COLUMBIA, South Carolina — South Carolina's economic advisers officially certified Friday a windfall in tax collections, giving legislators an additional $300 million in discretionary spending.
The Board of Economic Advisors voted unanimously to recognize a total of $415 million in revenues that were higher than previously expected. The additional revenue includes what's coming into state coffers above expectations through April 30 and how that affects projections for the fiscal year starting July 1.
"It's very good news," said Frank Rainwater, director of the state's Revenue and Fiscal Affairs Office. "The economy continues to improve."
The biggest chunk of the additional revenue — about 44 percent — comes from personal income taxes. Rainwater said that's due to more jobs.
Sen. Tom Davis, R-Beaufort, alerted legislators to the potential windfall last week during his filibuster against raising gas taxes. With just three days left in the regular session, Davis still holds the podium. He's officially blocking part of the Senate's budget package, but his stance is part of the larger debate about how to fund road and bridge construction in South Carolina.
A bill that would raise an additional $800 million yearly for roadwork is next on the Senate's calendar. A proposed amendment by Senate Republicans would also cut income taxes by $700 million yearly once fully implemented in five years — a plan rejected by Democrats as primarily benefiting the wealthiest residents.
Davis insists economic growth alone can fund roadwork, using this year's boon as an example. He wants the entire surplus to be sent to counties for repair of existing roads.
But, even if they could agree to do so, legislators can't use the full $415 million on roads.
About $38 million of that must go toward tax relief, because it's coming from the extra penny-on-the-dollar legislators added to the state sales tax in 2006 in exchange for cutting property taxes on owner-occupied homes. An additional $40 million must be spent on K-12 education, as it's generated from the penny that a 1984 law added to the state sales tax for innovative education programs. The $36 million that comes from additional lottery profits is limited to certain education expenses, such as college scholarships.
However, that could free up money elsewhere in the budget, as lottery profits no longer cover all scholarships the state's obligated to fund.
The House Ways and Means Committee has called a special meeting Monday to craft a supplemental budget bill that spends the additional revenue.
By law, the session must end at 5 p.m. Thursday. But with a state budget still far from done, the Legislature this week passed a measure creating a three-day special session June 16-18. Another special session is possible.
The House voted unanimously Thursday on a measure that would keep state government running at current levels if a budget isn't in place by July 1.
Such a continuing resolution was last necessary in July 2012, to cover the week between the Legislature reaching a budget deal and Gov. Nikki Haley issuing her budget vetoes.