S.C. House, Senate OK Small Business Tax Break

COLUMBIA, S.C. — South Carolina House and Senate budget negotiators agreed late Tuesday to phase in a tax cut for small business owners over three years, breaking a weeks-long stalemate on the issue that had blocked a budget compromise.

But the conference committee has yet to sign a budget deal. The leaders of the House and Senate budget-writing committees expect to hash out the details line-by-line Wednesday.

That guarantees that the fiscal year will start Sunday without a budget in place. However, the chambers expect to send Gov. Nikki Haley both a budget and a continuing resolution on Thursday.

The resolution will continue to fund government at current levels, bridging the gap until Haley issues her vetoes. By law, she has five days to do so, excluding Sunday and the holiday, meaning she could have until midnight July 5. When the Legislature comes back to deal with them depends on what line items she vetoes, committee members said.

Other parts agreed to in the $6.7 billion spending plan for state taxes include a 3 percent pay raise for most state employees, $33 million in long-deferred maintenance at public colleges statewide, and roughly $20 million for a Commerce fund for infrastructure that helps close economic development deals.

The proposal adds state law enforcement officers, while giving them a 5 percent pay raise, and provides 2 percent raises for public school teachers.

The tentative deal contains $300 million to fully fund the Charleston harbor dredging project, including reserving $120 million to cover the federal government's share if necessary.

It also includes $36 million for special needs students to cover a reduction in federal funds which serve as a penalty for not spending enough on disabled students during the economic downturn.

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