- Associated Press - Tuesday, May 12, 2015

COLUMBIA, S.C. (AP) - The South Carolina Senate killed a $237 million borrowing package Tuesday on a technicality, but efforts to borrow for college construction and workforce training remain alive.

A ruling by GOP Lt. Gov. Henry McMaster killed the portion of a spending bill that would have borrowed $15 million for National Guard armories and split the rest between the state’s 33 public colleges and technical schools.

McMaster had agreed with Judiciary Chairman Larry Martin’s argument that the borrowing was not sufficiently related to the rest of the bill. The Senate then refused, by a vote of 14-31, to override McMaster’s ruling. Three Democrats joined the entire GOP caucus.

The Senate then gave tentative approval to the rest of the capital reserve bill, which allocates $85 million the state is collecting this fiscal year above advisers’ earlier expectations. That spending includes $17 million for new school buses and $2.2 million to run the state’s 2016 presidential primaries.

The move seemed to hand Gov. Nikki Haley a victory. On social media and in speeches across the state, she’s blasted all Republican legislators willing to support any such borrowing package. Her opposition helped defeat a larger package by the House’s GOP leaders in March.

Senate President Pro Tem Hugh Leatherman immediately revived the effort.

“It hit a little road block. It will be back,” said Leatherman, R-Florence.

Shortly after that, the Senate Finance Committee - which Leatherman chairs - approved the $236.7 million proposal as a stand-alone measure. By a 14-4 vote, the committee added the language onto a skeleton bill Leatherman introduced last month. It’s seems highly unlikely to pass this year, with just 11 days left in the session.

But senators predict it could stand a good chance next year. The Legislature hasn’t passed such a borrowing bill in 16 years. Because that debt is being paid off, neither of the chambers’ bond proposals would have raised the state’s debt service costs.

“I have no problem with a bond bill, but it must be separate and apart” from the capital reserve bill, said Martin, R-Pickens. He doubted a bond package could survive a legal challenge anyway if it passed as part of the bill that allocates one-time, surplus money.

The Senate’s 2015-16 budget proposal, approved last week, includes a clause that creates a study committee to determine borrowing needs. Part of Haley’s criticism of the chambers’ bonding packages has been over their committee approval process.

Senate Majority Leader Harvey Peeler called his amendment a more reasoned approach. If the House agrees to it, the committee - made up of six legislators and three appointees of Gov. Nikki Haley - would report their findings by year’s end.

“I love that approach,” Martin said.

Proponents of the bonding package have said the state needs to borrow while interest rates remain near historic lows. Sen. Joel Lourie, D-Columbia, suggested senators look into the cost of borrowing at today’s rates versus what it could cost taxpayers later.

In neighboring North Carolina, GOP Gov. Pat McCrory has made similar arguments in advocating his idea to borrow up to $3 billion - with roughly half for government infrastructure and half for roadwork - saying the state can’t afford to possibly miss low interest rates.

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