Legislative Update   –  March 22, 2012

Historic Change in State Government:

Lt. Gov. Ken Ard resigned from his office due to ethics charges, Sen. Glenn McConnell is then forced to resign the President Pro Tempore position as well as his Senate Seat, Sen. McConnell is then Sworn in as the new Lt. Governor while Sen. John Courson is elected the new President pro tempore of the Senate. 

For the first time in state history, the President Pro Tempore of the Senate was forced to resign his position. The President pro tempore of the Senate is the most powerful position in the Senate Chamber. Sen. Glenn McConnell had to give up his seat representing Senate District 41 and his post as Senate Pro Tempore to become the State's Lieutenant Governor. Which is mostly a ceremonial position that yields very little power.

Former Lt. Gov. Ken Ard, who was indicted on seven ethics charges and sentenced to five years probation, resigned earlier this month. The State's Constitution spells out the order of succession in the event the Lt. Governor's office becomes vacant. The next in line is the President Pro Tempore of the Senate. Sen. Glenn McConnell could have chosen to resign his position in the Senate so that he could keep his senate seat but chose to follow the rule of law and was sworn in as the Lt. Governor. He also announced that he will not enter the race to get his Senate seat back. Which means Sen. John Courson from Columbia, who was elected to be the new President pro tempore last week, will more than likely keep his new position as the Senator with the most power in the Senate. 

HOUSE PASSES 6 BILLION DOLLAR BUDGET:

Tax relief, Charleston port deepening trust fund, fully-funding reserve accounts, paying down state debt and funding education in the classroom, increasing Teacher and State Employee pay by 2%. These are just some of the highlights of the budget that was unanimously passed by the House 115 – 0. 

Coming in well under proposed spending caps, the House's budget delivers over $600 million in direct tax relief.  Of that, $549 million goes to a property tax relief fund with $77 million in State Unemployment Tax(SUTA) relief for every single South Carolina employer. The tax relief contained in this year's budget adds to the more than $20 billion in tax cuts Republicans have passed since gaining a majority in the House.

This fiscally conservative budget is all about making South Carolina more competitive, promoting accountable government, limiting growth by focusing on core functions and responsibly planning for our state's economic future. 

Nearly $400 million is placed in the financial reserve accounts that the state draws upon to cope with budget shortfalls, the General Reserve Fund and the Capital Reserve Fund.

Dredging Charleston Harbor Included in the Budget: The Harbor Deepening Reserve Fund is created within the State Ports Authority and $180 million is provided to pay the state's full share of deepening the Charleston Harbor so that South Carolina can remain competitive in maritime shipping with a port capable of accommodating the larger vessels that will pass through the newly-expanded Panama Canal. 

Education Support in the Budget: An additional $152 million is included for K-12 education, allowing for an increase in the Base Student Cost to $2,012 per student. Additional funds are to be used to provide a 2% pay raise for teachers. School districts that demonstrate they are unable to fund these pay increases may apply for a waiver. An additional $5 million is provided for the state's Public Charter School District. 

Law Enforcement and the Courts:  After several years of cuts which have impacted services at SLED and the State Department of Public Safety, the budget provides an additional $21 million collectively to these agencies.  Funding is also provided for 3 new family court judges and 3 new circuit judges to help with case backlogs in both family court and criminal court. 

7 POINT COMPREHENSIVE TAX REFORM PLAN:

House Republicans wants to change how everybody in South Carolina pays taxes. After eight months of study, Rep. Tommy Stringer and the Caucus Tax Reform Study Committee filed a package of seven bills.

This is tax reform that gets to the heart of the Republican Platform. Lower taxes and a more efficient government are THE core tenants of our beliefs and years of tinkering around the edges have created a state tax code that is dense, unwieldy, and unfair to many taxpayers. We aim to take a major first step toward reform with this legislation. 

