COLUMBIA — The Legislature sent the governor a budget Thursday that gives public workers a pay raise, fully funds a crucial port-deepening project and provides tax relief to businesses.
The House voted 89-10 for the budget compromise and the Senate, 26-8.
But the $6.7 billion spending plan for state taxes won’t take effect when the fiscal year starts Sunday. By law, Gov. Nikki Haley has five days to issue her line-item vetoes, and she’s said she shouldn’t have to shorten her allowed time just because the Legislature couldn’t get its work done on time. The regular session ended June 7.
The budget includes $1.3 billion in additional one-time and recurring revenue but remains below pre-recession spending levels.
Senate Finance Chairman Hugh Leatherman, R-Florence, called it a “sound, conservative budget that addresses the state’s needs and ensures out ability to compete globally for jobs in the future.”
The weeks-long stalemate on the budget broke within days of a state government shutdown. Legislators in office for more than 30 years can’t remember ever starting a fiscal year without a budget in place.
To keep government running, the Legislature also gave final approval Thursday to a continuing resolution that bridges the gap.
Haley signed the resolution hours before a 4 p.m. deadline for payroll authorization, guaranteeing that 43,800 public workers will get paid as scheduled Monday. Since the continuing resolution funds government at current levels, those paychecks won’t include the new budget’s pay increases.
The increases will be retroactive. Employees should see the difference in their next check, unless Haley vetoes the pay raises.
The budget includes a 3 percent pay increase for most state employees, though state law enforcement officers who make less than $50,000 will get a 5 percent boost. The bill also covers state employees’ rising health insurance premiums and provides $48 million to school districts specifically to increase teachers’ pay by 2 percent.
The budget puts an added $153 million in the state’s main funding source for public schools, increasing its per-student allocation by $132 to $2,012. That money primarily pays teachers’ and assistants’ salaries and gives an additional $5 million for charter schools organized under the statewide charter district and covers a $36 million drop in federal money for special needs students.
The plan allocates $300 million to dredge the Charleston harbor to a 50-foot depth to accommodate mega-size ships expected to call after the Panama Canal is widened in 2014. They’re currently limited to a two-hour tidal window. Charleston competes with other East Coast ports for the business, including Savannah, Ga.
Legislative leaders called the project the state’s top economic priority.
The tax cut deal reduces the income tax rate that small business owners pay on their earnings from 5 percent to 3 percent over three years, eventually providing $60 million in relief. The tax cuts benefit businesses organized as limited liability corporations, S corporations and sole proprietorships.
The budget also provides businesses relief through unemployment insurance, by providing $77 million toward keeping rates down.