♪ Welcome to this Week in South Carolina I'm Gavin Jackson.

This week I'm talking with House Ways and Means Committee Chairman Bruce Bannister.

Following the passage of his committee's $14.6 billion state budget that now heads to the House floor in early March.

I also catch up with House Education Committee Chairwoman Shannon Erickson on the K through 12 School Choice Bill that sends millions of dollars in public funding to thousands of families for private school education.

Before we speak with the chairwoman, take a look at this segment on the Bill, which was changed from the Senate's version.

Legislation for school choice funding has been on a fast track this legislative session, and comes after the state Supreme Court overruled the last law, which used public dollars to fund private school costs.

The latest version started in the Senate the first week of session in January, where Senate Education Committee Chairman Greg Hembree's, S-62, used education lottery funds typically used for higher education scholarships to fund K through 12 vouchers.

>> About 30 private colleges in South Carolina that access those funds.

So it's not, the court says that's different.

That's not a problem in Eidson.

And the Eidson court says you can do that because that money's not part of general tax revenue.

That's money that was not appropriated from the taxpayers.

It's different.

It's not public funds.

Under the under the terms or under the definition of the Constitution.

So... Gavin> The Bill passed the Senate and was then amended in the House Education and Public Works Committee on February 19th to a near similar version that was passed previously using general fund dollars, but now includes a trustee to oversee the money.

That version was sent to the House floor for debate that took place on Wednesday.

>> The reason I'm up here is because next year we're probably going to be dealing with this.

Two years from now, we're probably going to be dealing with this.

I've been here 11 years and we've been dealing with it for seven or eight of them.

We're going to be here because I hope the justices will protect the branch and say, no, you're not going to play political games on this.

We are not even going to hear this bill.

And that should be even if you're the minority opinion, they are going to look at this decision from four months ago.

And to me, they are bound to say, even if you disagree, to say the court has already ruled because of that legal doctrine....

The thought process...I guess, why did we not go with the Senate version of taking it out of the lottery?

Rep. Shannon Erickson> That answer's pretty simple.

That's a novel concept, Mr. Collins.

We're answering the question that Judge Kittredge cited in his dissenting opinion, which cited that if he were to sit as one of the majority opinion folks and look at the bill and look at their reasoning on the part of the bill that was not as tight and clear as it should be, if he were to consider... their points, would be that the trustee was not the interaction designating the funds to the student.

We gave that ability to the department, and his suggestion in his dissenting opinion was that the trustee should have those duties, which we have done in this clean up bill.

Gavin> The amended bill passed 79 to 38, with five Republicans voting against the measure, which now returns to the Senate.

Joining me now is House Education Committee Chairwoman Shannon Erickson.

Chairwoman, thanks for joining us.

Rep. Erickson> Absolutely.

Thank you for having me.

Gavin> So school choice has been a top priority of yours in the Republican caucus for years.

We've been down this road many times over the years.

But tell us about this new bill that y'all amended from the Senate and how it will work.

Rep. Erickson> Well, there are a few key differences.

The first is the Senate solved the problem, or their attempt to solve the problem is to change the funding stream of, of the bill.

When we got the decision from, our judicial branch, there was a majority opinion and minority opinion, and I took a lot of time, a lot of stakeholders took a lot of time, House, Senate, Governor's office, Department of Education, we have all looked over at those opinions, and worked a lot of time in the off session.

And what we came up with was the trustee piece needed to be tightened up.

Close to the beginning of this legislative session, the Senate decided to change routes and go toward the funding formula piece, and that's the largest difference between the two bills.

The House doesn't assign a funding formula at all or a funding stream at all.

It lets the budget writers, Ways and Means and, and Senate Finance come up with where the money comes from and how that's appropriated.

That's...you can tell I used to serve on Ways and Means, probably.

I believe in that process.

It's very heavily vetted.

We have... thanks to our forefathers, the requirement of a balanced budget every year.

That's the appropriate way to go about where those funds go.

Our job in the House we saw was to fine tune the trustee part on how the funding money flowed to the students, to the actual eligible child, not to any type of programs, or schools or tutor or anything.

The actual child is the eligible South Carolina taxpayer, very similar to the way we give higher ed scholarships and our 4-K scholarships.

Gavin> So they get $6,000, 10,000 students getting $6,000 that they can use towards tuition- Rep. Erickson> -towards tuition, books, computers, tutoring, even transportation.

Gavin> When you say that then but when, so having a trustee oversee this money, how is that different than saying I mean, that's still public money.

How is that trustee make it less public?

Has that beat the Supreme Court decision?