The package consists of seven major reforms: 

TAX EXEMPTIONS FOR BUSINESS PERSONAL PROPERTY AND MANUFACTURING PROPERTY (H-4993) This bill proposes to cut the business property tax rate from 10.5% to 6%. The legislation provides for these exemptions to be phased in over four years. 

INCOME TAX REDUCTION/ SALES TAX REVISION (H-4994) This bill revises individual income tax provisions by eliminating the 4%, 5%, and 6% income brackets and providing instead for those incomes to be taxed at 3%. The legislation revises income tax rates for pass-through trade and business income by reducing the tax rate from 5% to 3%. The legislation eliminates numerous sales tax exemptions and provides that the additional revenue generated must be used to reduce the overall sales tax rate. The legislation reestablishes the Joint Committee on Taxation and charges the committee with conducting a cost benefit review of sales tax exemptions every 5 years, if not more frequently. 

SALES TAX REVISION (H-4995) This bill eliminates numerous sales tax exemptions and provides that the additional revenue generated must be used to reduce the overall sales tax rate. The legislation reestablishes the Joint Committee on Taxation and charges the committee with conducting a cost benefit review of sales tax exemptions every five years, if not more frequently. 

CORPORATE INCOME TAX REDUCTION (H-4996)  This bill revises income tax rates for pass-through trade and business income by reducing the tax rate from 5% to 3%. 

INDIVIDUAL INCOME TAX REDUCTION (H-4997) This bill revises individual income tax provisions by eliminating the 4%, 5%, and 6% income brackets and providing instead for those incomes to be taxed at 3%. 

COMMERCIAL PROPERTY TAX REDUCTION (H-4998) This bill revises property tax provisions by reducing the assessment ratio on commercial and other applicable real property from 6% to 5% of value. 

ELIMINATION OF THE CORPORATE INCOME TAX (H-4999)  This bill provides for the elimination of the corporate income tax over a four year period. 

Keep in mind that these are proposed bills that are still being debated in committee and have not reached the House floor yet. I am sure there will be a lot of debate and change in these bills before they become law. 

GOVERNOR HALEY'S DISAGREEMENT WITH THE HOUSE:

Governor Haley has been very critical of the House and the way we have handled the budget and tax reform lately. She started a tour last week where she is promoting her idea for a one-year only tax cut benefiting major corporations. The House budget plan cuts taxes for every single SC employer, we are very certain this will stimulate hiring. 

The Governor is also attacking the House Republican's 7 point comprehensive tax reform plan. She called it "disingenuous" even though she and her staff worked with our tax reform committee over the past eight months and the legislation included everything she asked for and much more. 

Rubio to Headline S.C. GOP Dinner:

"This year's Silver Elephant dinner will honor our party's proud heritage, as the first Silver Elephant dinners attracted Republicans from all walks of life. Senator Rubio's personal story, combined with his outstanding leadership in Washington, make him a perfect choice for the occasion. Our nation needs his kind of leadership," said Chad Connelly, state Republican Party chairman. 

Registered Voters By Party: 

Bill(H-3110) received a favorable review by a House panel and was sent to the full Judiciary Committee for consideration. The bill will require S.C. voters to register by political party before casting a ballot in a primary election. Currently, any registered voter can cast a ballot in one primary per election cycle without having to self-identify with a political party. 28 other states already require some level of party registration which allows political parties to control their own destinies. 

TEXTING WHILE DRIVING:

The House approved the bill (H-4451) that bans texting while driving. The bill calls for violators to receive stiff fines, particularly if they are in an accident with injuries while texting. SC is one of only 8 states with no statewide texting while driving ban. 

North Augusta Students Meet Governor Haley:

Here is a video of Hammond Hills Elementary students who had the opportunity to meet Governor Haley. They also had the opportunity to tour the State House as well. 

Video Of Hammond Hills Students

Please be sure to stay up to date with all that is going on in Columbia. If you have any questions, comments or concerns, I am always available.