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Article published Mar 14, 2003
Legislators raise fees but leave taxes alone

JIM DAVENPORT
Associated Press

COLUMBIA -- House members managed to steer clear of tax increases as they gave key approval to South Carolina's $5.1 billion budget Thursday night in a 74-43 vote.
However, in order to pull in some extra cash to deal with the state deficit, the House approved $37.4 million in new or increased fees for a variety of goods and services.
"We didn't want to raise general taxes and were already cutting agencies 15 or 20 percent in some instances," said Rep. Bobby Harrell, R-Charleston, chairman of the House budget-writing committee.
Most of the new money would go to the state's law enforcement and criminal justice agencies as they try to cope with budget cuts of 9 percent or more.
People convicted of traffic violations would see a $25 surcharge on their tickets on top of more than $100 in fees the state already levies.
All of the $23 million that surcharge generates would be earmarked for law enforcement and criminal justice agencies, with $9.3 million going to the Prosecution Coordination Commission and $7.7 million to the Corrections and Juvenile Justice departments.
The fee increases become part of temporary law, but they seldom go away; usually they're renewed in future budgets or are turned into permanent law. "More than likely, they will continue," said House Speaker David Wilkins, R-Greenville.
While the fees may help state agencies, they don't sit well with the people who would have to dip into their pockets to pay them.
For instance, the budget bill calls for a $100, or 50 percent, increase for new alcohol sales licenses. The measure also calls for a $200 increase for two-year alcohol sales license renewals. Those renewals currently cost $400 for beer and wine sales and $1,200 to $1,500 for liquor sales.
Those increased fees would raise about $2.4 million for efforts to reduce underage drinking.
Chris Staton, owner of Leesburg Liquors and Party Shop in Columbia, says people in his business already check IDs and a higher fee would hurt his business. "It's just another way to nickel-and-dime the industry as it exists," Staton said.
House members also made several last-minute attempts to add the state sales tax to lottery tickets.
Rep. Greg Delleney, R-Chester, said adding a nickel to the sale of $1 lottery tickets could generate about $30 million to add to base student costs.
"We're losing $30-to $40 million dollars a year because we don't charge sales tax on lottery sales," Delleney said.
But Harrell said it would fracture the lottery spending plan compromise reached earlier this week. "I think it's a mistake for us to break the compromise we all agreed to."
The amendment eventually was thrown out after Wilkins ruled that lottery tickets are intangible items that cannot be taxed. Subsequent amendments with different wordings were tabled.
Other businesses face higher fees, too.
The House bill contains a $50 increase for video game operators who now pay $200 for two-year licenses. That fee would help enforce regulations on those devices.
House Majority Leader Rick Quinn, R-Columbia, had put an amendment in the budget to force satellite television customers to pay a 3 percent fee, raising $2.5 million for agencies, including the Department of Disabilities and Special Needs.
But Quinn worked Wednesday and Thursday to scuttle that plan amid criticism from Democrats that it was actually a tax increase. After several tries, Quinn won a key vote Thursday on the issue, 93-19, and the plan was scrapped.
Without a clear way of replacing the money, Harrell opposed the move. "Do you want to do the fee on satellite television or do you want to reduce the funding to the Department of Disabilities and Special Needs, the Department of Social Services and the Department of Health and Human Services?" he asked.
The move temporarily put the budget out of balance, Harrell said. It later was put back in balance when additional money was transferred from the state Housing Trust Fund to the general fund.
The budget has some good news for the state's lowest-paid workers and bad news for those with the highest-paying jobs.
With no raises but higher insurance rates, many state workers would be taking home about $500 less each year, said House Minority Leader James Smith, D-Columbia. He and Rep. Herb Kirsh, D-Clover, won approval for a plan to give the state's lowest-paid workers a year-end bonus: $200 if they're paid less than $30,000 a year.
Kirsh also won approval for a plan to freeze pay for people coming into the state's highest-paying jobs.
The budget still requires a routine third reading before heading to the Senate and its Finance Committee. In May, House and Senate negotiators will work out differences in the spending plans.