Rep. Erickson> The, the Kittredge part of it said that we left too many details of the trustees decision on eligible children and allocating funds to the department.

Gavin> Okay.

>> And that was really where it hinged.

The department is a public entity.

A trustee is looking after a specific eligible child.

Gavin> And, yeah...you know, Rep. Erickson> And that, takes it to the, to the person in the state that is eligible for funding for their public education.

That's, I think, where words are twisted too.

We do have the responsibility of education, but it's educating the public, not a particular program.

That's where I think the situation needs to go.

Gavin> So then do you think that this will pass the State Supreme Court, should it go back, like it's likely, I think, to go back.

And I mean, if not, why not maybe just go with what the Senate did with those lottery funds or do tax credits or do a constitutional amendment to change the Constitution, which says don't use public dollars for private education?

Rep. Erickson> I mean, I think those are all options.

What our focus has been on the House side is to make the main thing, the main thing.

And each time that we've taken this bill and had it considered, we have fine tuned the piece that we were told by the courts or a system that wasn't working to introduce a different funding stream adds in the legal term a novel issue, something that has not yet been decided and not been heard.

And I've searched.

There's no record of those lottery funds ever being cleared by the courts as not being public funds.

I personally think they're probably public funds when they go into our, our treasury.

And so then we would have to start all over with whatever that issue was.

that was named before because we brought in something brand new to discuss.

Gavin> You really want to make sure that if this goes back to the Supreme Court, either if it works or it doesn't work, at least this... Rep. Erickson> I'll have the answer and this one will be done.

Gavin> Gotcha.

Rep. Erickson> That's the goal.

Gavin> So that being said, I mean, is that likely to happen in your opinion that this goes back to the courts?

Rep. Erickson> Oh, I fully expect someone to challenge it.

The NEA challenged it last time and I expect that, that happens again.

And that's the way the system works.

I mean, we actually learn through the process.

That's why we have the different branches of government.

Gavin> What is the need for school choice, in your opinion?

Why do we need to send this money to other schools?

Rep. Erickson> We've got so many children that don't fit into the traditional public classroom.

I had two children raised in the same household.

Both learned differently.

Both had different needs.

I was blessed that that my husband and I could work and figure out a way to make that happen.

But there are families in South Carolina that do not have that option and again, if I, if I read the constitution of guaranteeing the public education, not guaranteeing public education, get the difference, that... all children should have the best fit for their education model.

I mean, as a teacher, I can tell you we look for the least restrictive environment, the best place to accommodate those children's needs.

And that shouldn't happen with a child that just has a specific individual education plan an IEP.

It should happen for all children if we can accommodate those.

And the choices are truly the parent on where they need to decide what works for their child.

I'm a former public school teacher.

I am very supportive of our public school system.

I believe we have great public schools, but some of them don't fit the children that are there to fit.

And, I believe that we've got to be more thoughtful about how we fit what we're trying to put children into.

It's, you know, square pegs and, and round holes.

Gavin> Do you think this creates winners or losers though, that being said?

Rep. Erickson> Well, the version of the House actually fixes the problem that the Senate only addressed the poverty issue.

We actually included children who are in foster care and under DSS care at the time.

Those children are vulnerable and they need the best environment we can give them.

It addresses, children who are active duty military dependents.

Those children come in and quite often they don't have any other school choice options because the windows closed or things like that.

This would give them an opportunity to be in a different place.

And we've raised the level of poverty through the system of growth, and the window there is important because those children, the ones who are in the program, their siblings, DSS, poverty level and active duty military dependents are all the first windows to get filled.

So, as the General Assembly appropriates funds, those will be the children who get those services first.

Gavin> And we have about three minutes left, ...if this is going back to the Senate, obviously, they're not going agree with your term.

So it's going to be a conference committee, obviously.

Do you want to see the conference committee move as fast as possible to get this off to the Supreme Court?

Rep. Erickson> I'm not going to say Gavin> Well you know... obviously they won't.

>> They have the option.

And it's a Senate bill.

If I go back to last session, I actually accepted what they sent to us, even though I didn't consider it perfect.

I wanted the answer to the question, and I felt like it was more important to get the answer to the question than it was to pick over details.

I'm a little hopeful they might do that, but if it's conference committee, you know what, Senator Robert and I are going to have a good track record of working together.

Sorry, Robert?

Oh, jeez.

Oh, Hembree.

Sorry about that.

Sorry, sorry, sorry to my Greg friends...Hembree.

Gavin> But, chairwoman, when we look at other states that have passed this, including Iowa.

We saw data from the Iowa Department of Education shows in the first two years since they passed Iowa's voucher bill, 36 new private schools opened, 16 public schools closed.

