COLUMBIA — As state senators prepare to tweak the House spending plan, a powerful lawmaker said he wants to keep in $180 million for deepening the Charleston Harbor even as some Democrats push to raise the pay of state workers and provide more money for local governments.
Board of Economic Advisors’ chief economist Frank Rainwater and state budget office director Les Boles gave presentations Tuesday to the Senate Finance Committee on state revenues and the House budget plan for the fiscal year that starts July 1.
Committee Chairman Hugh Leatherman, R-Florence, said the ports drive the state’s economy, and deepening the harbor is “very much a priority.”
The designation represents the full state match of the expected $300 million project. Charleston is in a race with competing ports to accommodate super-size ships expected on the East Coast after the Panama Canal widens in 2014.
Those ships are now limited to a two-hour tidal window in Charleston’s port. The House plan would put the money in a newly created trust fund.
Legislators hope it pushes the federal government to move up the 2024 expected completion date.
Leatherman said the designation also allows the State Ports Authority’s CEO to tell international businesses making long-term shipping decisions that South Carolina is serious.
Otherwise, Leatherman said, he worries the state will lose business to Savannah, Ga., where a deepening is scheduled to be completed by 2016.
Sen. Darrell Jackson, D-Columbia, said he will fight to give state workers a 4 percent pay increase – up from the 2 percent approved in the House plan for most employees.
He thanked the House for providing the 2 percent, after Gov. Nikki Haley’s budget proposal called for a fourth year of no pay raises for state employees.
“But quite honestly and frankly, I don’t think that’s enough,” Jackson said.
One possible funding source could be extra money the House sends to a state savings account. State law requires legislators to send $42 million to the reserve fund, increasing the balance to $225 million. But both Haley’s and the House plan would provide nearly $60 million more than required. The House’s GOP majority fought back attempts by House Democrats to use the money elsewhere, saying the economy remains uncertain.
Leatherman said he may consider spending it.
“We still have a lot of needs,” he said. “I plan to look at that.”
Other senators said the state needs to send local governments the full amount that state law requires.
State law mandates that cities and counties receive 4.5 percent of the previous year’s general revenue. Complying would cost an additional $71 million, for a total of $253 million. But the House spending plan keeps funding at $183 million, as in the current budget.
The “local government fund” has been cut from $280 million in 2008, as legislators repeatedly passed measures giving them flexibility amid plummeting revenues. The money is distributed based on population, with 83 percent going to counties and 17 percent to cities.
Some Democratic senators said that with hundreds of millions of dollars in surplus, it’s time to pay local governments what they’re promised.
“I hope we make it a priority to close that gap,” said Sen. Phil Leventis, D-Sumter. “We have constrained local governments terribly. We’ve cut substantially what they’ve counted on and hamstrung them terribly with tax policies.”
The House unanimously passed its $6.5 billion spending plan for state taxes March 15. Senate subcommittees have been discussing different sections of their plan for 2012-13. The full committee will debate its version of the budget in two weeks. Debate on the Senate floor is expected the week of May 15.
The legislative session is scheduled to end June 7.