S.C. House to Vote on Local Government Fund

By Paul Gable

The S.C. House will vote on H.3374 this week, a bill that would severely restrict revenue for the local government fund.

State law, passed in 1991, requires the S.C. General Assembly to return 4.5% of last year’s state general fund revenue to local governments.

However, in many budget years, the S.C. General Assembly has passed a one-year exception to the law allowing it to send back to local governments less than the mandated 4.5%.

H.3374 would do away with the need for one-year exceptions by freezing funding of the LGF for two years at last year’s amount, then, would allow a 2% rise in LGF funding in any year that state revenues grow by 4% or more.

The difference is considerable. A fully funded LGF, in accordance with current state law, would return an additional $70 million to local governments in the budget now being considered in the S.C. House.

If H.3374 passes, that money would be lost to local governments, who are already severely restricted in their ability to raise revenue since the millage cap imposed by Act 388 was passed in 2006.

This is just another case where the lawmakers in Columbia want more money for themselves at the expense of local governments, a strong tradition in South Carolina.

And, they get away with it most of the time because most voters pay little attention to what is really happening in Columbia.

With H.3374 having considerable momentum in the S.C. House and the current desire of that same body to transfer maintenance costs for nearly 50% of the state road network to the counties, it won’t be long before the squeeze is on at the local government level to provide basic services to the citizens.