The program is now costing $360 million.

Are there any assurances that we won't see this, this program right now swell to that level?

I mean, we're talking about $30 million now.

We're at 45 million, 60, 90.

I mean, how do you see this going?

Rep. Erickson> Most states run about 10% of their population wanting a school choice option.

And that's really the, the kind of the, the baseline of what school choice is, because most families choose the school down the road.

That's going to be their traditional public school.

And no one, no one is insinuating that's not a good choice.

What we're saying is there are other places that children can learn, and we want to make those available to them.

The General Assembly will set the budget.

I do not foresee the General Assembly getting so far ahead of their skis that they can't control what the growth is on this, on this item.

We do it with everything else in the budget and none of the funding, not $1 from the funding that we're using on this program has come from EIA or education dollars.

Those have, have maintained, in fact, our public education dollars have been growing.

We have really been dedicated to raising teacher salaries, specifically our starter teacher salaries.

And that's really important to us.

Gavin> We have 15 seconds.

But are you worried about federal funding at this point when we hear about dismantling the U.S. Department of Education?

Rep. Erickson> I'm watching it, but I'm not going.

I'm not going to make any rash judgments.

I hope that we'll see some things like teacher scholarships maintained.

Gavin> Okay.

House Education Committee Chairwoman, Shannon Erickson, thank you so much.

Rep. Erickson> Absolutely.

Thank you.

Gavin> Joining me now to discuss the budget is House Ways and Means Committee Chairman Bruce Bannister.

Chairman Bannister, welcome back.

Rep. Bannister> Thank you.

Thank you.

I appreciate the invitation.

Gavin> Chairman, your, your committee just approved it's $14.6 billion state funding plan that covers operating costs for state agencies, higher education, etc.

and much more.

This will go to the full House the week of March 10th.

And then we'll head over the Senate, which will make their own changes and then send it back and all that fun stuff happens there.

But tell me about some of the big highlights that you guys, got in this budget, this $14.6 billion budget, the third one that you've overseen as chairman.

Rep. Bannister> Thank you.

Yeah.

So it is my third one.

This, this budget cycle is probably the closest and best we've worked with the governor's office in the Senate.

We've really had a lot of communication back and forth between the, the, the different stakeholders about what's important and what the priorities should be.

We take the idea that you make, responsible investments in South Carolina seriously.

And so that's, that's what you'll see in the budget, things like SROs, school resource officers.

We're going to make sure, and the way it has been working is we, we believe we have them all covered and there's new schools.

And so we're continuing to fund, school resource officers in every school.

Gavin> A big priority of the governor, Rep. Bannister> Big priority of the governor's Same with teacher pay.

We're going to hit the the governor's goal of $50,000 starting salary for teachers by the time he leaves office.

And we're on pace to do that.

Another big investment this year, I think the starting salary will be, 48,500.

So we'll be within striking distance of that.

And we've committed to the teachers and the governor that we're going to make that happen.

The Senate's big on infrastructure.

So we've got a pretty big investment in bridges continuing to fund the DOT.

And then, corrections.

We are continuing to try to keep the contraband out of the, the, out of the jails.

So cell phones and the different things that they have to go look all the time, to get out.

We're trying to we're trying to get those things out.

So we made a big investment in cell phone interdiction.

And then we did a study over the last couple of years for state employees.

And there were some recommendations to get really some of our lowest paid state employees up to a just a basic level that would be competitive with what they can make in the private sector.

And so we're, we're moving the pay bands and making an investment in our state employees to get them to that level.

As long as, as well as a cost of living increase for some of the higher paid, state employees.

So kind of an investing in South Carolina, we also set aside some money for tax cuts.

That continues to be a priority in the House to say, hey, we're having these great budget year.

We got $650 million in new recurring revenue.

We've got a billion too in one time money that's available.

And a large portion of the Republican caucus wants to see some of that go back to the taxpayers.

It's where it came from.

It's their money.

And it's okay for us to reduce that burden on the everyday citizen.

So... what that's going to look like right now, we've committed to go to 6%.

We're at 6.2 percent We'll be at 6 percent.

Gavin> For the income tax >> For the income tax.

Yes, sir.

If it works, we're going to look at, a kind of an overhaul the way we collect income taxes.

There's 44% of the people in South Carolina who do not pay any income tax to South Carolina.

And we're looking at how to include them in the, in the income tax world so that everybody pays something into the income tax.

If we do that, we think we can get a really low rate, maybe under 4%, where that, that burden would be shared, but it would also not be maybe a substantially less of a burden to the regular South Carolinians Gavin> Then also bringing more money to the state as well, or get back equal?

