‘Mad scramble’ for $4B in one-time funds to define South Carolina budget talks

(The Center Square) – The South Carolina Senate Finance Committee began its review of the House’s proposed $30 billion state budget Tuesday buoyed by a revised revenue report that provides lawmakers an additional $1.7 billion to allocate.

The South Carolina Board of Economic Advisors (BEA) updated its revenues collections and forecast last week and revealed the state has collected $385.8 million in “new” recurring money, up from $182.8 million it forecast in November.

The BEA also projected the state is sitting on a $646 million unspent “surplus” in the current fiscal year, meaning about $1.3 billion in “one-time” money is available for appropriation in fiscal year 2022, which begins July 1.

The additional $385.8 million in recurring revenues and $1.3 billion in nonrecurring money will provide the Senate Finance Committee with $1.7 billion more to spend than the House did when it adopted its version of the state budget, House Bill 4100, on March 23.

The House’s $30 billon budget, which includes $9.8 billion in state spending, also doesn’t include $2.1 billion in federal assistance the state will receive from the $1.9 trillion American Rescue Plan adopted by Congress, nor the $525 million South Carolina will collect from a settlement with the federal government over plutonium stored at the Savannah River Site.

Nearly $4 billion in nonrecurring money could be available for lawmakers to make one-time allocations.

The Senate Finance Committee began about two weeks of vetting of HB 4100 on Tuesday, with the chamber set to debate the spending plan April 26-29 and conferencing with the House scheduled to start May 4. The budget must be delivered to Gov. Henry McMaster by May 13.

With an array of programs and entities expected to lobby for one-time funding plugs, lawmakers are likely to return to Columbia in late May or June for supplemental budget hearings.

Senate Transportation Committee Chair Larry Grooms, R-Bonneau, told WCSC-TV he wants some of that money dedicated to the South Carolina Department of Transportation’s 10-year road plan.

A summary of South Carolina infrastructure needs posted by the White House on Monday identified 745 bridges and more than 3,780 miles of highway in “poor condition” across the state.

“Aside from roads,” Grooms said, “we have a lot of deferred maintenance needs within our colleges and universities. There are a lot of buildings that need to be raised and rebuilt.”

A key factor in his decisions will be “caution and the use of conservative principals in spending this money. We have a lot of one-time needs and that’s probably where we need to focus that money on,” Grooms said.

Nevertheless, he predicted, “there is likely going to be a mad scramble over how we are going to spend $1.7 billion. There are 170 members of the General Assembly. I am sure everyone will have their local priorities that they are going to push for.”

While the nonrecurring money plug can solve a lot of problems, recurring revenue remains down and will be a factor in how lawmakers allocate the windfall.

Although the $385.8 million in new recurring money is up from $182.8 million the BEA forecast in November, it is less than half of the more than $800 million in recurring revenue state economists predicted would be available before the COVID-19 pandemic emerged last March.

Because of that dramatic, unexpected revenue decline, lawmakers did not adopt a formal fiscal year 2021 budget but retained the previous year’s spending levels.

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