Senate passes $8 billion budget; measure likely to go to conference
Staff reports | The state Senate relatively quickly passed a relatively non-controversial $8 billion state budget this week that added about $25 million to public K-12 education than provide in an earlier House budget. Senators had about $500 million more than the House to use for state spending due to increased revenue estimates.
In the Senate version of the budget, which likely will head to a conference committee unless the House agrees with everything, the base K-12 student cost is $2,435, or $35 per pupil more than the House budget. State law requires formula funding of $2,894 per student. That means the Senate bill provides $1.756 billion to K-12 education, which is $396 million short of full formula funding.
The Senate budget had some other differences with the House bill:
- Schools. $4.2 million more for school retirement; $2 million more for school buses; $19 million more for state charter schools to cover growth; and restoration of funding for the John de la Howe School.
- Higher education. $21 million added to fully-fund merit-based college scholarships; restores $7.5 million in lottery funding to higher education technology replacements; $16 million in new money spread among state colleges and universities for various needs.
- Retirement. The Senate version includes $150 million of funding for the state retirement system, which has been hammered with losses in recent years.
- Law enforcement, Justice. $3 million more for court IT infrastructure; $2.1 million for more SLED agents; $5.4 million to boost pay for correctional officers; and $2.1 million for Mental Health department remediation.
- Other. Libraries across the state would get $1 million in more aid; $7.5 million for beach renourishment; $17 million in restored funding to the state Conservation Bank; $17.5 million of new recurring and non-recurring dollars to the state Commerce Department to recruit, retain and diversify state industries; $5 million to the International African American Museum in Charleston; $6.7 million for REAL ID compliance to change state identification licenses.
Lawmakers send pension reform bill to governor
Staff reports | Lawmakers this week approved a plan (H. 3726) to reform the state’s pension system, which has lost about $21 billion in value in recent years due to investment strategies and more. To rectify the hemorrhage, lawmakers passed a measure and sent a bill to the governor that will:
- Increase the state’s contribution rate by 2 percent starting July 1 with 1 percent increases through 2023. Currently the state contribution is 11.56 percent to 14.24 percent per employee, based on which system an employee uses.
- Modify the amortization period for the pension fund from 30 years to 20 years to reduce unfunded liabilities.
- Cap the contribution rate for state employees to 9 percent for most state employees, who now pay 8.66 percent.
- Reduce the state’s assumed rate of return on investments from 7.5 percent to 7.25 percent to add stability to the system. The new law, once signed, also will add protections through legislative oversight related to the rate of return.
- Adopt several recommendations to improve governance at the state Public Employee Benefit Authority.
Despite passage of this bill, lawmakers aren’t done with work on the pension fund.
Last week, the Senate approved its version of a smaller pension reform bill. This is a separate bill from the bigger package mentioned above, as it deals with state pension recipients who also receive federal dollars as part of their paychecks.
The good news is that the difference between the House version and the Senate version is only about $5 million, meaning legislators will have more time and energy to focus on the roads bills.