SC Legislature passes 2013-14 budget compromise

COLUMBIA, S.C. (AP) -- The South Carolina Legislature passed a $6.7 billion spending plan for state taxes Wednesday that supporters praised as fixing roads and bridges statewide and educating more poor pre-school children.

The budget compromise squeaked by the House with a 54-52 vote, followed by a 39-5 vote in the Senate.

State law gives Gov. Nikki Haley until late Tuesday to issue her line-item vetoes. Legislators plan to return and deal with them before the fiscal year starts July 1.

Only two House Democrats voted for the plan. Democrats protested three major issues: tax credits for private school tuition, Republicans' refusal to expand Medicaid eligibility to more poor adults under the federal health care law, and no cost-of-living increase for state employees.

"We're doing a lot of bad things in this budget," said Rep. Harry Ott, D-St. Matthews, urging his colleagues to vote no.

Senate Minority Leader Nikki Setzler said he disagrees with aspects, too. But he encouraged passage, pointing to the expansion of full-day kindergarten for 4-year-olds and money to fix roads and bridges.

The plan provides $26 million for expanding the state's full-day pre-school program to 17 high-poverty school districts, increasing availability in 53 districts total. Senators hope to phase in the remaining 30 in coming years. The program created in 2006 in response to a court order has been limited to school districts that sued the state over education funding. Democrats have pushed for expansion ever since.

"It is the best way to increase opportunity, improve public education, help children learn and responsibly invest in South Carolina's economic future," said Sen. Vincent Sheheen, D-Camden.

The compromise splits the money, with 65 percent supporting full-day slots in public schools and 35 percent going toward private preschools.

It also allows people and businesses to claim tax credits for supporting private-school scholarships for children with disabilities. Donors would give to nonprofits to dole out the scholarships. The law sets an $8 million cap on credits claimed.

The idea of using the tax code to help parents send their children to private schools has died repeatedly over the last decade and divided Republicans who control both chambers.

Opponents lambasted the budget compromise for opening the door.

"Don't pretend this is not just a start," Ott said. "Don't pretend we're trying to help the handicapped children and that's all we're going to do."

But Rep. Leon Stavrinakis, D-Charleston, said he wasn't willing to potentially shut down government over $8 million in tax credits.

"There was more good in it than harm," said Stavrinakis, among the two House Democrats that voted for the budget.

Along with kindergarten for 4-year-olds, he pointed to a $77 million increase in a primary education funding source that pays salaries, an additional $24 million for textbooks and other instructional materials, and $2 million for beach re-nourishment.

The proposal also provides a first-time benefit for private school teachers, who could claim up to $275 in tax credits for supplies they buy for their classrooms. The budget usually provides direct classroom allotments for public teachers. This year, it calls for each teacher to receive $275.

"All teachers have to put money back in their classrooms," said Rep. Gary Simrill, R-Rock Hill.

Most legislators praised the $141 million designated for infrastructure as a great start toward addressing the state highway system's multi-billion-dollar backlog.

The plan sends $50 million to the State Infrastructure Bank to borrow for major projects. Up to $50 million from this year's surplus would be used to repair the state's crumbling bridges, and $41 million from the state sales tax on vehicles would repair secondary roads. Borrowing and federal highway matches could push the total to $800 million.

If there's enough surplus to provide the full $50 million, about 50 bridges statewide would be replaced or rehabilitated. Of the state's nearly 8,400 bridges, seven are closed and 420 have weight restrictions for crossing.

The compromise included the Senate plan for new school buses. That $23.5 million would allow the state Education Department to get several hundred pre-1998 school buses off the road. But it's uncertain whether the agency will receive all of that, since about half of it comes from this year's estimated surplus and unclaimed lottery prizes.

Legislators' $6.7 billion spending plan includes $106 million from this year's rainy day fund. That was designated in a separate bill also approved by both chambers.

The largest chunk pays off a $20 million loan to the Department of Revenue to cover contracts Haley negotiated following last fall's cyber-theft of millions of taxpayers' personal data. The bill also includes $10 million to extend credit monitoring for affected taxpayers.

The total spending plan for 2013-14 is $22.8 billion, when adding in $7.6 billion in federal money and $8.4 billion in "other funds" that includes grants and agency fees and fines.