By Andy Brack, editor and publisher | A lot of people might not realize they’re going to get some tax relief this year, thanks to the just-passed law to hike gas taxes by 12 cents per gallon over the next few years. Tax relief for the working poor is just one major impact of work done by the General Assembly during its 2017 session. There remains, however, a lot left on the table for next year.
This story highlights legislative accomplishments, what’s ahead in two weeks and what’s left for 2018.
Two big accomplishments in 2017
The General Assembly passed two major bills in 2017 – the gas tax hike and a move to reform the state’s pension system for its employees. It raised the amounts that employees and the state put into the fund to make it more stable. Pension reform resulted after a $21 billion pension fund hemorrhage caused in recent years by investment strategies and other issues. More details on pension reform.
The gas tax hike will raise an estimated $633 million a year for roads by the 2027. The measure calls for several tax relief measures, including:
Earned Income Tax Credit. This credit is open to working families that qualify for the federal credit started under President Ronald Reagan. The state’s version is a “non-refundable” credit in that it will allow families to get income tax refunds that may wipe out their state income tax liability, but they won’t get any money beyond a zero tax liability. An estimated 150,000 state residents are expected to get an average credit of $290 per year, with about 80 percent getting $210 and 20 percent getting up to $630 back on state taxes they paid while working. An example: If a working family pays $700 a year in state income taxes taken out weekly during the year, they may get up to $630 in cash back in a refund, but no more. If they paid $150 for the year in state income taxes, they might get back $150, but no more.
“The General Assembly was working under difficult constraints to invest in infrastructure without burdening lower-income working families,” said Bryan Boroughs of the institute of Child Success. “Including a substantial EITC in the final agreement was a smart bipartisan policy decision that achieved just that. It is good for kids and good for working families, and we are very grateful to the legislature for their work.”
- Two wage-earner credit. Prior to this year, families with two wage-earners were able to get a tax credit for working. The new law increases the credit by about $3 million a year to $21 million in 2027. This additional benefit will impact about 360,000 families or more than 700,000 taxpayers.
- Enhanced college tuition credit. Similarly, there’s already a college tuition credit for families with kids in state colleges. Prior to the new law, the credit was capped at $300 per year. The new credit is capped at $1,500 per year. The credit is expected to help about 7,000 families each year.
- Tax rebate. The new law also creates a structure from year two to year six of the new gas tax that will allow people to receive income tax credits – or rebates – of the money they spent on higher gas taxes, but they will have to keep up with the paperwork to prove it.
- Business relief. The new bill also provides a manufacturing property tax exemption worth $35 million a year by 2027.
Other 2017 highlights
As of May 9, state lawmakers ratified 62 bills, most of which were signed by the governor into law. Some just-passed bills still need gubernatorial action. For a list of bills that were ratified by the General Assembly, click here. Bills ratified May 10 and May 11 are not yet listed. Among highlights:
- REAL ID. 3358 changed the state’s driver’s license criteria to make it compliant with federal standards. Failure to have passed this would have resulted in S.C. identifications not being accepted at airports or federal buildings.
- Industrial hemp. 3559 creates an industrial hemp program to allow for research on industrial hemp and allow for regulations on growing, selling and importing it. This will diversify crop alternatives for farmers.
- Pyramid schemes. 3883 classifies pyramid promotions schemes as illegal, unfair trade practices.
- Opioid crisis. State House members introduced 10 bills in February to try to deal with the state’s growing opioid crisis and two passed muster by the end of the session. H. 3817 would allow pharmacies and other entities to register as collectors for drug take-back programs. H. 3824 requires mandatory use of a Prescription Drug Monitoring Program.
What’s ahead in two weeks
State lawmakers will return to Columbia on May 23 to vote on the state’s annual $8 billion spending plan for state tax dollars. At issue as a conference committee of key House and Senate members meets in the next week is whether there will be any pay raises for employees in the budget. Some senators want it, but House members say that employees are getting taken care of this year because lawmakers are increasing what they pay into the pension system to ensure it is more stable. More.
Still on the table
Because the session was shorter by three weeks and because three big bills – pension reform, the budget and the gas tax hike — sucked a lot of the oxygen out of the General Assembly, many proposals now are pending for next year’s session. (Bills introduced this year can be considered in the second year of the two-year session.)
“There obviously was some stuff that needed to be addressed that did not get addressed,” one longtime political observer noted. Among measures left on the table:
Guns. There was a lot of talk this year about allowing out-of-state people with concealed weapons permits to be able to carry guns in South Carolina. Several bills are pending. Additionally, gun reform advocates continue to wait for the repeal of the “Charleston loophole” by requiring a longer period for completion of a background check before sales of guns. More.
Education. State lawmakers did little in 2017 to deal with the 2015 state Supreme Court decision seeking solutions for more education equity in poorer school districts. The legislature and poor school districts are under a court order to come up with ways to pay for the state’s failure to provide adequate public education opportunities, especially in poor, rural districts. The court has said it would provide oversight on the case until the state got its act together. Teachers say they also remain concerned about several bills that seek to change public school funding by providing vouchers or tax credits under the guise of “school choice.”
Opioid crisis. House lawmakers introduced a series of bills to deal with the growing opioid crisis impacting the state. At least eight bills remain on the table.
Dark money. While lawmakers passed ethics reform in 2016, bills filed in January called for better rules dealing with “dark money” to make elections more accountable.
Bond bill. The House Ways and Means Committee called for $425 million in state borrowing to deal with deferred maintenance, mostly at state colleges and universities. But with the gas tax hike being on the table this year, there didn’t appear to be much hunger for spending even more money.
Abortion. Next year, like just about every year, anti-abortion advocates will push for abortion limits. In 2017, little progress was made but about a dozen bills were introduced to limit choice.
Other measures. Lots of other bills remain on legislators’ plates, including measures to:
- Encourage development of solar farms;
- Allow local plastic bag bans;
- Stop offshore oil drilling and exploration;
- Raise state employee pay;
- Permit medical marijuana;
- Update local government annexation laws and provide tax relief to local governments;
- Restructure the state Commission on Higher Education;
- Recraft the state’s animal welfare laws;
- Consolidate school districts; and
- Change the way judges are picked.
And if state prosecutors charge more people in an ongoing corruption investigation, there might be more changes ahead for ethics laws.
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