State of South Carolina
Office of the Governor

Governor's Executive Budget Message
Fiscal Year 1996-1997

Governor David M. Beasley
December 20, 1995

Last Updated: 6/29/09 2:59 PM

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1996-1997 Executive Budget Message
Governor David M. Beasley
December 20, 1995

Quality of life in America depends on several very basic factors: control of one's own destiny, a good job, and access to quality education. In South Carolina I intend to make these factors a reality for everyone willing to reach for opportunity.

The Beasley Administration is committed to improving the quality of life for everyone in our state. This budget, my first submitted since being elected Governor last year, reflects that commitment. It also reflects my determination to shed some much-needed light on the budget process, allowing the public, for the first time, to readily understand where their tax dollars are being spent. This budget is not only "user friendly', it is "taxpayer friendly."

We remain firm in our determination to create more and better jobs for South Carolinians, to provide quality education in a safe environment for our children, to shrink the growth of government, and to provide continued relief for over-taxed working people.

This budget reflects that determination. We will:


This Executive Budget implements a significant format change. The evolution of our budgetary process had resulted in a document that was difficult to use by even the most seasoned legislator.

The new format makes it easier to see and evaluate exactly where tax dollars are being spent. It makes it easier to detect duplication of programs, eliminates hidden funding, enhances consolidation and continued restructuring efforts, and generally discloses far greater information for budget writers, lawmakers and most importantly, the public. The new format includes:


Every year there are several constitutional or statutory mandates which strictly limit discretionary allocation. The FY 1996-97 Executive Budget must expend over $76.4 million on such mandates. That amount is more than 12.5% of the total funds available. Following is a breakdown of these mandates:


Primary and Secondary Education

In Fiscal Year 1996-97, over 31% of all funds available to spend will be dedicated to education., totaling $101 million. I will address other revenue-related aspects of public education in my State of the State in January.


One of the primary goals of education is to provide our young people with a base upon which they can build a successful life. The technology now available through multiple sources will enable us to meet that challenge in an unprecedented manner.

Infrastructure is far more than four walls. It is also the technological skeleton around which our children will mold the experience and skills necessary to emerge successfully in the new century.

Regardless of the amount of money we invest in public education, access to the same human resources is not available in every school district.

This year, I am committing $20 million to the first phase of my plan to link every child in South Carolina public schools to the best courses available anywhere.

The Department of Education and South Carolina Educational Television (SCETV) will work cooperatively to provide every single public school with the ability to receive multi-channel or satellite programming from SCETV's satellite network. Our children will have access to advanced placement courses, specialized instruction and master teachers no matter where they are located. And much of the access will be interactive. There is no reason why every child in our state should not have access to the specialized instruction available at the Governor's School for Science and Math...just through the push of a button.

We are taking the critical first step toward ensuring that every child in every school has access to state-of-the-art technological resources. Every school building will be linked to the Internet, providing our children with a first class ticket to explore the world.

Business leaders tell me they need people trained in the technology of tomorrow. Parents tell me they want their children to have a future. This commitment to technology in the schools is a critical first step to meeting both goals.

Children's Education Endowment

The Children's Education Endowment, funded through Barnwell revenues, and not included in the above percentage, cements my resolution to create a new landmark opportunity in South Carolina: a college scholarship program for our young people.

The Children's Education Endowment will also underwrite my commitment to improve school buildings in our state. School safety is of paramount importance to all of us and takes many forms. Solid physical infrastructure is a critical element.

I propose that 100% of Barnwell revenues be allocated to the Children's Education Endowment. I will oppose any attempt to divert these funds.

In addition I propose:

Higher Education

In this Executive Budget, I am recommending $83.3 million for our colleges and universities.


This budget reaffirms my commitment to the taxpayers of South Carolina. After funding the constitutional and statutory mandates, approximately one-half of the total new, recurring revenue is dedicated to tax relief.

This is a new day in South Carolina government, and I intend to protect the working people of this state. While we continue to bring jobs to our citizens in areas where they're needed the most, and while we continue to improve education so our young people will have broader opportunities when they leave school, we must also continue to constrain the growth of government and return tax dollars to our citizens.

This budget commits a total of $143.8 million in increased tax relief to homeowners, senior citizens, business and industry, and families with young children.

Property Tax Relief

This year we provided the largest tax break in the history of South Carolina through property tax relief. For the first time in recent memory the debate has been about the amount of tax reduction rather than the amount of tax increase.

