March 31, 2009
Highlights of the 10th week (March 15) and 11th week (March 22) of the S.C. General Assembly session include legislative action and activities on the state budget, tourism development fee, cigarette tax and payday lending. Also, an update on the federal economic stimulus bill is provided:
Economic Stimulus Bill
South Carolina and its residents are slated to get $8 billion in federal stimulus benefits. The funds are intended to save jobs and curb cuts to services over the next two years in hopes that the economy will recover sufficiently to replenish state budgets.
Of the $8 billion, Gov. Mark Sanford says he won’t seek a $700 million portion of the cash unless he can use it to pay down debt, mostly for education. The White House has twice rejected his request, stating the money had to be spent to simulate the economy, educate children and spare jobs.
The S.C. General Assembly is expected this week to formally request the money and proceed with a plan to go around the governor to accept the money. But state lawmakers fear that this could subject the state to legal challenge and tie up the aid in court. South Carolina, either through Sanford or the General Assembly, has until Friday to request the money.
The state has already received tens of millions of dollars in stimulus payments for public housing, law enforcement, jobless benefits and state grants. Sanford has ordered state agencies and local government officials to detail how they use stimulus money. An executive order tells officials to provide the information and cites laws requiring them to comply. If they don’t, Sanford can remove them from office. The South Carolina Stimulus Oversight, Accountability and Coordination Task Force will have at least 17 members including the state’s comptroller general and treasurer and several members of Sanford’s cabinet.
State Budget (Fiscal Year 2009-2010)
State budget writers are drafting two versions of their spending plan to show how South Carolina will be affected by rejecting federal stimulus money. The Senate Finance Committee will include plans to use $700 million in stimulus funds over the next two years and another to follow Sanford’s request not to use the federal money.
The House’s $6.6 billion budget includes $1 billion in stimulus cash. Without stimulus money, lawmakers claim the likely result would be mass K-12 teacher layoffs, state prison closings and college tuition increases.
Local Option Tourism Development Fee
With no destination-specific advertising funds designated in the upcoming state budget, Horry County delegation members have introduced legislation that allows Horry County’s localities to impose a new 1 percent sales tax primarily for tourism promotion. The sales tax would be assessed on all retail except groceries.
The current version requires a majority vote of two-thirds of a city council, does not allow the county government to adopt the tax and requires that 20 percent of the money be used for property tax relief after three years. If a council cannot get the two-thirds majority, it can put the issue up for a referendum. Though the bill offers the possibility of a new tax for some city residents, the tradeoff is the possibility of a significant reduction in property taxes. The bill has passed in the Senate, and the companion bill has moved to the House floor.
In recent years, businesses throughout the Grand Strand have cooperatively invested their funds into the state’s 2-for-1 grant program for tourism promotion. For every $1 spent advertising our destination, $72 is generated in return. The Myrtle Beach area has made great strides in building awareness and gaining market share through tourism promotion.
Cigarette Tax
A House panel has approved raising the cigarette tax to 57 cents per pack to expand health insurance coverage for small businesses, the poor and those who are expensive to insure. Kaiser Family Foundation estimates that nearly 700,000 South Carolinians lacked health insurance in 2007.
The plan would use roughly $139 million of $147 million total annually in cigarette tax revenue, with $5 million for smoking cessation programs and $2.5 million for marketing state agricultural products. The program would provide tax credits to employers or employees for a portion of their health insurance premiums, up to $3,000 annually. If approved, the money would be matched with federal health care money to create a state insurance program.
The bill heads to the full House for debate. Last year, the body approved a 50 cent-a-pack increase, which the Senate also approved but the governor vetoed.
Payday Lending
The Senate Banking and Insurance Committee has made crucial changes to a payday lending bill. The committee has eliminated loan limits of 25 percent of a borrower’s gross pay, raised the amount a consumer can get in one loan to $500 and cut the period between loans to two days rather than seven. Unless opposing senators can gain support on the floor, the Senate will go into negotiations with the House later this session.
For legislative tracking on specific bills, visit the chamber’s Government Relations page.
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
