Lawmakers have full plate this year

The 2012 legislative session begins Jan. 10 and ends in June. All 170 House and Senate members are up for re-election in November.

Mary Ann Chastain

COLUMBIA -- South Carolina lawmakers are about to embark on their 2012 session, but how much will their work in the next six months change the lives of the men, women and children who call this state home?

Gov. Nikki Haley said that depends on which steps the Legislature takes to create jobs for the nearly 10 percent of workers who are unemployed.

Senate President Pro Tem Glenn McConnell, R-Charleston, said he is focused on pocketbook issues such as limiting what lawmakers can spend in the future and which fees state agencies can charge.

House Speaker Bobby Harrell, R-Charleston, puts the emphasis on the big picture and what will bring long-term economic prosperity.

But the difference between meaningful change and political rhetoric comes down to the courage lawmakers can muster in an election year.

All 170 House and Senate members are up for re-election in November.

The state's three top Republican leaders and key Democrats outlined for The Post and Courier the issues at the top of their agenda for the January-to-June session that begins Jan. 10.

"Fiscal issues will be the dominant issues of this legislative session from the budget to tax reform to the retirement system," Harrell said. "I think an election year makes it more likely that we'll get progress because everybody is on the ballot."

Money matters

--Haley will lay out her vision for economic policy in her executive budget, due early this month. She said to achieve strong job creation numbers in 2012, the Legislature should phase out the corporate income tax and reduce the tax on manufacturers. The governor also wants the Legislature to simplify the individual income tax to eliminate three of the six brackets.

"Our goal in this administration is to get every person in a job," Haley said.

She said she wants "truth in budgeting" that looks at overall state government spending, such as fines and fees imposed by state agencies, not only the $6 billion-plus portion in the general fund.

Research by the South Carolina Policy Council, a conservative think tank, puts state spending at nearly $22 billion, which includes federal tax dollars that flow to South Carolina and tuition paid by students at the state's colleges and universities. The Legislature's general fund budget -- and the portion subject to the most floor debate and committee work -- is about $6 billion, or just 27 percent of government spending.

--McConnell has a "fiscal fitness" plan. The plan's most significant elements call for a constitutional spending cap and the creation of a commission that uses zero-based budgeting to prioritize government services.

--Harrell added the elimination and protection of certain sales tax exemptions to the list of 2012 priorities. Harrell said the Legislature needs to keep breaks on residential electricity and water, groceries and prescription drugs on the books. Other exemptions -- and he wouldn't say which ones until he develops some legislative consensus to avoid a target list for lobbyists -- need to go.

Issues to watch

--Deepening of the Charleston port and settlement of the long-simmering dual rail access issue will prove to be an undercurrent in the 2012 session. Lawmakers are also expected to stake out positions on the future development of the Jasper port.

Any action will follow the recent controversy over the role Haley played in a water permit South Carolina issued to Georgia for the deepening of the Savannah port. South Carolina's ports are in direct competition with Georgia's.

--McConnell called Medicaid "a financial time bomb" that has the potential of bankrupting the state. As issues over the federal health care law, known to some as Obamacare, are sorted out nationally, the state will develop its plan to pay for the program that has seen dramatic cost increases as more South Carolinians turn toward social services.

Restructuring

--First on the Senate floor when the Legislature reconvenes is a bill to create a Department of Administration, under Haley. The proposed agency will shift authority from the Budget and Control Board, which McConnell said has "grown so big it's become almost a fourth branch of government."

The board is controlled by five members: the governor, treasurer, comptroller general and the Legislature's two top budget writers. It manages state government when the Legislature is not in session, with responsibilities such as maintenance of the state fleet and upkeep of public buildings. The board also can allow agencies to spend in the red, give colleges and universities the OK for building projects and set contribution rates for the state's retirement system.

Just how much control the Legislature will give the governor over the state administration and financial oversight is up for debate.

--Following a cash crunch that left the state Department of Transportation broke in 2011, the Legislature wants to figure out how to improve its management. The options are to put control of the agency under the governor's office or continue to split oversight between Haley and a commission of political appointees.

Lawmakers might also change the way the agency decides which road maintenance and construction projects are approved. Some argue that the state should increase the 16-cent-a-gallon gasoline tax, set in 1987, to better fund infrastructure. That is unlikely in a GOP-controlled Legislature during an election year.

Retirement

--The state's retirement plan for government workers, including teachers and police officers, is a mess. The Legislature must make decisions about future cost-of-living increases, retirement age and contribution rates.

The state needs a plan to generate enough cash to cover an estimated $13 billion to $17 billion worth of currently unfunded pension benefits promised within 30 years.

The consequences of their decisions will directly affect people's lives, said Senate Minority Leader John Land, D-Manning.

"Anytime you underfund the state workers, firemen, law enforcement officers or teachers, you're doing damage to your society in general and especially the middle class," Land said.

What won't happen

--Significant changes to the way public schools are funded in South Carolina likely will have to wait for another year. Politicians constantly talk about inequities within the schools -- with achievement and resources varying greatly between ZIP codes -- but any meaningful change to address that isn't likely to happen until after the election.

Lawmakers might, however, take some Republican- friendly steps such as increasing the amount of cash the state sends to charter schools.

Harrell said changing the education-funding formula is one of the most difficult tasks for the Legislature, and it hasn't been changed in some 30 years.

That's because changing the formula will create winners and losers among school districts.

--A dramatic overhaul of the state's tax code. Small-ticket changes to tax policy could find support in the next session.

McConnell said he hopes election-time pressure will force action.

"With the climate in Washington and across America -- and particularly in South Carolina -- we have a unique opportunity," he said. "There is a perfect political windstorm."

Rep. David Mack, D-North Charleston, said he is expecting a different kind of windstorm -- one created by political blustering.

"Forget about Democrat or Republican, liberal or conservative -- what's in your best interest?" Mack said.