allocate funds for a study on the future of the higher education system, which was one of Governor McMaster’s highest priorities. The House budget allocated $3M State nonrecurring.
6. Health and social services. The Department of Health & Human Services was allocated $46.1M for Medicaid maintenance-of-effort requirements and to increase provider rates; the House allocated $105.1M. The SFC version funded some additional budget requests: $3M for nursing salary increases at the Department of Public Health; $10.8M for more patient capacity at the Department of Mental Health; $8.8M in State nonrecurring funds for Phase 2 of a new SNAP benefits system at the Department of Social Services.
7. Department of Veterans’ Affairs. One of the newest state agencies received a significant investment of $87.5M for its veterans nursing homes and military enhancement fund to support local military communities; the House allocated approximately $89M. The SFC allocated $20M for capital improvements to veterans nursing homes. Additionally, $5M was allocated to Stone Pavilion in both versions, a veterans nursing home currently operated by the Department of Mental Health that will transfer to the Department of Veterans’ Affairs on July 1, 2025. Both versions provided funding for the military enhancement fund ($2M State recurring) and the Veteran Trust Fund ($1M State nonrecurring).
8. SC Nexus. SFC allocated $5M State recurring and $5M State nonrecurring to support the SC Nexus initiative. The House allocated $50M from the Capital Reserve Bill for this initiative. Requested by Gov. McMaster, this consortium housed at the South Carolina Department of Commerce has the goal of increasing the availability, resiliency, and security of advanced energy technology. In October 2023, SC Nexus was named one of 31 Regional Technology and Innovation Hubs by the United States Department of Commerce.
9. Criminal Justice. SFC allocated $28.5M in new State recurring and nonrecurring funds to the Department Corrections, compared to $15.3M in the House Version. The Department of Juvenile Justice (DJJ) was allocated $34.1M in new State recurring, nonrecurring and Capital Reserve Funds dollars in the SFC version; the House allocated $9.3M. Both versions allocate $6.8M in State recurring funds for DJJ to partner with Greenville County to reopen a youth detention facility that has been closed for nearly two years, resulting in a negative impact on DJJ’s operations.
10. Land Conservation. The SFC budget allocates $24.7M in new State recurring, nonrecurring, and Capital Reserve fund dollars to DNR; the House allocated $12.5M. DNR would receive nearly $3M in new State recurring funds for various operations and programs, as well as $10M State nonrecurring dollars for habitat protection and land conservation. When combined with the $9M in State recurring and nonrecurring funds at the Conservation Bank, the SFC budget allocated $19M for land conservation efforts. The House version allocated $13M State nonrecurring dollars, all of which were allocated to the Conservation Bank.