I propose to return more of taxpayers' own money to them through a further reduction in the school portion of property taxes. We will increase the Property Tax Relief Fund by $37 million, bringing it to a total of $232 million. This will increase the exemption amount from $100,000 to approximately $125,000.

This year the Property Tax Relief Fund contains $117.5 million in recurring dollars. We must expend 114.5 million in recurring and nonrecurring dollars in 1996-97 to reach the total fund amount of $232 million. I strongly recommend that a minimum of 67.8 million additional recurring dollars be directed into the fund, bringing the total amount of recurring dollars to $185.3 million. This is nearly 80% of the total needed to fund property tax relief in recurring dollars at the level I am recommending in this budget. The remainder will be provided this year by $46.6 million from the Carnell-Felder calculation dedicated to property tax relief until the fund is fully annualized.

Tax Relief for Families with Children

I am committed to continuing the phase-in of tax relief for families with young children. This is the third of the four year phase-in that in the fourth year will double the tax exemption for families with children under six. I have allocated $10 million in my budget for this investment in our families.

With this phase-in, families in South Carolina will be keeping $134 per child or a total of $30 million more in their family budgets for an estimated $2,600 in tax relief. This, combined with the child tax credit proposed in the Congressional budget currently under negotiation with the President, will provide over $350 million in tax credits for South Carolina families.

Tax Relief for Business and Industry

There needs to be equalization in the tax depreciation treatment of industrial and commercial property in South Carolina. Therefore, I propose lowering the manufacturing depreciation floor from the current 20% to 10% over the next three years.

This will provide over 6,000 manufacturers employing 370,000 or more people with the greater flexibility needed to invest in new, state-of-the-art equipment, thus retaining a critical competitive edge in the world's market. Increased spending on equipment means greater competitiveness, which means more orders for products, and ultimately, more jobs.

The reduction also means that South Carolina becomes even more attractive to manufacturers seeking new investment sites, which translates once again into more jobs for South Carolinians.

Each year of this phased-in reduction will save businesses $10.2 million with the total tax relief to business over $33 million by the third year.

Since this is a revenue decrease for local governments, I am also calling for the establishment of a state fund to reimburse local governments.

Tax Relief for Senior South Carolinians: an Economic Development Initiative

Senior citizens are a unique group of South Carolinians. Many are individuals on fixed incomes to whom this break means a real difference in quality of life. Many are retirees who reinvest in their communities, stimulating the economy, creating more wealth in the private sector.

We hope to attract more older Americans to South Carolina. This recruitment is a whole new wave of economic development in our state. Traditionally they place minimal demands on schools, social services and the criminal justice system, but give much back to their communities.

In this budget I dedicate $4.5 million to increase the exemption for South Carolinians sixty-five and older. Over 131,500 persons will pay no taxes at all on the first $15,000 of income. This, when taken in tandem with the existing homestead exemption and the dramatic property tax reductions, will make South Carolina an extraordinarily attractive retirement location for seniors.

Soft Drink Tax Reduction

I support the phase-in and eventual repeal of the soft drink tax. Action to accomplish this occurred in the FY 1995-1996 Appropriations Act, but does not take effect until FY 1996-97. Beginning this fiscal year, the soft drink tax will be reduced in increments of "sixths" until it is completely repealed in July 2001. The amount dedicated to the soft drink tax phase-out for FY 1996-97 is $4.6 million.


I will soon be announcing record breaking new figures in jobs and capital investments. We must keep pace with our own momentum.

In addition to the education infrastructure we are creating to help our children compete, we must provide the Department of Commerce with the resources necessary to recruit good jobs for which they can compete.

My budget proposes $48.8 million in economic development and infrastructure investment:

Department of Commerce

Motor Fuel Tax for Infrastructure Development

In this budget, we are creating an updated education infrastructure for our children and an economic development infrastructure to bring good jobs and a better quality of life to our people. All of our resources must be prioritized and dedicated to those areas most in need.

That includes resources from the gasoline tax. Our highway infrastructure needs are far too critical to continue sending gas tax monies into areas unrelated to highways.

Last year we added $24 million to the revenues available to the Department of Transportation through a revision of the gasoline tax collection point, receipt of interest on the Highway Fund, and decrease in payments to the Department of Public Safety and the Department of Revenue.

As a result of the revision of the gasoline tax collection point, the Department of Revenue expects a 10 to 20% increase in taxable fuel reporting due to increased compliance. This will mean a minimum of a $20 million increase in collections.

I propose removing from the General Fund the one cent of the gas tax it currently receives. This is a two year transition which will result in an additional $20.2 million to the Department of Transportation.

