Although the legislative session has ended for the year, one item remains to be resolved – adoption of the state budget. The budget Conference Committee met this week following the news of additional revenue being added to the budget estimate. The General Assembly is expected to meet next Wednesday to finalize the budget. Numerous acts have been signed into law by the governor.
The Board of Economic Advisors (BEA) met on Tuesday and raised the budget estimate for both the current fiscal year and next year based on income and employment growth, as total General Fund revenue for the current fiscal year is running $772 million over the estimate. As a result, the Budget Conference Committee will have an additional $377 million in new recurring revenue and an additional $669 million in one-time revenue to appropriate in the FY26 budget. With the additional revenue, the $14.4 billion FY26 General Fund budget will now include over $1 billion in “new” recurring revenue – before backing out the mandated homestead exemption, income tax reduction and reserve fund contributions. The budget surplus, one-time funds used primarily for capital projects, is now over $2 billion. Chief Economist Frank Rainwater noted that the state is “growing strong, but we do expect a flat year next year,” noting that tariff concerns may be distorting some of the economic data, but a slowdown is still expected in the short run. The growth in the FY 26 revenue estimate over the base budget is sufficient to enact the next reduction in the top marginal individual income tax rate for tax year 2025.
The BEA is statutorily charged to provide the General Assembly with the official revenue estimate for lawmakers to draft the annual state budget. The forecast can be viewed here.
With the legislative session adjourned for the year, just one item remains to be resolved before lawmakers go home for the summer – the adoption of the Conference Report on the FY25-26 General Appropriations Act, H. 4025. On Wednesday afternoon, the Budget conference committee adopted the Conference Report.
The Senate budget conferees are Sen. Harvey Peeler (R-Gaffney), Sen. Darrell Jackson (D-Richland) and Sen. Thomas Alexander (R-Oconee). House conferees are Rep. Bruce Bannister (R-Greenville), Rep. Lee Hewitt (R-Georgetown) and Rep. Leon Stavrinakis (D-Charleston).
Many of the larger budget items, like tax relief and teacher and state employee pay raises, have already been agreed to. The General Assembly is expected to return to Columbia next Wednesday, May 28, to adopt the Conference Report. It will then go to the governor, where he may exercise his veto authority.
The Senate budget spreadsheet can be found here.
The House budget spreadsheet can be found here.
Individual state agency budget requests can be found here
The following have recently been signed into law by Governor Henry McMaster:
- H. 3276 Enacts the “South Carolina Hands-Free and Distracted Driving Act,” making it unlawful to hold a cell phone while driving and creates the offense of distracted driving. Under the proposal, drivers caught holding a cellphone, either in their hand or in their lap, would be fined $100 on the first offense. Each additional violation in a three-year span would cost $200 and add two points to a driver’s license. Hands-free phone calls and voice-to-text messaging are still legal. The act was signed into law on May 12 and takes effect on September 1, 2025.
- H. 3430 Tort Reform – reforms state rules for personal injury lawsuits, known as joint and several liability, and makes changes to the state’s liquor liability laws. The act was signed into law on May 12 and takes effect January 1, 2026.
- S. 62 Education Scholarship Trust Fund (school choice)– The law provides $6,000 scholarships to low-income families so that parents can select an education option that best fits their child’s needs, public or private. The act was signed into law on May 7 and takes effect immediately.
- H. 3309 The “South Carolina Energy Security Act”. To ensure that electric generation and transmission providers are able to plan, site and construct new and replacement generation and transmission resources in a timely and cost-effective manner. It reforms the Public Service Commission to increase transparency and oversight of utility companies, encourages long-term investment in energy generation and paves the way for a new gas-fired plant in Colleton County. The act was signed into law on May 12 and takes effect immediately.
- H. 4026 Capital Reserve Fund for one-time expenditures. The act was signed into law on May 12 and takes effect immediately.
- H. 3632 Clarifying that LIFE and Palmetto Fellows Scholarship stipends apply to accounting majors who completed coursework in economics and business statistics as freshmen in the 2024-2025 school year. The act was signed into law on May 12 and takes effect immediately.
- S. 176 Modernizes the Certified Public Accountants (CPA) and Public Practice Act, removes barriers to mobility and extends the time to pass the exam to 36 months. The act was signed into law on May 12 and takes effect on June 30, 2025.
- S. 307 Guidelines and insurance requirements for peer-to-peer car-sharing programs. The act was signed into law on May 12 and takes effect immediately.
- S. 51 Joint Resolution encouraging Santee Cooper to solicit proposals for utilizing V.C. Summer assets associated with Units 2 and 3. The Joint Resolution was signed on May 8 and takes effect immediately.
- H. 3800 Sales tax exemptions for durable medical equipment. The act was signed into law on May 12 and takes effect immediately.
- H. 4160 Makes nine of the sixteen at-large judicial seats resident seats based on population, caseload, fair representation and location. The act was signed into law on May 12 and takes effect immediately.
The last of the bills enrolled for ratification were ratified on Tuesday and are now awaiting action by the governor. They include:
S.210 – captive insurance companies;
S.220 – Insurance Holding Company Regulatory Act;
S. 507 – IRC tax conformity;
H. 3571 – 811 system notification of excavations;
S. 156 – fentanyl-induced homicide; and
H. 3752 – Social Work Interstate Compact Act.
To see the full list of ratified acts, click here.
The General Assembly is expected to return on Wednesday for the final time this year to adopt the Conference report on the state budget.
