Local Bills Again Under Scrutiny

When the S.C. General Assembly reconvenes Tuesday, lawmakers are expected to focus mainly on the redrawing of legislative and congressional district lines.

But there’s also a chance, though slim, that they might wrestle with another hot-button issue: whether to break with long-standing legislative tradition and vote on two local bills that would allow two school districts to issue general obligation bonds for operating expenses.

Traditionally, lawmakers in both chambers have stayed on the sidelines when it comes to voting on bills that pertain only to individual counties or school districts outside their districts, leaving it to the legislators from those areas.

The effect of that practice, however, is a concentration of power in the hands of a few or even a single lawmaker who could override a gubernatorial veto of a local bill.

Last month, 35 members out of the 46-member Senate disregarded tradition and weighed in on a local bill (S. 785) that would have allowed the financially struggling Florence School District 4 to issue bonds for general operations, which would have been repaid by district taxpayers. After a heated debate, the vote was 18-17 to sustain Gov. Nikki Haley’s veto of the bill.

In her June 14 veto letter, Haley said school districts “should not fund short-term operational costs with long-term debt backed by taxpayers.”

“Having disastrous effects in other states, like California, such financing schemes are simply unsustainable in that they turn debt-service into a back-door education tax that allows local school districts to live outside of their means,” Haley wrote.

“Rather than relying on a finite stream of one-time stimulus funds for recurring expenses,” Haley continued, “school districts should have better managed their budgets and prepared for the end of this funding source.”

The Nerve in May first reported on the Florence District 4 bill and four other similar local bills for the Hampton District 2, Colleton County, Jasper County and Charleston County school districts.

As with the Florence District 4 bill, Haley vetoed the bills for Hampton District 2 (S. 877) and Colleton County (H. 4149) on June 7. But the General Assembly hasn’t yet made any final decisions whether to override them, though the Colleton County delegation in the House voted 2-1 on June 14 to override the veto on the Colleton County bill.

Under a concurrent resolution passed by both chambers, the Legislature can consider gubernatorial vetoes when it reconvenes Tuesday.

The other two school bond bills dealing with Jasper and Charleston counties didn’t make it out of one chamber or the other this year.

Senate Majority Leader Harvey Peeler, R-Cherokee, who broke with tradition in voting to sustain Haley’s veto of the Florence District 4 bill, told The Nerve last week he believes that lawmakers’ views are slowly changing.

“I believe it’s a sign of the elimination of local legislation,” he said. “Maybe not this year, maybe not next year, but I see the mood changing in the Senate.”

Peeler said if the school bond bills for Colleton County and Hampton District 2 come up for a vote this week in the Senate, he will vote to sustain Haley’s vetoes.

“It’s bad policy, ” he said of the bills. “It has been said that it (school district bonding authority for general operations) has been done before. But two wrongs don’t make a right.”

As for local bills in general, Peeler said he believes that “if it’s truly local in nature, then let the local government handle it; if it’s statewide in nature, then the entire Senate needs to handle it.”

Like Peeler, Sen. Shane Martin, R-Spartanburg, another member of the group that sustained Haley’s veto of the Florence District 4 bill, told The Nerve he would support the vetoes of the Colleton County and Hampton District 2 bills if they come up for a vote this week.

“If you’ve got to put your power bill on your credit card, you’ve got a problem with your budget,” he said.

Martin said he is concerned that if one school district is allowed to sell taxpayer-backed bonds to support general operations, other districts would follow suit, noting that the Florence District 4 bill had “statewide impact.”

Still, Martin isn’t ready to abandon the legislative tradition of allowing local delegations to vote on local bills.

“If something comes up, and it’s truly local, and it’s going to have local impact only, I will not stand in the way of stuff like that,” he said.

Senate Minority Leader John Land, D-Clarendon and the sponsor of the Florence District 4 bill, told The Nerve last week that he suspects that “this same small group” of senators who voted to sustain Haley’s veto of his bill will likely uphold her vetoes of the other two bills if they come to a vote this week.

“I was really surprised at my fellow senators who did not follow precedent to allow the local senatorial delegation vote affecting the school district in our area,” he said. “We fully stated we would accept full responsibility (for the local delegation vote for the bond bill).”

Still, despite other senators “meddling in our district,” Land said he has no plans to interfere with any future local bills sponsored by those senators who voted to uphold Haley’s veto of his bill.

The Nerve reported earlier that as of the end of the 2009-10 fiscal year, Florence District 4 listed a negative fund balance of $1.3 million, according to S.C. Department of Education records. Land’s bill would have allowed the district to sell up to $1 million in general obligation bonds – without voter approval – to “mitigate a deficit” for this fiscal year and next year.

Land earlier told The Nerve that any talk of merging Florence District 4 with Florence District 1 was on hold because of District 4’s financial woes.

Land last week said he was informed that because Florence County Council likely will reject District 4’s request for additional funds, the district is preparing a “bare-bones educational system” for this school year. That would include cutting all sports and other extra-curricular activities, he said.

“It’s a terrible thing for the students,” Land said. “Education is more than just books.”

Rep. Kenneth Hodges, D-Colleton and sponsor of the Colleton County bond bill (H. 4149), told The Nerve last week that he doesn’t know if the Senate will take up his bill this week, noting, “It’s kind of up in the air.”

Hodges said H. 4149 should be considered, pointing out that at least two Republican-authored local bills were vetoed last year but overridden by the respective local delegations. He said he introduced his bill only because of the loss of state dollars to the school district over the past several years.

“It’s unfortunate that many of our rural school districts are not funded at the proper level that they should be,” Hodges said.

Hodges’ bill, introduced April 28, would allow up to $2.5 million in bonds to be sold to support general operations in the Colleton County School District “so as to mitigate a deficit” for the fiscal year that ended June 30, this fiscal year and next year.

The other bond bill that could be taken up this week – S. 877 for Hampton District 2 – is sponsored by Sen. Clementa Pinckney, D-Jasper, who, according to a spokeswoman in his State House office, was out of town last week and could not be reached for comment.

In an interview in May with The Nerve, Pinckney described his bill as “sort of a bridge loan” that would allow the district to “better manage their cash flow and help them remain solvent.” He said the bond bill, if passed, would not result in any tax hikes.

Pinckney also is the sponsor of another bond bill (S. 884) for the Jasper County School District. Based on Pinckney’s sole vote in May, that bill passed the Senate, though the county’s House delegation didn’t advance it.

A fifth school bond bill (H. 4094) for the Charleston County School District unanimously was passed by 10 House delegation members in April, though it stalled in the Senate.

“I don’t know who it is, but someone in that house (the Senate) has a hang-up with it,” the bill’s sponsor, Rep. Leon Stavrinakis, D-Charleston, told The Nerve last week.

Under the joint resolution, the Charleston County district could use general obligation bonds for school operations, though any bonds used for that purpose would have to be repaid within a year. Stavrinakis said his bill, if passed, would not result in a tax increase.

“I made them (school district officials) give a commitment they wouldn’t raise taxes, and they put it in writing,” he said.

Stavrinakis said unlike most other school districts in the state, Charleston County relies on a relatively high percentage of local property tax dollars compared to state funding. With the downturn in recent years in the real estate market and the effects of Act 388, which eliminated school operating taxes for homeowners in exchange for a 1-cent increase in the state sales tax, the Charleston County district’s cash flow has been hurt, he said.

“Without raising the millage rate, you don’t have anywhere else to go,” Stavrinakis said.

“I don’t want to see taxes raised, and I don’t want to see good (school) programs cut,” he continued. “I just think the Senate should just get off their butts and do something.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org.