S.C. Would Spend Millions on Nonprofits in 2013-14 State Budget

May 17, 2013

Investigative Reports

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SC Senate ChamberThe S.C. Senate this week refused to reverse its long-held tradition of funneling millions of tax dollars to nonprofit groups, despite an attempt by one senator to end the practice.

During floor debate on the state budget for next fiscal year, which starts July 1, Sen. Shane Massey, R-Edgefield, unsuccessfully tried to delete a $250,000 earmark to the Gateway House in Greenville and $200,000 for the Southeastern Wildlife Exposition in Charleston.

Gateway House provides mental health services through the S.C. Department of Mental Health. The Southeastern Wildlife Expo is a festival usually held in February each year; its proposed state funding next year would go through the S.C. Department of Natural Resources.

They are two of more than 20 nonprofits connected to social service programs, education initiatives or economic development, and which are authorized to collectively spend at least $26.3 million under the Senate Finance Committee’s version of the 2013-14 budget, The Nerve found in a review of budget documents.

Lawmakers would allocate the single-highest amount – $9.5 million – to the nonprofit Greenwood Genetic Center in Greenwood County. The nearly 40-year-old facility conducts research and testing on birth defects and developmental disabilities.

The Nerve reported last month on a move by the facility to team up with Clemson University on a $21.57 million joint project that would be funded in part with $5 million in state bonds and $1.5 million in cash from Greenwood County.

The Nerve also reported this week that seven regional economic-development groups, including two with ties to state lawmakers, and three counties would be allocated a total of $5 million in state tax dollars in fiscal 2014 through the state Department of Commerce, under the Senate Finance budget version.

Other nonprofits slated to receive an earmark from taxpayers include:

  • $1.75 million through the Department of Education (DOE) to STEM Centers S.C., which focuses on economic development through improved science, technology, engineering and math education;
  • $1 million through DOE for Teach For America, which has a mission to use college graduates and professionals to improve education achievement in low-income communities;
  • $750,000 through the S.C. Department of Alcohol and Other Drug Abuse Services to Keystone Substance Abuse Services in York County, which is the county’s largest provider of treatment and prevention services; and
  • $500,000 through the S.C. Commission on Prosecution Coordination to the Centers for Fathers and Families, which supports six fatherhood programs in 11 communities in South Carolina.

“What I really don’t like is directing money to a specific entity as an earmark in the budget,” Massey toldThe Nerve Wednesday evening, noting he does not dispute the quality of programs that nonprofit organizations provide South Carolinians.

“I don’t like the process,” he said. “A House member or a senator has a relationship with someone, and that’s how they (nonprofits) get money.”

Massey said the proposed $250,000 appropriation to the Gateway House, which provides rehabilitation services to men and women in Greenville County suffering from mental illness, would go into the organization’s general operating account, rather than a specific program.

In a 20-19 vote Tuesday, the Senate tabled – effectively killing – Massey’s amendment to delete that earmark from the budget.

In Tuesday’s Senate floor debate, Massey unloaded on the Southeastern Wildlife Exposition (SEWE) in an effort to get its $200,000-earmark removed from the budget.

Armed with some of the organizations’ recent tax information, Massey contended that the $200,000 would pay the salary of Jimmy Huggins, SEWE’s chief executive officer.

“We are giving them money to pay the CEO’s salary,” Massey said.

In 2011, SEWE paid its CEO $167,174, which was an increase from $147,652 in 2010, Massey said, adding that if the trend continued in 2012, his salary would have been $200,000.

“I don’t have a beef with the festival,” Massey said. “I do have a beef with a private, nonprofit getting $200,000, and turning around and paying the CEO.”

Sen. Paul Campbell, R-Berkeley and a SEWE board member, defended the festival . He said the state receives between $4 million and $6 million in revenue alone from the festival, adding the $200,000 pays for marketing and publicity for the festival.

“This festival is break even at best,” Campbell said in response to Massey. “The state is the biggest beneficiary of this festival by a large part, by a large, large part.”

A move to table Massey’s amendment to delete the $200,000 earmark failed on a first vote.

When additional debate arose, Sen. Brad Hutto, D-Orangeburg, contended that state spending $200,000 to get about $5 million in return is a good investment.

“We’re going to cut off our nose to spite our face,” he said.

Hutto then launched a threat to cut all funding of nonprofits in the budget.

“If we’re going to go down this road of taking nonprofits out of this budget, then let’s take them all out,” he argued.

Hutto said if Massey’s amendment passed, he would prepare amendments to eliminate all money earmarked for nonprofits in the fiscal 2014 budget.

In a final 22-21 vote, the Senate rejected Massey’s amendment.

The Senate is scheduled Tuesday to resume debate on the budget.

Olson can be reached at (803) 254-4411 or curt@thenerve.org. Follow him on Twitter @thenerve_curt and @olson_curt. Follow The Nerve on Facebook and on Twitter @thenervesc.