Haley's Budget Cuts Taxes, Education

Gov. Nikki Haley released her first executive budget Friday and it includes income tax cuts for individuals and phasing out the corporate income tax, but no pay raises for state employees for a fourth year.

Haley's plan would also reduce by $76 million a key funding stream for public schools that pays teachers' salaries. She says state employees deserve pay raises but says it's more important to first strengthen the state agencies in which they work.

Her plan would spend $140 million to begin a four-year phase-out of the state's corporate income tax and give most taxpayers an $84 reduction in their state income taxes, reducing the top tax bracket from 7 percent to 3.5 percent.

"So anyone that makes $5,600 or more in income, state income, will now have that 3-and-a-half percent," she says. "Huge middle class tax bracket but, more than anything, it's flatter; it's fairer."

State Senate Majority Leader John Land, D-Manning, says, "Under the leadership of a Republican-controlled General Assembly, we have consistently witnessed deep cuts in education and our state employees have not received a pay increase in four years. We are finally in a financial position that allows us to invest more dollars in our classrooms, reward our state employees; however, our governor refused to do so.”

While her plan would cut that funding stream for teachers' salaries, it includes an additional $10 million for state charter schools.

Most agencies would get about the same amount they got last year. However, the State Law Enforcement Division gets the biggest increase. It was sanctioned by the FBI last year for not maintaining its criminal database, which was due to outdated equipment and budget cuts. SLED also has a backlog of about 900 cases in its DNA lab and fingerprint sections.

"What this will allow us to do is to get those violent crime cases out of our lab much quicker; be able to hopefully identify violent offenders and get them off the street," says SLED Chief Mark Keel.

Gov. Haley's budget also includes money to hire 40 new state troopers.

Improving roads and bridges is a top priority for many drivers across the state. The governor is proposing that counties take back some of their local roads that are now maintained by the state. Her budget includes $75 million in one-time money that the counties would get to buy back those roads, with the money going to either pave or maintain them.

"The local districts will want to get these roads back because they have to listen to their people every day. They know where the potholes are. They know where the problems are," she says. "And I think it only makes sense to allow communities to take care of community roads."

Her budget would save money by getting rid of the state-run school bus system. Local school districts would take over, with each deciding whether it wanted to buy its buses or privatize its system.

Haley says that when she was in the House, governors' budgets were often ignored once they hit lawmakers' desks. But she says she hopes lawmakers will actually use this plan as a working document.

"I think we're like-minded," she says of lawmakers. "They do want tax relief. Do they want the tax relief the way I want? That's a conversation we're going to have. They do want to see us start to deal with highway transportation. Are they going to agree with this? I don't know."