DOA Legislation Dead This Year, Bill Conferees Say

June 27, 2013

Investigative Reports

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DeadRestructuring South Carolina state government will have to wait until next year, say two lawmakers on a committee assigned to work out differences on a key bill.

A scheduled House-Senate conference committee meeting Wednesday on a government-restructuring bill (S. 22) was postponed because of the lack of a quorum, according to Senate Judiciary Committee staff. The bill would move many of the current functions of the state Budget and Control Board (BCB) and Governor’s Office to a newly created Department of Administration (DOA) that would be under the governor’s control.

The legislation is sponsored by Sens. Vincent Sheheen, D-Kershaw, and Shane Massey, R-Edgefield, both of whom were appointed on June 4 to the six-member conference committee.

The next committee meeting is unknown. By late afternoon Wednesday, a meeting notice read, “Postponed to a later mutually agreeable time.”

“It’s obvious we’re not going to get something passed this year.” Massey told The Nerve when contacted Wednesday.

Massey told The Nerve that he believes the conference committee will work out an agreement this fall so that adoption of a conference committee report will be ready in January.

“We still have another year,” Massey said, noting this year is the first in a two-year legislative cycle.

House Speaker Pro Tempore Jay Lucas, R-Darlington and one of the House conferees on S. 22, told The Nerve Wednesday that the postponed meeting means a final bill won’t be ready for Gov. Nikki Haley’s consideration before the start of the 2013-14 fiscal year on Monday.

“I have a fair level of confidence those issues can be worked out,” Lucas said. “It would have been difficult to get a deal today.”

In other legislative matters this week, Haley issued 81 vetoes on Tuesday totaling about $94 million in planned state spending for next fiscal year. Her vetoes totaled less than one-half of 1 percent of the proposed total state budget of nearly $24.3 billion, which includes state, federal and “other” funds. The House was in session Wednesday, and the Senate will return today to address the vetoes.

Restructuring state government wasn’t a front-burner issue for Haley for most of this year’s legislative session. But it was a top priority in Haley’s first year in office in 2011 – so much so that she ordered lawmakers to return to Columbia after the end of the regular legislative session to pass a restructuring bill.

Then-Senate President Pro Tempore Glenn McConnell, now the state’s lieutenant governor, immediately appealed Haley’s order to the S.C. Supreme Court, which ruled in a 3-2 vote that the governor had over-stepped her authority.

The biggest issues to resolve in the latest restructuring bill are the purchasing of goods and services for state agencies, allowing deficits within state agencies, and responding to the massive cyber-security breach at the S.C. Department of Revenue, The Nerve previously reported.

Conferees made no progress on those issues in their second meeting last week, when lawmakers were in Columbia to finish work on the fiscal 2014 state budget.

The House version of S. 22 would put procurement under the proposed DOA; the Senate would give that authority to a newly-created “State Fiscal Accountability Authority” (SFAA). The SFAA would be comprised of the same members of the BCB’s governing board, made up of the governor, comptroller general, treasurer and chairmen of the House Ways and Means and Senate Finance committees.

S. 22 originally was referred to the Senate Judiciary Committee, but Senate Finance Chairman Hugh Leatherman, R-Florence and a BCB member, convinced his Senate colleagues to move the bill to his budget-writing committee in a deal reached during a secret executive session, The Nerve reported in February.

Lucas told The Nerve on Wednesday that the disagreement over who would authorize state agency deficits will be “the biggest issue to iron out.”

The House version of S. 22 would require the General Assembly to sign off on any state agency deficit. The Senate would give that power to a newly created “Executive Budget and Strategic Planning Office” if an agency deficit is less than $1 million and the Legislature is adjourned, while deficit amounts of $1 million and higher would have to be approved by the General Assembly.

Agency deficits would be covered with year-end surplus money in the state budget or from the state general or capital reserve funds, under both bill versions.

The other key outstanding issue is how the state will respond to last year’s massive cyber theft of personal financial information at the S.C. Department of Revenue. The Senate version of S. 22 would create a new information-security agency, which has been projected to cost more than $10 million, while the House has balked at that idea.

During last week’s conference committee meeting, Lucas described the information-security agency as a “tough sell” in the House.

Efforts Wednesday to reach committee members Sheheen; Sen. Thomas Alexander, R-Oconee and the committee chairman; and Reps. Greg Delleney, R-Chester, and Harry Ott, D-Calhoun, were unsuccessful.