COLUMBIA — The South Carolina House unanimously approved Wednesday a $6.5 billion state spending plan that gives most employees a 2 percent raise, boosts state law enforcement, and provides health coverage to up to 80,000 additional children.
It also sends an estimated $25 million from an impending nationwide mortgage settlement to the Commerce Department to help lure companies to the state, and covers the full $180 million state match toward deepening the Charleston harbor.
The House voted 115-0 to approve the 2012-13 spending plan for state taxes. The chamber then voted 113-0 on a separate measure designating $105 million from a rainy-day fund.
The measures face another perfunctory vote in the House on Thursday before heading to the Senate.
House Ways and Means Chairman Brian White thanked members for a civil debate, which began on the floor Monday and ended at an unusually early hour Wednesday. The House last approved a budget unanimously in 2008 and 2005.
House Speaker Bobby Harrell notes the budget contains more than $625 million in tax relief; 88 percent of which is property tax relief due to previously passed laws. The other $77 million gives employers of all sizes tax relief through unemployment insurance.
The separate measure for $105 million represents money put aside in the current fiscal year in case of a downturn. The biggest chunk – $47 million – goes to pay down debt in the unemployment insurance trust fund. The state’s unemployment agency still owes the federal government $780 million of the nearly $1 billion it borrowed to keep sending checks amid climbing jobless rates.
The House voted Wednesday to transfer an additional $30 million to that debt, taking it out of money used for county road maintenance to help hold rates down for employers. The combined $77 million represents an 11 percent savings in employers’ rates, though they’ll still see some increase. Keeping the rates as is would cost $95 million, according to the Department of Employment and Workforce.
Debate on Wednesday centered on Republicans’ plans for the state’s share of the landmark $25 billion settlement with five of the nation’s biggest lenders. A judge has not yet signed the settlement. South Carolina’s share of money that banks will divvy to states is expected to be $31 million, said Mark Plowden, a spokesman for Attorney General Alan Wilson.
The House voted Wednesday to use the money to close economic development deals.
Democrats argued that money is meant to help people facing foreclosure stay in their homes, but their efforts to send part of the money to the state Housing Authority and to loan programs for developers to build apartments failed.
Democrats said the state could end up in a legal battle for not using the money as intended.
Rep. Gary Simrill, who leads the Ways and Means subcommittee on economic development, countered that giving the state’s share of punitive fines to Commerce helps bring the jobs people need to pay mortgages. Disputing the claim that homeowners would not get relief, Simrill said the settlement calls for the banks to help homeowners individually. Plus, he said, the Housing Authority already has several hundred million in federal funds for such relief programs.
“Part of the reason people are upside on mortgages is because they’ve lost jobs,” said Simrill, R-Rock Hill. “We have to be ready and armed to bring jobs to South Carolina.”
Commerce Secretary Bobby Hitt said he asked legislators to bolster his agency’s closing fund, “so that South Carolina can keep up the momentum of a very good year in recruitment in 2011.” Requests for information from companies have increased by 25 percent in the last year, he said.
The fund is among pots of money Commerce uses to pay infrastructure costs to incentivize companies looking to locate or expand in the state.
In the current fiscal year, the state’s economic development council has approved nearly $42 million in infrastructure grants. The account is down to $2.3 million, said Commerce spokeswoman Amy Love.
The Ways and Means budget plan already designated $10 million to the closing fund. Hitt had asked for $35 million, Simrill said.
Hitt “tells us he needs help. He needs to be able to bring the fish into the boat. We want jobs. We need jobs,” Simrill said.
Under the settlement, banks must reduce loans for about 1 million households nationwide that are at risk of foreclosure. The lenders will also send $2,000 each to about 750,000 Americans who were improperly foreclosed upon from 2008 through 2011. The banks will have three years to fulfill terms of the deal.
Those $1,500-$2,000 payments are expected to total about $16 million in South Carolina, distributed through a claims process, according to Wilson’s office.
Democrats said more homeowners need direct help.
“They need money to stay in their homes, so they have peace of mind to go look for a job,” said Rep. Chandra Dillard, D-Greenville.