The General Assembly returned to Columbia for one final time to adopt the Conference Report on the state budget. Two committees held meetings this week regarding the Department of Insurance, and another met on modernizing the state Department of Transportation. The legislature has now adjourned for the remainder of the year, although committees are expected to meet in the interim, and we will keep you apprised of any activity.
On Wednesday, the General Assembly returned to Columbia to adopt the Conference Report on the FY24-25 General Appropriations Act H. 4025. For the first time in years, the budget will not include earmarks in order to focus on members’ top priority – tax reform.
Earmarks are one-time payments given to non-profits or local governments, which can include a number of services as well as road repairs, first responder equipment upgrades or capital improvements to local facilities. Last year’s budget allocated more than $430 million in earmarks, with the biggest portion dedicated to tourism, recreation and sports. Included in the budget this year is an increase in legislators’ “in-district expense” allocation, raising it from $1,000 to $2,500 monthly, basically giving every legislator an $18,000 annual pay raise.
The adopted state budget also includes:
- $1 billion for tax relief, including over $800 million for homestead exemption and $300 million to continue cutting the state’s personal income tax, dropping the rate from 6.2% to 6%;
- $80 million to raise starting teacher minimum salaries by $1,500 to $48,500;
- $200 million for bridge maintenance and repair;
- $150 million for the neurological health center at USC;
- $80 million for airport enhancements;
- $91 million for technical college scholarships for critical needs jobs through the SC Workforce Industry Needs Scholarship Program (SCWINS);
- $60 million to maintain health services covered by Medicaid; and
- $66 million for a minimum 2% state employee pay increase.
In response to Hurricane Helene:
- $35 million to the Department of Transportation for unreimbursed costs related to Hurricane Helene;
- $40 million to the Office of Resilience to replenish the Disaster Relief and Resilience Reserve Fund; and
- $222 million to match federal FEMA funds.
The $14.5 billion general fund budget includes nearly $1 billion in “new” recurring revenue and an estimated one-time budget surplus of about $2 billion. Nearly $500 million of the revenue remains unspent, which can possibly be used next year for additional tax relief or to fill gaps in the budget due to economic uncertainties. The total state budget, which includes general funds, federal funds, fines and fees is $41 billion.
To view the budget briefing, click here.
To view the budget spreadsheet, click here.
The budget, which takes effect on July 1 with the start of the fiscal year, now goes to the governor, who has line-item veto authority.
The House Healthcare and Regulatory Subcommittee of the Government Efficiency and Legislative Oversight Committee met on Tuesday to discuss the study of the South Carolina Department of Insurance. Department of Insurance (DOI) Director Michael Wise gave an overview of the agency and its role and responsibilities.
Wise outlined his vision for the agency, which includes:
- Increased consumer engagement through education outreach programs;
- Enhanced consumer protection efforts through complaint resolution, ensuring carrier compliance and insurer solvency;
- Promoting well-functioning competitive insurance markets, utilizing data to make informed decisions and policy; and
- Cultivating a culture of public service, always focusing on what is best for the people of South Carolina.
During Wise’s testimony, he received numerous questions about rates and potential ways to reduce them. This meeting was part of the regularly scheduled review of state government agencies.
On Wednesday, the newly formed House Insurance Rate Review Ad Hoc Committee met for the first time and heard testimony from Director Wise. He addressed them on the state of insurance rates for all regulated lines of insurance and the Department of Insurance responsibilities, and answered numerous questions relating to insurance rates and the department’s role in regard to the insurance industry.
Committee Chairman Gary Brewer (R-Charleston) said that the committee’s goal was to drill down and find ways to reduce insurance rates for all South Carolinians. The committee’s next meeting, yet to be scheduled, will focus on insurance fraud.
The House Department of Transportation Modernization Ad Hoc Committee held its first meeting on Wednesday. House Speaker Murrell Smith (R-Sumter) told the committee he wants them to work within the system to find efficiencies and try to modernize, noting that our state roads, designed thirty years ago for a population of two million, are no longer adequate for a population soon to be approaching six million. He wants them to specifically focus on:
- Permitting reform;
- Proliferation of electric vehicles not paying their fair share;
- Modernization of our toll statute;
- Internal structure system at the DOT; and
- EV registration fee equalization.
The committee will meet around the state this summer and fall.
TThe following bills have recently been signed into law by Governor Henry McMaster:
S.210 – captive insurance companies;
S. 507 – Internal Revenue Code – 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.
