South Carolina House and Senate negotiators remained deadlocked over tax breaks and earmarks this week, allowing the new fiscal year to begin on July 1 without a state budget.
Until they can resolve their differences, agencies will continue to operate at last year’s funding levels. And state employees will continue to wait for the raises they were promised when each chamber passed its version of the spending plan earlier this year.
The key sticking point? Some $350 million in House-backed earmarks, or lawmaker-sponsored local spending projects. Senators, meanwhile, want to put about two-thirds of that amount toward a property tax cut for homeowners 65 and older instead.
“The Senate is absolutely committed to providing additional tax relief,” said Beaufort Sen. Tom Davis, a member of the six-person House-Senate negotiating committee. “If it’s a choice between earmarks … or funding property tax relief, for me, that’s an easy call to make.”
Other issues dividing negotiators include $150 million for cost overruns at Scout Motors’ state-subsidized manufacturing site in Blythewood, proposed studies on the environmental and economic impacts of data centers, and a one-year suspension of the requirement that bars and restaurants carry $1 million in liquor liability insurance.
After failing to make any meaningful headway at its June 30 meeting, committee members agreed to recess until July 14, while efforts to break the impasse continue behind the scenes.
House Ways and Means Committee Chairman Bruce Bannister, R-Greenville, told reporters that he thinks members broadly agree on policy, and should be able to work out their differences over the break.
“There are disagreements in the margins of how we do that,” Bannister said. “Which I think we’ll be able to do — not easily, but fairly efficiently — between now and the 14th.”
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