COLUMBIA — A Senate committee approved a measure Tuesday that would allow the state to issue $120 million in bonds to deepen the Charleston port if federal funding for the work falls through.
“We’re making sure we can tell the world that just in case the federal government doesn’t or can’t fulfill funding, then South Carolina will,” said state Sen. Larry Grooms, R-Bonneau.
The move is an attempt to make sure the state’s largest port, a major state economic driver, can accommodate bigger cargo ships expected to follow the completion of the Panama Canal expansion in 2014.
There’s concern from some South Carolina elected officials that the national fiscal climate could lead the federal government to not provide its $120 million share of the estimated $300 million Charleston port-deepening project.
The bill, introduced by Finance Committee Chairman Hugh Leatherman, R-Florence, is intended as backup.
“I just think (the deepening) is so crucial to the future of our state,” he said.
“We’re going to (deepen) our port with or without the help of the federal government.”
Leatherman said that while passage of the bill would authorize the use of state capital-improvement bonds, they wouldn’t be issued unless the federal government doesn’t fund its portion of the port deepening.
The deepening project is in an early study phase that could be complete in two years.
The House budget for next fiscal year passed last month included $180 million in state funding for the deepening work.
Sen. Kevin Bryant, R-Anderson, was the only member of the Senate Finance Committee to vote against the bill and said he will issue a minority report noting his opposition.
Bryant said he doesn’t want the state to take on additional debt.
State budget advisers estimate that issuing the bonds would cost the state $11.2 million for the term of the bonds.
But state debt payments are expected to decline for the next five fiscal years, so the impact on the state budget is likely to be neutral, the advisers said.
That’s because the new debt payments that would accompany the issuance of port-deepening bonds would be absorbed by the declining debt service and other savings.
The advisers noted issuing the bonds would, however, slow the rate of decline of state debt service.
Minority reports like the one Bryant said he will file often stall progress on bills because two-thirds of the Senate must vote to override such a report before debate can begin in the chamber.
The bill already has 26 of the state’s 46 senators as sponsors, but Leatherman said he’ll try to work with Bryant to resolve his concerns before seeking a vote to override his opposition.
Leatherman’s measure also would allow the state to issue up to $18.5 million in bonds to dredge the Georgetown port.
The deadline to pass the bill and get it to the House is May 1.
Reach Stephen Largen at 864-641-8172 and follow him on Twitter at @stephenlargen.