Disagreement over spending surplus causing delay in state budget talks

State lawmakers are expected to continue returning to the Statehouse through at least July this year, after budget writers announced Monday they have failed to reach a compromise on the state’s roughly $7 billion budget.

South Carolina will likely not ring in the new fiscal year with a budget.

A committee of Senate and House budget writers left Columbia on Monday without reaching a compromise on the state’s roughly $7 billion budget. That means they won’t have a budget to present on June 16 when legislators return for a special session.

Senate President Pro Tempore Hugh Leatherman, R-Florence, said he will push for the Senate to pass a resolution that keeps state government operating and funded at current levels past July 1, when the fiscal year starts. The House already has passed it and Leatherman, chairman of the Senate Finance Committee, said he’ll call the committee to Columbia to pass the resolution in coming days.

Come July 1, he said, the state will have a continuing resolution that will ensure “all of the obligations of the state are met and state employees are being paid.”

The main sticking point over the budget is the additional $415 million the state took in above projected revenue this year.

The Senate wanted to use the windfall for a one-time $800 bonus for state employees, to cover 2014 ice storm-related damages, and the rest for roads and bridges. Roads funding was another top priority that lawmakers and Gov. Nikki Haley couldn’t agree on before time officially expired on the 2015 legislative session on Thursday.

The House dealt with the extra money separately from the main budget bill.

“In the House, we don’t do wish-list spending,” said Rep. Brian White, chairman of the House Ways and Means Committee. “We said from the onset that the House was intending to fully debate the new revenues ... and we would have that debate separate from the budget debate.”

The Anderson Republican said he was surprised with the impasse on Monday at the conference committee, adding that there had been no changes in the House’s plan on how to tackle the budget.

Failing to reach a compromise means that lawmakers will have to continue to return to Columbia through at least July. Even after the budget is ratified, lawmakers will have to return if they want to override any potential vetoes by Haley.

The last time the state operated on a continuing resolution was 2012, when they fought over a tax cut for small-business owners and raises for state employees, among other issues. This time, there are “several sticking points,” but how the House addressed the state’s spending on roads in the main budget bill is a “big one,” Leatherman said.

White countered that the Senate’s approach to fixing the state’s roads with the extra money is not enough. To fix the state’s crumbling roads, a long-term, sustainable cash stream is needed, he said.

The House passed a roads funding bill earlier this year that died in the Senate because of a series of filibusters. Beaufort Republican Sen. Tom Davis spent recent weeks filibustering and advocating for the state to use all of the extra money and the state’s rainy day cash for roads.

Davis also wanted the state to use the money in a $237 million bonds bill for roads. Both the bonds bill and the capital reserve bill, which allocated the state’s rainy day cash for higher education building projects, failed to advance in the Senate before Thursday. Davis has said he won’t continue to block passage of the capital reserve bill.

In the meantime, neither chief budget writer would predict when the state would have a budget ready.

“We’ll just have to see what the Senate does and gets back to us,” White said. “As we all know, the recurring theme this year is ‘It’s all in the Senate.’ ”

The Associated Press contributed to this story. Reach Cynthia Roldan at 708-5891.