Senators Poised to Raid $112 Million ‘Rainy-Day’ Fund

May 29, 2013

Investigative Reports

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Dollar SymbolThe S.C. Senate’s debate on the 2013-14 budget dragged into a third week Tuesday, and it could continue another day or so as the chamber must also approve the $112.6 million Capital Reserve Fund, which lawmakers have drained in recent years for typically non-emergency purposes.

The Senate on Tuesday did not take up debate on proposed Capital Reserve Fund (CRF) allocations for next fiscal year, which starts July 1. How the fund will be divvied up is contained in separate legislation (H. 3711) from the general-appropriations bill (H. 3710), which received the third and final reading Tuesday evening. The CRF is on the Senate calendar for Wednesday.

The CRF was established to be an annual rainy-day fund, with 2 percent of the previous fiscal year’s general–fund revenues set aside for it. But lawmakers have raided it in recent years for various projects that critics  contended often were not critical needs in the state.

And this year likely will be a repeat of that practice.

Proposed allocations by the Senate Finance Committee for  the CRF for next fiscal year, which starts July 1, differ from the full House version passed in March – a primary difference being the appropriation to the S.C. Department of Agriculture for the purchase of land to expand the State Farmers Market on Charleston Highway near Interstate 26 in Lexington County.

The Nerve exposed the controversy with the farmers market one year ago, revealing a proposal by Agriculture Commissioner Hugh Weathers to spend $16.3 million to expand the market. The Nerve later learned the owner of privately owned market land that would be purchased under the plan was S.C. Ports Authority Chairman Bill Stern, which led several lawmakers to call for a second audit of the Department of Agriculture in connection with the move of the farmers market from its former Richland County site to its present Lexington County location.

The audit by the Legislative Audit Council – the General Assembly’s investigative arm – has not been completed.

The debate extended into this year with Weathers seeking $14.4 million for the expansion project at the Lexington County site. The Senate Finance Committee comes closer to that figure than the House, proposing to allocate nearly $9.9 million from the Capital Reserve Fund next fiscal year compared to $3 million under the House version.

The Nerve first reported  the unique arrangement under the House version, which calls for S.C. Attorney General Alan Wilson to “negotiate for the purchase of property at the State Farmers Market on behalf of the State Department of Agriculture subject to approval of the (S.C.) Budget and Control Board.”

Besides proposed funding for the State Farmers Market, other differences between the Senate Finance Committee and House versions of the Capital Reserve Fund for next fiscal year include, with the state agencies that would receive the appropriations listed in parentheses:

  • Deal-closing fund (S.C. Department of Commerce): $3.3 million, Senate Finance; $5.3 million, House. When other revenue streams are included, however, the Senate Finance version proposes a total of $25 million for the fund  compared to $21.3 million under the House version;
  • Cyber-security improvements and consumer protection (S.C. Department of Revenue):  $10 million, Senate Finance; $25 million, House;
  • Electrical improvements at Lake Greenwood Campground, sewer repairs at Santee and Table Rock state parks, bridge replacement at Kings Mountain, and asbestos and mold removal in some agency buildings  (S.C. Department of Parks, Recreation and Tourism): $1.8 million total, Senate Finance; $0, House;
  • Businessincubator program (Department of Commerce):  $0, Senate Finance; $1 million, House. The Nerve reported about the program last month; When other revenues are included,  the House has proposed a total of $6 million for the project; Senate Finance, $4.17 million; and
  • State House dehumidification and heating improvements (S.C. Budget and Control Board): $60,000, Senate Finance; $0, House.

With five standard meeting days left in the regular legislative session, it’s uncertain how soon the Senate and House will meet in a conference committee on the fiscal 2014 state spending plan. Each day the Senate takes on the budget is one less day to debate other issues, such as the ethics-reform bill (H. 3945) and creation of a Department of Administration (S. 22), which was debated Tuesday evening.

Senators early Tuesday had a lengthy discussion on procedure before they started casting roll-call votes on 118 separate sections of the budget, as required by state law.

Sen. Brad Hutto, D-Orangeburg, inquired about how to seek amendments on third reading of the budget. Sens. Gerald Malloy, D-Darlington, and Larry Martin, R-Pickens and the former Senate Rules Committee chairman, debated how to proceed.

Malloy wanted to bring up amendments or ask questions about a section of the budget before the roll-call vote on that section. Martin disagreed.

“You need to put it (amendments) up now.” Martin said. “The vote’s about to take place.”

“I don’t take your advice very well,” Malloy responded.

“I’m not going to argue with you about the rules,” Martin responded. “You’re not going to take it anyway.”

“We’re back at the same place as last year,” said Sen. John Scott, D-Richland, noting the voting shortcut the Senate used last year to save time.

The Senate took most of an hour for discussion on procedure before Lt. Gov. Glenn McConnell, who presides over the Senate as the Senate president, ruled there would be a section-by-section roll-call-vote, and any amendment could be brought up in advance of the vote on that section.

The Senate then recognized Jadeveon Clowney, the University of South Carolina’s star defensive end, for being the 2012 AT&T National Player of the Year and Defensive Player of the Year in the Southeastern Conference.

That led to the Senate to recess for lunch before casting votes on separate sections of 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.