February 13, 2009
Highlights of the fourth week (Feb. 2) and fifth week (Feb. 9) of the S.C. General Assembly session include legislative action and activities on the state budget, payday lending and tax reform. Also, an update on the federal economic stimulus bill is provided:
Economic Stimulus Bill
The U.S. Senate passed an $898 billion economic stimulus bill, despite opposition from Sens. Lindsey Graham, Jim DeMint and all but three other Republican senators. The mix of spending, tax cuts and tax rebates in the Senate’s version of the bill would be worth $10 billion to South Carolinians and their state government, most of it by the end of 2011.
The Senate’s version is similar in cost to an $819 billion stimulus measure the House passed last week—without a single Republican vote—but they have significant differences:
- The Senate package removes more than $291 million contained in the House plan for building and repairing South Carolina’s public schools, colleges and universities.
- Under the Senate bill, the state government would get $445.5 million to offset its budget deficit and education shortfalls, less than half the $905 million contained in the House legislation.
- Much of the funds decreased or eliminated from the House measure are used in the Senate package to provide $1 billion in tax relief for South Carolinians—$69 billion nationwide—hit by the alternative minimum tax.
- The Senate bill would give the state $882 million in extra Medicaid payments; $556 million in increased unemployment benefits; $482 million to build and repair roads and bridges; $335 million for low-income health insurance and almost $260 million for food stamps.
State Budget
Uncertainty over the final scope of the economic stimulus plan in Congress has delayed budget action in some states, including South Carolina, while governors and legislators wait to see how much federal relief they can expect. House leaders are taking an extra week to draft a budget after state economists cut $190 million from estimates and the U.S. Senate approved its version of the federal stimulus package.
Typically, the House Ways and Means Committee takes a week to debate the budget, but this year the committee used this week to debate provisos and will debate dollars next week. The delay allows numbers to be recalculated and gives the committee the chance to include the new federal money.
Committee members expect the state budget to be cut an additional $500 million on top of the $1 billion in cuts already made. This year’s budget could roughly equal state spending levels in 2005.
Payday Lending
The full House passed its version of a payday lending bill. The bill, which goes to the Senate, (1) raises the amount of money a consumer could borrow from $300 to $600, (2) limits the number of loans per consumer to one and (3) creates a database to track loans. Lenders must inform borrowers at the point of sale that an extended repayment plan is available if the borrower is unable to repay on time. Payday loans typically are required to be paid within two weeks. The Senate, which came within three votes last year of passing a bill to ban the industry, is not likely to approve the House proposal.
Tax Reform
The Senate Finance Committee has passed a bill that would create a committee to study the state’s tax structure and recommend changes. The bill would create the Tax Realignment Commission, or TRAC, of nonlawmakers who would make a recommendation on overhauling the state’s tax code. Lawmakers would then vote on the reforms offered, a process that the bill’s chief author, Sen. Hugh Leatherman, R-Florence, hopes will remove politics from the process. The bill is now headed to the Senate floor, where it will meet resistance.
Sources: Information has been compiled from reports in The Sun News (Myrtle Beach) and The State (Columbia).
On the Net
MyrtleBeachAreaChamber.com
SCStateHouse.net
House.gov
Senate.gov
USA.gov
SCChamber.net
USChamber.com
I-73.com
