House restores HOPE scholarships

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The House could finish the budget debate today, but disagreements over healthcare, education and public safety funding priorities will continue for weeks in the Senate.

Much of the debate Wednesday focused on public school funding, which under the current plan would cut per-student spending from more than $2,000 this year to $1,643 in the fiscal year that begins July 1.

House Democratic Leader James Smith said the current funding plan could result in higher local property taxes to fill the state gap. If no local taxes are increased, more than 6,000 teachers could lose their jobs statewide, he said.

Lawmakers from poor, rural counties took aim this week at the $30 million pool of Lottery money earmarked to provided endowed professors' chairs at the state's three research universities: Clemson University, the University of South Carolina and the Medical University.

Rep. Joe Neal, D-Hopkins, described the endowed chairs money as a "sacred cow that no one is willing to challenge," and proposed on Tuesday that the $30 million be directed instead to increase the per-student funding formula for public schools.

Neal's proposal was defeated, as was a similar one again on Wednesday. But the battles to shift resources from one budget line to another showed the deep reservations lawmakers in both parties have about the level of public school funding in the proposed budget.

"We're killing our education department with this budget. Our property taxes back home are going to go up to cover costs we are not covering here," said Rep. Bob Walker, R-Landrum.

Debate also continued over the best method to ensure Medicaid, the state-federal partnership to provide healthcare to the poor and elderly, is adequately funded.

On Tuesday, House Republican leaders proposed a plan they said would fully fund Medicaid that relies on refinancing the state's Tobacco Settlement bonds, taking $20 million from public schools, using about $45 million of non-recurring money to pay for recurring programs, and adding $20 million in new taxes on the state's public hospitals.

On Wednesday, about 300 advocates of a cigarette tax increase to fund Medicaid rallied in front of the Statehouse, demanding that 53 cents be added to a pack of cigarettes to bring the tax to the national average.

Anton Gunn, director of South Carolina Fair Share, told the gathering that groups who rely on Medicaid do not want to see healthcare fully funded at the expense of public schools. He described the House Republican plan as "fuzzy math and funny money" and said the cigarette tax increase would stabilize and protect the healthcare system.

The House plans to take up a separate Medicaid reform bill after it finishes the budget, a measure that could include a cigarette tax increase. On Wednesday, a House subcommittee defeated a proposal to add a 22-cent cigarette tax increase to the bill.

But Rep. Rex Rice, R-Easley, said he still hopes to have the tax increase added either in full Ways and Means Committee or on the floor of the House.

Rice said House Republican leaders do not want the tax increase because they think it will look bad for the GOP, which controls the House, Senate and Governor's office.

But Rice said he will continue to push the tax increase, and believes many House members in both parties will support it. He estimated a 22-cent tax increase would replace all the non-recurring money currently earmarked for Medicaid.

"I'm looking at what I think is best for the state," Rice said.

But the biggest change in the spending plan Wednesday was the addition of about $14 million to college scholarship programs funded by the lottery.

House Ways and Means Committee Chairman Bobby Harrell, R-Charleston, said his committee had determined that while the Lottery Commission was allowed to spend 8 percent of revenues on administration, it had in fact been operating on 5.9 percent of revenues. So, Harrell proposed taking the 2 percent difference to restore HOPE and need-based scholarships that had been deleted in committee.

"We heard from all over the state that people wanted this," Harrell said. "The House budget protects and enhances important scholarship programs as well as aid to county libraries and our K-5 reading program," House Speaker David Wilkins, R-Greenville, said.

About $1.5 million also was restored to aid to libraries.