City and county governments in South Carolina may have fewer dollars when they consider their budgets this year after a Wednesday decision by the S.C. Senate prioritized early education spending over additional funds to local governments.

For years, the state has allocated additional dollars to municipalities primarily to help with state-mandated services, such as magistrates, offices for solicitors and running elections. It's the second-largest revenue stream for localities, lawmakers said.

Those funds began to be cut during the 2008 recession as the state prioritized other needs. Legislators have dipped into that pot of funds rather than funding the full amount, which is supposed to be 4.5 percent of the general fund budget. It is generally much less than that. This year the fund totals around $212 million.

Sen. Larry Martin, R-Pickens, hoped to restore $16 million to the local government fund this year, but instead the money was allocated by the Senate Finance Committee toward expanding kindergarten programs for 4-year-olds.

Senators voted Martin's proposal down 29-13.

"I don't care how much money we give, they are always going to need some more money," said Sen. John Scott, D-Columbia.

Martin said that localities likely will receive the funds eventually because more money is expected to materialize with the economy picking up. But because local governments are completing their budgets now, they won't be able to budget those funds.

"It's effectively a cut to them," Martin said.

The House version of the budget includes the additional local government funds. The difference will likely be a part of budget haggling when the Senate and House merge their two budgets and look for compromise.

If the Senate version passes, Charleston County would receive $1 million less and Berkeley County $500,000 less, according to budget documents. The funds are divvied up by population.

The difference between the Senate and House comes from some budget trickery. The Senate placed part of the local government funding on a list of items to be funded if budget projections turn out to be rosier than expected -- essentially a "wish list." Lawmakers expect state revenue projections to go up, but there is no guarantee. Martin said it would be better to make sure the funds are given to local governments.

"It's a very tough spot for us to be put on when it comes to appropriating money," Martin said on the Senate floor. "I would urge the Senate not to take it out of the local government pot."

Others disagreed, saying early childhood education is a key program and that the state sent the right message by prioritizing it.

Sen. Chip Campsen, R-Charleston, also disagreed with under-funding local governments. "This is a chronic problem that we do need to address. We're reneging on our commitment to them."

Reach Jeremy Borden at 708-5837.