Senators Ignore Constitution in Hiking Lawmaker Pay

May 23, 2014

Investigative Reports

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South Carolina Senate

NO MONEY FOR A PAY HIKE? NO PROBLEM.

The S.C. Constitution requires that “annual expenditures of state government may not exceed annual state revenue.”

Yet the state Senate last week skipped over Article 10, Section 7 (a) of the constitution when it approved,  by a 25-20 vote, to allow all 170 lawmakers to claim an additional $12,000 yearly in “in-district” payments, which are considered taxable income.

The 100 percent increase in those payments, if it stands when the final budget is enacted, would cost S.C. taxpayers more than $2 million annually if all 170 members accepted it.

But The Nerve’s review of the Senate’s version of the fiscal 2015 state budget found no line item for the pay raise.

In fact, the Senate’s budget version specifically noted there was no change between its spending plan and the House version of the budget, though it added the cryptic message, “Budget in total House/Senate budgets with pay raise.”

In a written response Thursday, Budget and Control Board spokeswoman Rebecca Griggs confirmed The Nerve’s review.

“No additional funding was provided to either body for this purpose; therefore, you will not find a line item in either the Summary Control Document (a budget document produced by the Office of State Budget) or the budget,” she said.

Griggs did not respond by publication of this story to follow-up questions about whether the Senate’s action last week violated the state constitution.

During the May 14 Senate floor debate, Sen. Tom Davis, R-Beaufort, pointed out that Article 3, Section 19 of the state Constitution provides, in part, that “no General Assembly shall have the power to increase the per diem of its own members.” In a statement printed in that day’s Senate Journal explaining why he voted against the proposed increase, Davis said he interpreted that section of the constitution to mean that any increase in legislative compensation couldn’t take effect until after lawmakers who approved the increase “stood for re-election (and a new General Assembly has been constituted).”

The Nerve revealed Monday that a little-known salary study authorized by the General Assembly two years ago recommended that lawmakers’ base salary of $10,400 be increased by $10,000 to $20,000, an increase of 96 percent to 192 percent; and that the additional pay for certain legislative leaders, including House Speaker Bobby Harrell, be raised as well.

A conference committee of three senators and three House members typically works out differences between the chambers’ versions of the budget for the upcoming fiscal year, which starts July 1. The Senate last week passed a total budget, which includes state, federal and “other” funds, of $23.61 billion; the House version, passed in March, is $23.59 billion, according to the General Assembly’s website.

Both versions don’t include a projected $1.5 billion in federal food-stamp assistance payments that are listed in this fiscal year’s budget for the S.C. Department of Social Services as having been transferred to an “unbudgeted account,” according to Office of State Budget records.

The state Board of Economic Advisors on Wednesday revised its revenue forecast for next fiscal year, projecting an additional $86 million in revenues, according to media reports. Whether lawmakers will tap what Gov. Nikki Haley has dubbed  the “money tree” to cover the proposed pay increase for lawmakers is unknown.

One of the six lawmakers who likely will again be on the budget conference committee is Senate Finance Committee Chairman Hugh Leatherman, R-Florence. The Nerve reported earlier this month that Leatherman was behind the push to increase the in-district payments for lawmakers.

Most lawmakers currently receive an annual base salary of $10,400 and $12,000 yearly in in-district payments, giving them a combined income of $22,400. If lawmakers are allowed to take an additional $12,000 in in-district payments, their combined annual income would jump to $34,400, an increase of about 54 percent.

Meanwhile, lawmakers are proposing a one-time $300 bonus for state employees. But it would be funded only if the state has $10 million in “excess revenue” available by October, when the bonuses would be paid, under a state budget proviso (Proviso 118.16).

The state budget proviso (Proviso 91.29) that authorizes the in-district payment increase for lawmakers – which is good for only one year – directs that the additional $1,000 per month be used to  “defray expenses related to his in-district legislative duties including, but not limited to, an in-district office, travel, or telephone.”

But state law (Act 283 of 1975, better known as the Home Rule Act) already requires counties to provide offices, equipment and personnel for their respective legislative delegations. The Nerve last week reportedthat at least six counties that don’t provide office space make substitute payments – which can total in the thousands – to lawmakers.

Although the Senate approved the in-district payment hike for next fiscal year, its version of the fiscal 2015 state budget lists the same total amounts as the House version for both chambers: $21.67 million for the 124-member House and $13.37 million for the 46-member Senate.

What the proposed budget versions don’t include are the millions in reserves that both chambers likely will have at the start of the fiscal year on July 1. The House, for example, carried over nearly $16.2 million into this fiscal year, which represented 76 percent of its entire ratified budget; while the Senate carried over about $6.5 million, which represented more than 51 percent of its ratified budget.

In comparison, the House had more general-fund reserves at the start of this fiscal year than either the departments of Corrections ($10 million general-fund reserve), or Health and Environmental Control ($7.4 million general-fund reserve), according to state Comptroller General Richard Eckstrom’s year-end report. The Senate had more general-fund reserves than either the departments of Revenue ($3.9 million) or Public Safety ($2.4 million).

As of Monday, the House had more than $21 million in cash on hand, while the Senate had more than $8.6 million, according to comptroller general records provided to The Nerve.

The bottom line is that both the House and Senate have plenty of money in the bank already to more than cover the proposed pay increase for lawmakers, even though it was not included in the Senate budget version approved last week.

That could partly explain why it’s easy for legislators to ignore the S.C. Constitution.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.