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Senator Proposes Huge Increase in Court Funding

South Carolina’s court system likely would receive at least $70 million more annually in state tax dollars – nearly tripling its current general fund appropriation – if a proposal by a lawyer-lawmaker becomes law.

State Sen. Gerald Malloy, D-Darlington and a member of the Senate Judiciary Committee, last week filed two bills (S.423, 425) that would require the S.C. General Assembly to annually fund the state Judicial Department at 2 percent of the state’s general fund revenues in the previous fiscal year.

The state ended fiscal 2009-10 on June 30 with $5.4 billion in general fund appropriations, according to a year-end report by S.C. Comptroller General Richard Eckstrom.

At that rate, the court system would receive $108 million in general funds annually, assuming Malloy’s proposal became law this year and the state’s year-end general fund total didn’t drop.

The Judicial Department’s general fund budget for the current fiscal year is about $37.5 million. Under Malloy’s proposal, the department would receive a roughly 190 percent increase in general funds, based on last year’s total general fund appropriations for the state.

When federal and “other” funds – mainly court filing fees and a surcharge on fines – are included, the Judicial Department’s total revenues for this fiscal year are projected to be $72.3 million, according to a department budget plan that is included in former Gov. Mark Sanford’s 2011-12 proposed executive budget.

The Legislature for this fiscal year appropriated $67 million in total funds for the court system.

In recent years, the department has relied heavily on increases in court fees, which are paid by people using the court system.

One of Malloy’s bills is a joint resolution that calls for a constitutional amendment setting the 2 percent funding formula.

An amendment would have more force than a statute because changing an amendment would require a two-thirds vote of each chamber of the General Assembly, and a majority of votes in a statewide election.

Contacted last week by The Nerve, Malloy acknowledged that the 2 percent rate likely would have to be lowered for his proposal to pass the Legislature this year, describing it as a “good way to start the debate.”

“I want to make sure we take care of one of the co-equal branches of government instead of them coming to us every year and trying to find creative ways to fund their budget,” Malloy said. “My submitting these bills is sort of a starting point on (discussing) the independence of the judiciary.”

Malloy said he didn’t consult with S.C. Supreme Court Chief Justice Jean Toal, who heads the Judicial Department, before drafting his bills.

Contacted last week by The Nerve, Toal said she was unaware of Malloy’s proposal, and that she couldn’t comment on specifics until she had the chance to review it.

“This has not come out to (the House) Ways and Means (Committee) and I’ve been there twice,” said Toal, a former longtime state legislator.

A House bill (H. 3161) last year that was supported by Toal would have increased court filing fees to, according to the bill’s sponsor, Rep. Jim Harrison, R-Richland, cover large cuts in recent years to the department’s general fund budget. But the bill died after Sanford vetoed it, and the House sustained the veto.

Contacted last week about Malloy’s bills, Harrison said, “That’s a lot of money. … I don’t think a flat fee is the best way to go.”

Harrison, chairman of the House Judiciary Committee, said that after this fiscal year’s budget bill passed, he heard about a proposal to set future Judicial Department budgets at 1 percent of state general fund revenues.

He said he had reservations then about the proposal, noting, “If we come out of this economic downturn, 1 percent could generate significantly more than the court would need.”

Based on last fiscal year’s general fund appropriations of $5.4 billion, the court system would receive $54 million in general funds at a 1 percent rate, compared to $108 million under Malloy’s proposal.

Malloy told The Nerve that he would be willing to see a rate between 1 and 2 percent, though he added, “We would need to hear from the experts to hear exactly what is needed.”

The Judicial Department’s general fund budget during the recession was slashed from $37 million in fiscal 2008 to about $23 million at the end of last fiscal year, a drop of about 38 percent. But in the wake of the veto of Harrison’s bill, lawmakers restored the general fund budget for this fiscal year to $37 million.

Harrison’s bill would have increased court filing fees 33 percent to 200 percent, raising an additional $24 million for the court system, according to a state fiscal impact statement.

But even without Harrison’s bill, other fund revenue jumped from about $15.7 million in fiscal 2008 to approximately $25.6 million last fiscal year, according to the executive budget prepared by Sanford, an increase of 63 percent.

The department’s total revenues, which include federal funds, were about $60 million in fiscal years 2008 and 2009, but dropped to $57.4 million last fiscal year.

The court system’s projected $72.3 million in total revenues for this fiscal year would be a 26 percent increase over last fiscal year. That includes a projected approximate $25 million in other funds and $9.7 million in federal funds, according to the executive budget prepared by Sanford.

Harrison told The Nerve that he has no intention of re-introducing his fee-hike bill this year. He said the proposed hikes, which would have been temporary if approved, were a “last resort” to deal with general fund budget cuts.

Given the still-shaky economy and the Legislature’s move last year to restore the court system’s general fund budget to pre-recession levels, Harrison said, “I don’t think the court needs more (general fund) money right now, but I think they need to be getting pretty close to what they’re getting.”

Toal told The Nerve that she has asked House budget writers not to replace $5.1 million in one-time enhanced state tax collection revenue and federal stimulus money in her budget for next fiscal year, which starts July 1.

She said she originally asked for that amount to be made a permanent part of her 2011-12 budget but later decided against it given the state’s budget woes. Her 2011-12 budget plan submitted to Sanford last year called for a total budget of about $62.5 million.

Lawmakers this session are grappling with an unprecedented budget hole that is projected to be more than $800 million, mainly because of a loss of federal stimulus dollars.

House budget writers have asked state agencies, including the Judicial Department, to cut their general fund budgets next fiscal year by 20 percent.

Toal in documents presented last week to the House Ways and Means Law Enforcement and Criminal Justice Budget Subcommittee said that could result, among other things, in her department running a deficit.

As for seeking any increase in court fees this year, Toal told The Nerve, “I will not be recommending any fee enhancements this year,” though she added that “it might be something I will look at down the road.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org

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