ATLANTA -- Winding up this year's session, the South Carolina legislature yesterday passed a $3.75 billion fiscal 1993 budget that includes funding to retire Hurricane Hugo bonds and to replenish the state's capital reserve fund.
But the lawmakers let die several other bills that would have changed the limits on the amount of debt that local governments could sell.
The budget, which does not rely on any new taxes, is over $200 million more than last year's budget of $3.54 billion.
Lawmakers worked out final budget levels after reaching agreement on a $35.7 million fee increase for out-of-state nuclear waste at South Carolina's disposal facility in Barnwall. The facility will now be kept open until the end of 1994, extending its life beyond a scheduled 1992 closure.
Included in the budget are funds to pay off the $33 million of general obligation debt sold to repair damage after Hurricane Hugo struck in 1989. In addition, the budget restores the state's capital reserve fund to $65.7 million and allots $38 million to the general fund reserve. The 1993 fiscal year begins July 1.
"This budget may look a lot bigger than the one we passed last year, but you have to keep in mind that pays back a lot of funds to get us out of hock," said Frank Fusco, director of research for the South Carolina House Ways and Means Committee.
The passage of the budget follows concerns about the state's finances from Standard & Poor's Corp., which in March placed the state's $837 million of AAA-rated general obligation debt on CreditWatch with negative implications. At the time, Standard & Poor's cited a trend of increasing budget and operating deficits in the past three years. So far this year, state budget officials have been forced to cut spending by $128 million.
Moody's Investor's Service rates the state at Aaa.
The session ended as lawmakers allowed several bills affecting municipal debt to expire in committee.
One proposed bill would have recategorized lease agreements sold by local governments to fund real estate purchases as general obligation debt. The legislation would have required most local issuers to obtain voter approval for such financings, greatly reducing their usefulness.
The bill died because of strong opposition from local government and school officials, who consider lease borrowings an essential tool, given the strong voter climate opposing the issuance of general obligation bonds.
Another bill, pushed by state Treasurer Grady L. Patterson, would have raised the amount of debt that local governments could have outstanding from the current 8% of assessed property valuation. One of the bills would have raised that limit to 12%, the other to 15%.
Lawmakers also failed to pass a bill pushed by Gov. Carroll Campbell that would have placed before voters a constitutional amendment to reorganize state government. The measure asked that state agencies be made directly answerable to the governor through a cabinet system comprising no more than 15 departments.
