This week's South Carolina House passage of H. 3374, which aims to rewrite the current statutory formula for the Local Government Fund (LGF), shifts the spotlight to the Senate.
If adopted by the full General Assembly, the change would take effect July 1, 2016, and would contain a two-year freeze in the LGF funding level.
The South Carolina Senate has proposed its own legislation in the form of S. 473, which would provide a three-year phase-in period to return to the current statutory formula funding level, in a position that has been adopted by the South Carolina Association of Counties (SCAC) as the preferred approach to ongoing LGF funding.
“It appears the Senate Finance Committee will schedule H. 3374 for a hearing and consider that bill, and possibly S. 473, soon,” the SCAC said.
Concerns surround the idea of a “now or never” scenario for the LGF formula that could result from the current legislation.
“If the General Assembly adopts a change to the LGF formula, they will almost assuredly not consider the subject again,” the SCAC said.
If passed, H. 3374 would make the LGF subject to mid-year budget cuts below the previous year’s funding level and would rewrite the current LGF funding formula, which includes 4.5 percent of the state general fund for the most recently completed fiscal year. The SCAC fears that if H. 3374 passes, less revenue will be available through the LGF, which would put greater pressure on local budgets and possibly result in service cuts or tax increases.