I also propose a redirection of 25% of funds known as "C" Funds. Currently, 2.66 cents of the gasoline tax go to the counties, but only 25% of that money is required to be spent on highway construction, improvements and maintenance of state roads. My budget increases that requirement to 50%, creating an increase of $12.5 million for state highway system improvement.

Over a two year period, we will have increased the amount of infrastructure resources available to DOT by $66.5 million. This is a real step in the right direction.


South Carolina ranks fifth in the nation in violent crime. While we must continue to develop ways to decrease our crime rate, we must also commit to properly equip and compensate those who place their lives in jeopardy every day to protect us.

I propose the following:

State Law Enforcement Division

Department of Public Safety


Last year the General Assembly made significant changes in our criminal justice system. I remain finn in my commitment to protect the law-abiding citizens of South Carolina. To that end, I propose the following:

Probation, Parole and Pardon Services

Department of Juvenile Justice


I am committed to working with the judiciary to expedite trials and alleviate backlog . I have discussed the needs of the judiciary on several occasions with Chief Justice Ernest Finney and will continue to work with him to meet the needs of the court system. I recommend $2,411,397 to fund nine new judge positions created last year by the General Assembly but funded only on a limited scale. I also recommend $1,259,217 to fund judges' travel, subsistence and office expense allowances. And I recommend the transfer of an Administrative Assistant II from the Attorney General's office to the Supreme Court.

Attorney General

The State Grand Jury plays a key role in cracking down on drug rings and dealers in South Carolina. With the loss of the Bureau of Justice Assistance Grant ($500,000) in September 1995, the Attorney General requests the state to continue its funding of the program.

Prosecution Coordination Commission

Governor's Office - Division of Victim Assistance


Department of Health and Human Services

The Medicaid program is a federal program that provides financial aid to states for payment to health care providers. Eligible individuals include cash assistance recipients, children, pregnant women, and the elderly. In FY 1995-96 approximately $25 million was funded with nonrecurring funds. We must continue this funding to maintain Medicaid program services. In addition:

Department of Social Services

Disabilities and Special Needs

Vocational Rehabilitation


Department of Natural Resources

Forestry Commission

Department of Agriculture

Clemson- PSA

Parks, Recreation and Tourism

This marks the fourth year of a five-year plan for the Department of Parks, Recreation and Tourism to reduce its general fund budget by $1 million through change in source of funds to the accommodations tax.


Budget and Control Board

Adjutant General

Labor, Licensing ant Regulation

Employee Pay/Employee Benefits


Should additional surplus funds become available, as has often been the case, I recommend funding the following items in the order in which they are listed:


Division of Motor Vehicles

Department of Mental Health

Department of Public Safety

Heritage Corridor

Archives and History

State Auditor's Office

Judicial Automation


Columbia Museum of Art

Department of Commerce

USC Law School

Youth Alcohol Treatment

Clemson PSA

800 MHz

Coastal Carolina-Humanities building


The Board of Economic Advisors' (BEA) FY 1996-97 Preliminary Revenue Forecast projects general fund revenue to be $4.419 billion. This is an increase of $317.2 million (above the adjusted base from the FY 1995-96 Appropriations Act and including adjustments). However, the Carnell-Felder appropriations limit sets aside $52.4 million in a recurring surplus; therefore, with the Carnell-Felder calculation applied and with a technical adjustment by the BEA, there is $264.4 million available in recurring revenue from revenue growth.

The BEA forecasts a growth rate in General Fund revenues of 4.2% over the revised estimate for FY 1995-96. The calculation of recurring funds available for expenditure is as follows:

FY 1996-97 BEA Preliminary Revenue Forecast:              

Less the Carnell-Felder set-aside (calculation in 
statute):  -$52,422,258
Revenue available for appropriation:                      


Revenue available for appropriation: $4,367,379,963 Less 1995-96 Appropriation Base after Governor's vetoes: -$4,106,881,762 Recurring funds available for appropriation: $260,498,201

Technical Enhancement/Adjustment to BEA estimate: $4,400,000

Recurring funds available for appropriation in 1996-97: $264,898,201

This budget uses the following sources of revenue:

The total funds available for appropriation over the recurring base is more than $595.6 million. More than half of these funds ($309.4 million) are technically nonrecurring. However, given the careful calculations of the BEA and the numerous "reserve" funds on hand to fend off any mid-year reductions, a substantial portion of these funds are, in reality, recurring funds.

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Specific Figures in Governor's Budget Proposal