Rep. Bannister> So, ideally we would, it would bring in $200 million less, <Okay> And it would reduce the rate- Gavin>-but it would even to Rep. Bannister> to below 4 percent.

>> Okay.

Rep. Bannister> It would just have a broader section of people paying.

Gavin> So, when we talk about this and you talk about these strong revenues, I think the State of Commerce like you just mentioned, amped up how much money y'all can use to the tune of $1.9 Billion with that, one time dollars in the recurring dollars.

Do you have any concerns about how the economy is doing?

Their outlook, Well, I mean, when you see what the, BEA gave you all, I mean, that's that's pretty remarkable to see $1.9 Billion extra, but do you have any caution when you see that money?

Rep. Bannister> So we are in constant communication with the economists on, on the BEA and talking to them about what they're seeing and the trends.

Everyone anticipates a slowdown, and we have asked them to be very conservative in how they authorize us to spend money, because we don't want to be in a position where they said, hey, you have 650 million new recurring dollars, and then we don't.

We don't want to make any promises we can't keep or that we have to break when the economy goes down.

So they're, they have been very conservative thus far, which is one of the reasons we have a large one time money available to non-recurring dollars is basically money we didn't spend last year.

So we didn't know we would have it.

We didn't spend it, and now we have it because it's from last year carried forward.

So when we look at that, we feel like that's a good cushion.

And it makes us more confident that the BEA is being conservative and making good projections of where it will be.

Gavin> Yeah.

And that a lot of that money to that $1.2 Billion, one time money, like you said, that's a lot for capital investment, deferred maintenance, things like that, but everyone's always competing for those recurring dollars.

And when we talk about that, we're talking about, the teacher pay increases that you mentioned earlier.

The governor wants $50,000 for the starting teacher pay.

How come not just goes to the full 50?

I know you're saying you're on track.

You're doing a lot of incremental stuff as you have you been doing this as chairman?

But why not just go for $50,000 for the starting teacher pay?

Rep. Bannister> So it's about a $100 million expense out of the recurring budget at... To go to the full 50 would be closer to 200 million.

If you, if you look at the pot of 600 million in recurring dollars and you want to do a tax cut, and then you do 200 million for the teacher pay, then you do sort of tighten up what you're, what's available in the recurring pot to meet those other needs.

100 million for the state employee health insurance, another 100 million for our Medicaid match.

So all of a sudden you have no recurring dollars for anyone else.

Not that, not that we don't want to get there.

and at the end of the budget process, we may be there.

And that, you know, this is the very beginning, and it's early in the projection world.

So we'll find out more about what to expect in the budget as we get closer to the end of a session.

So really the, the H1 is what we call it the house... the first version of the House budget.

We are at the very beginning of the game of what the budget's going to look like.

The Senate will take ours.

They will change everything.

Gavin> Yeah.

Rep. Bannister> And then, they'll send it back and we'll have what's H2 what's the second version of the House budget.

So things like that.

Like if we if there was enough recurring revenue to get that teacher pay to 50,000, we would do that.

But we're, we're also very much we set a plan to be at 50,000 when the governor in his last year.

We are on track to do that.

And while it, it'd be nice to go ahead and get it done, I'm not sure the caucus would give up the tax cuts for the citizens in exchange for that.

So it's really a balance.

What we're doing is balancing those interest, keeping our promises, but we don't have to speed it up to break other promises.

Gavin> And when we talk about education, we also look at the education, voucher Bill that just got passed through the House, was passed through the Senate too the K through 12 spending there.

That would provide 10,000 students with about $6,000 in funding for the next school year.

And then that would go to 15,000 students to $6,000 for the year after that, that breaks down to 60 million to $90 million.

When we look at that, and that's, of course, if the State Supreme Court upholds that bill.

<Correct!> >> That law, where does that money come from?

Does it come from other priorities?

How do you find 60, $90 million in the budget?

Rep. Bannister> So we've, we've set aside $45 million in our budget this year.

<Okay.> >> So it's there.

It's part of that new money that we've set aside and said, hey, this is something we think is important.

The Senate funded it out of the lottery proceeds.

So they did 90 million, but they did basically all the lottery proceeds, would go into that.

So we're working through where the money comes from, but it will come out of the general fund.

It'll be a budget expense.

Gavin> Does it take any money already allocated for public education or going towards public education?

Rep. Bannister>No.

The Publie Education Budget will go up again.

And we're... we're going to get there on the teacher pay.

We're funding the other things that the school needs.

So they'll have what they had last year.

They'll have additional new dollars this year.

