Senate committee OKs plan that would cut state employees' raises

COLUMBIA -- State employees wouldn't receive pay raises next year under a spending plan passed Tuesday by a Senate committee.

Pay raises are the latest casualty of plunging state revenues.

A day after state economists reduced revenue estimates, the Senate filled a budget hole with $40 million earmarked last week for 2 percent employee raises.

"They're going to be extremely disappointed. In some cases, there is going to be disbelief," said Broadus Jamerson III, president of the South Carolina State Employees Association, noting the raises were granted in a Senate budget draft passed last Thursday.

"It's going to be a hard pill to swallow."

The committee also eliminated a long list of projects that were to be funded with a $124.5 million reserve fund. The reserve fund can be spent only if revenues meet projections, and on Monday, economists said the state was $90 million behind for the current budget year.

Among the projects cut:

• $19.7 million to purchase new school buses, part of a law approved last year;

• $10 million for tourism advertising;

• $7.5 million for the state Department of Corrections to purchase new vehicles and communication equipment;

• $7 million for the Commerce Department to seal relocation or expansion deals with businesses; and

• $4.5 million for a high-speed data service at state research universities.

Some lawmakers, such as Sen. Greg Ryberg, R-Aiken, said it was short-sighted to cut the Commerce and tourism money, since they could bring in more revenue.

Senate Finance Chairman Hugh Leatherman, R-Florence, agreed but added: "If you don't have the money, you simply don't have the money."

In addition, a decline in sales-tax revenue means school districts will receive $60 million less this year and the budget year beginning July 1.

The cuts are just the latest in a budget year that has seen state revenues go from boom -- $1.5 billion in new money last spring -- to bust -- just $140 million in new money this year. More than $220 million in tax cuts last year both in sales and income taxes also contributed to the drop.

The swing has meant cuts at most state agencies, borrowing from reserve accounts and very little in new spending.

Gov. Mark Sanford said the downturn should have been anticipated. Lawmakers, he said, have been growing government quicker than the state's ability to pay for it.

"This was not unpredictable. We can react to the numbers now, but to some degree, you could see this movie a long time coming," Sanford said. "It's important to know this thing isn't over yet. ... You're going to have a continuing squeeze."

'I know it ain't fair'

But it was eliminating employee raises that caused lawmakers the most concern.

"Every time we get in trouble, we balance the budget on the backs of state employees," said Sen. Kay Patterson, D-Richland, himself a former state employee. "I know it ain't fair."

The average state employee earns about $32,000 per year, Jamerson said, citing their most recent survey from a few years ago. Those employees, he said, are dealing with increases in gas, food and other necessities.

Sen. Larry Grooms, R-Berkeley, said it was difficult to eliminate raises, but it also made no sense to give raises and then force agencies to furlough employees because of deeper budget cuts.

This will be the third time in 10 years that state employees have not received a raise; the last times were in 2003 and 2004. Those years, Jamerson said, employees also had to pay for health insurance increases as well as additional fees for medical services.

Employees have received 3 percent or 4 percent raises during the past several years.

The Senate's proposed budget does pay the $35.7 million additional cost of health care for state employees. The bill now heads to the Senate floor, where lawmakers said they hope to restore some or all of the raises.