State House News: January 14th – 18th
January 18, 2019
This week, the Senate focused on committee work and met in perfunctory session only to take up unanimous consent local and uncontested matters. The Senate will return to regular statewide session on Tuesday, Jan. 22 at 2PM.
Governor, Legislature Asks for Education Funding Options
After focusing on education reforms in his inauguration speech, Gov. Henry McMaster (R) formally asked the state’s Revenue and Fiscal Affairs to provide a report on the effects of a variety of education reform proposals this week. The official request was co-signed by Senate President Harvey Peeler (R-Cherokee) and Speaker Jay Lucas (R-Darlington), signaling the start of what is likely a two-year effort to overhaul education policy in the state, with the legislature’s current efforts to reform tax policy and the state pension plan also working in tandem to improve education outcomes.
Legislators Begin Tax Reform Work
The House Tax Policy Review Committee met for the first time in 2019 on Friday to outline goals for the legislative session. Chairman Tommy Pope (R-York) stated that the next meeting will be a full working session on income tax, as the committee intends to present income tax reform recommendations to the Ways and Means Committee before work on the budget begins. He also noted that the next item for discussion by the committee is sales tax and the state’s sales tax exemption framework. The committee has extensively discussed the need for tax reform, specifically sales tax reform, over the last two years, but has not yet made any formal recommendations.
Rep. Alan Clemmons (R-Horry), who is also a member of the Ways and Means Committee, told committee members that income tax reform is a “top priority” for the Ways and Means Committee’s new leadership, Chairman Murrell Smith (R-Sumter). The goal is to create a more fair income tax structure by broadening the tax base, and Rep. Clemmons stated that Ways and Means members are “anxious to have a bill to go through.”
The Senate’s special Finance subcommittee heard presentations from tax experts this week; the House committee previously heard the presentations in the fall.
State Pension Outperformed Expected Return
As the legislature looks to further reform and stabilize the state’s pension system, the Retirement System Investment Commission (RSIC) and Public Employee Benefit Authority (PEBA) both reported to legislators this week that the fund is doing well. RSIC reported a fund increase from a higher expected rate of return on the investments. Pension reform legislation in 2017 lowered the assumed rate of return to 7.25 percent, and the fund experienced a 7.82 percent rate of return for the current year. Both RSIC and PEBA leadership praised the pension reform legislation, stating that the fund was certainly more stable as a result.
Upcoming debate in the legislature will focus on whether or not to close the current defined benefit plan to new state employees, only offering new hires a 401(k) style plan. Peggy Boykin, PEBA Executive Director, noted that PEBA currently offers a 401(k) style plan to state employees; however, only 17 percent choose the plan over the defined benefit option. Boykin also assured members that her staff would perform an analysis of the fund to predict the effects of a teacher salary increase so they may be prepared for the upcoming education reform debates.
Medical Marijuana Bill Reintroduced
Longtime medical marijuana advocate Sen. Tom Davis (R-Beaufort) announced the introduction of the SC Compassionate Care Act (S. 366) this week. The bill, which allows limited medicinal use of cannabis under certain circumstances, closely resembled the language Senate Medical Affairs Committee approved last year after lengthy emotional testimony and debate. Approval by Medical Affairs in 2018 was a significant win for advocates of medicinal use of cannabis, despite the bill’s inability to receive approval before the crossover deadline.
The bill requires a written certification signed by a physician stating that the patient has been diagnosed with a debilitating medical condition. The qualifying patient must then register the state and acquire an identification card in order to obtain and possess marijuana for medicinal purposes. The bill allows qualifying patients to possess up to 2 ounces of vaporized oil, gel caps, patches, edibles, or topical creams and prohibits smoking of cannabis. Rep. Peter McCoy (R-Charleston) also introduced the House companion bill H. 3660 this week.
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