Senators are considering a $6 billion spending plan for the fiscal year that begins July 1.
Last week, the state's revenue forecasting board said state tax collections are recovering from the recession and that legislators could add $210 million to the proposed budget.
The Senate already had agreed to put $100 million of the extra cash into unemployment tax breaks for businesses with records of firing or laying off workers.
Senate Finance Committee Chairman Hugh Leatherman said the remaining cash should go into the state's education budget. It would raise per-student spending to $1,959 from the current level of $1,617, which is well short of the $2,720 a state school funding formula says is required.
Still, Leatherman noted, the increase would raise per-student spending to the highest level since the fiscal 2005 budget.
The extra cash would pay mostly for teacher salaries, benefits and supplies. Leatherman argued it would head off local government needs to raise taxes on businesses to cover education costs.
"This returns money to the business taxpayers," he said.
Kathy Maness, the executive director of the Palmetto State Teachers Association, said the proposal will help schools avoid the need to increase class sizes and cut teaching positions. Some districts already were cutting positions or plugging unpaid furloughs into budgets, she noted.
"That means that not as many teachers will be losing their jobs," Maness said.
The Senate, which is in its fourth week debating the state budget, will continue the work today.
Tea party activists gathered earlier in the day at a Statehouse news conference, calling on senators to find a way to return extra cash in the budget to taxpayers. The activists said they would campaign against the senators if they didn't comply.
Lexington tea party activist Talbert Black said businesses and families have been cutting back through tough times but legislators aren't.
"Yet our state government is finding ways to spend upwards of a billion dollars more this year," Black said.
"If you were running a company and they were your budget writers, what would you do?" he said.
"Fire 'em," the activists responded.
State general fund spending three years ago was set at $7 billion before the recession hit. A series of cuts cleaved $2 billion. The $1 billion Black cites includes surpluses, unused reserves and $157 million from a cigarette tax set. The spending plan calls for putting more than $435 million of that into Medicaid programs. State Sen. Tom Davis said the state is hooked on Medicaid spending.
Black said Leatherman's proposal isn't a tax break and questioned adding cash to schools.