Originally created 05/11/05

Legislators reach deal on $5.8 billion budget



COLUMBIA - Legislators delivered a final deal on the state's $5.8 billion budget early Tuesday morning that puts $11.5 million into law enforcement officer raises and pumps an extra $315 million into public schools.

State Law Enforcement Division Chief Robert Stewart kept watch over what turned into a lengthy waiting game Monday night for the pay increases and other budget needs his and other police agencies wanted.

"We needed a year like this, and you gave it to us," Mr. Stewart told the House and Senate's chief budget writers at about 1:30 a.m. when the budget conference committee wrapped up its work.

The extra money "means more people, more law enforcement personnel for all agencies," Mr. Stewart said. "I couldn't be more pleased."

The $315 million injection of cash into public schools means the state will fully meet a standard set for per-pupil spending at $2,290 for the first time since 2000.

The spending plan, which would take effect July 1, hits the three top priorities for the state in education, health care and public safety, said Senate Finance Committee Chairman Hugh Leatherman, R-Florence.

The budget also addresses a concern credit rating agencies have raised about a short-term deficit that has routinely shown up on the state's books in the past decade. The state covers that gap with revenue it gets in July - after the end of the fiscal year. Credit rating agencies have taken a dim view of the practice.

The conference committee agreed that every dollar of surplus cash left over at the end of the fiscal year would first have to be used to cover that accounting gap. House Ways and Means Committee Chairman Bobby Harrell, R-Charleston, said that would make it clear that the accounting issue is a priority for the state.

Mr. Harrell and Mr. Leatherman say they are not certain the gap will even exist this year. That may be good news for dozens of pet projects - such as $1.6 million for libraries across the state and $5 million for beach renourishment - that depend on a cash surplus as the state's current fiscal year ends June 30.

Earlier Monday, the state Board of Economic Advisors added $81 million to the revenue forecast as state income tax collections soared above earlier estimates.

That was timely news because the budget now under discussion spent $75 million more than earlier projections and the state needed to set aside an extra $6 million to cover motion picture and television production incentives that Gov. Mark Sanford signed into law Monday.

Individual income tax withholding was up 9.6 percent last month. "There has been some real hiring going on out there," said Bill Gillespie, the state's chief economist. At the same time, sales tax collections fell by 8 percent, he said.

But when everything was considered, the state's revenues were running $95.6 million ahead of forecasts, Mr. Gillespie said. The state should finish the fiscal year more than $106 million ahead of earlier forecasts.

The budget also addresses some issues that only recently cropped up. For instance, the state will put $14 million into teacher salaries in Charleston and Beaufort county schools to cover a quirk in a state formula on teacher pay.

Despite the late hour the final deal was reached, it's one of the fastest-paced budgets that's come out of the Legislature. The bill cleared the House and Senate in only a couple of days in each chamber, winning a unanimous House vote and near unanimous Senate approval.

That widespread approval could become a factor in the days ahead. Mr. Harrell and Mr. Leatherman hope to have the spending plan on Mr. Sanford's desk by this afternoon. If that happens, Mr. Sanford will have until Tuesday at midnight to use his line-item veto on the massive budget bill.

Last year,Mr. Sanford struck 106 items from the budget. The House ignored that, overriding all but one of his vetoes in two hours. Mr. Sanford was irked enough that he showed up with two pigs, Pork and Barrel, at the House's door the next day.