And the, the voucher money will come from another part of the budget.

Gavin> So when we look at the Senate plan, they were talking about lottery funds, which obviously go to scholarships and higher education.

And now we're talking about public funds, going from the general fund.

Do you think there's another way to do this when it comes to preferred way of funding vouchers?

I mean, what about tax credits?

Did you have anything that you preferred over any other plan?

Rep. Bannister> So, the caucus is committed to school choice.

And this is the way that, Ellen Weaver and the caucus believes is the best way to encourage parents to be engaged in their, their children's educational choice.

There are lots of different ways to do it.

You could do it 100 different ways.

This is just the path that we're looking to see if the Supreme Court approves it and this is a viable option, then it's a good way to do it.

Gavin> Chairman, we have about three minutes left and we already talked a little bit about tax relief, but, I want to ask you more when it comes to what people ask you, maybe when it comes to, hey, can we get rid of the income tax in the state?

We're talking about getting down to 6% for the income tax, possibly lower than that, depending on what we see.

But what do you tell people when they say, hey, why don't we just get rid of the income tax and just switch that out to something else?

Rep. Bannister> So, most of the folks who want to go to zero don't have a plan.

They're not willing to go to 13 cent sales tax.

They don't want to tax electricity or services.

They want to keep it just like it is and cut what is in essence, $9 billion out of the budget.

The ones who say let's go to zero also don't have really a, a plan of what they would cut.

I mean, you would have to... defund, a whole lot of things.

I think they would consider pretty decent programs.

Like the DOT.

We'd have to defund schools.

You'd have to defund law enforcement.

Gavin> Just a couple.

Rep. Bannister> Yeah.

I mean, you got a $14 billion budget, you're going to take nine billion out of it.

You almost can't have anything... you could maybe have Medicaid.

That would be all you had left.

So what I hear a lot of people.

want the, the headline of getting rid of it or going to 2 percent, they haven't really looked at the numbers to see how to get there.

Gavin> Sure.

>> But I'll tell you if I can figure out how to do it, we would rather have zero income tax.

So that would be a great place to get to.

And if we can get below four and then we can figure out how to get from four to three to two, at a 2 percent income tax, I think you would, that would not be much of a burden on the citizenry.

And it would be a super low rate, probably at that point, you could look at your income tax and figure out a way to do away with it, Gavin> And that's a discussion for another time.

Yeah, for sure.

Rep. Bannister> Yeah.

It's a very complicated issue.

Gavin> Yeah.

It's easier said than done for sure.

But when we look at, these strong budget revenues coming into our growing state, the surpluses, do you feel that the state is catching up to maybe some deferred maintenance, all these other needs?

I mean, agency needs, when you have extra money to be thrown around?

I mean, do you feel like we're actually finally getting caught up, moved to a good place as we are a growing state at this point?

Rep. Bannister> Yes.

I think we've made a lot of great moves in terms of deferred maintenance and the way we manage our buildings.

I think, we've sort of acknowledged that state owned buildings aren't really we're not that good at it.

And it's better for us to lease buildings from private owners who take care of them and do that deferred maintenance and budget it and make those, make those investments in their property as opposed to ours.

And if they don't, then we can move, and we don't lose any by doing that.

We've also, you know, our roads had been so neglected for so long, I feel like we're catching up on our, our interstate system and our bridge system.

And there's a 20 year plan in place where every road would be upgraded and repaved, and we'd kind of get back to where things were okay, as opposed to terrible.

<Yeah.> >> And the DOT's working really hard.

They, they're stretched thin in terms of even if you gave them another $200 million, there's so much work going on right now, they'd almost have trouble deploying it in the different counties and the different projects that are there.

So.

Gavin> Sure, Rep. Bannister> I feel like we are we are addressing some of those old legacy problems, and having the budget surpluses have been a great advantage.

Gavin> Chairman with less than 30 seconds, what do you make of these federal attempts to freeze funding coming down from the federal government?

We're talking about DOT.

We're talking about education.

How concerned are you about these moves up there in Washington?

And what are you hearing, maybe from agency directors about this?

Rep. Bannister> So South Carolina, while we have a very large federal budget coming here.

We are also telling our agencies to get ready for that.

Tell us what your plans are.

Start looking at how you're going to manage it, if the federal funds either stop coming or are reduced significantly, and I think we'll be ready for it if it happens.

Gavin> Gotcha.

That's House Ways and Means Committee Chairman Bruce Bannister, thank you so much for joining us.

<Yes, sir> And that's it for us this week for South Carolina ETV, I'm Gavin Jackson.

Be well, South Carolina.

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