COLUMBIA, S.C. — On Tuesday, the South Carolina General Assembly commenced its latest two-year session, necessitating an unusually high number of introductions. Approximately 20% of the legislators are newcomers, with the Senate seeing 13 out of its 46 members elected in November. Typically, senators serve longer terms, often taking decades to rise through the ranks, making this a notable change.
The influx of new lawmakers has the potential to alter the dynamics of a General Assembly traditionally focused on fostering economic growth but often slow to adapt to change in various other areas. An example from 2000 illustrates this point, as the legislature only voted to remove the Confederate flag from the Statehouse dome due to pressures from businesses and activists. Currently, Republicans enjoy supermajorities in both the House and the Senate.
The Senate wasted no time, meeting briefly to organize discussions for the week regarding a bill allowing parents to utilize vouchers of up to $8,000 for private school tuition or other educational support. This concept isn’t entirely new; a similar bill passed last year but was nullified by the South Carolina Supreme Court, which ruled that the state Constitution prevents taxpayer money from directly benefiting private or religious schools. To circumvent this ruling, the Senate proposes using lottery funds for the vouchers while redirecting college scholarship funds to the state’s general fund. This plan would cater to families with incomes below $150,000, limited to 15,000 vouchers annually.
The House has approved the Senate’s initiative to explore a constitutional fix, though an alternative solution could involve introducing a constitutional amendment that would require majority voter support. However, no Republican leaders have proposed this option thus far.
Tax reductions are another pivotal issue on the legislative agenda. Governor Henry McMaster’s recent budget proposal advocates for an earlier reduction of the state’s top income tax rate to 6%, a goal that is part of a gradual decrease from the current rate of 7%. There is growing support among both House and Senate leaders for a more substantial tax cut, but specifics have yet to be disclosed. In a letter to lawmakers, McMaster emphasized the need to consider further cuts or the outright elimination of the personal income tax rate.
While tax cuts might be viewed as the straightforward approach, there is a more challenging route involving comprehensive tax reform. This could entail eliminating certain sales tax exemptions and income tax deductions or even overhauling the entire tax structure, a task that Republican leaders have hinted may be on the legislative horizon.
As the 2025 session unfolds, divisions within the Republican caucus in the South Carolina House are re-emerging. The Freedom Caucus, consisting of the most conservative members, boasts about 17 members, which isn’t enough to block legislative progress if the rest of the Republican legislators band together. However, the Freedom Caucus’s strategy involves proposing amendments that align with their principles, subsequently compelling mainstream Republicans to vote against these measures, creating public friction.
Additionally, South Carolina’s robust economy and remarkable growth have resulted in significant budget surpluses, with state projections estimating an additional $650 million in tax revenues this fiscal year, alongside over $1 billion in surpluses available for allocation. Lawmakers will deliberate on how to divide more than $14 billion.
Governor McMaster advocates for the allocation of $200 million to increase minimum salaries for teachers, proposing a $3,000 raise for each educator. Additionally, he mentioned that around $240 million of the excess revenue would be required for disaster relief efforts stemming from Hurricanes Helene and Debbie, covering costs related to federal aid matches for impacted farmers, infrastructure repairs, and emergency services personnel.
Finally, McMaster also aims to fund the establishment of South Carolina’s first neurological hospital in Columbia with $100 million, addressing statistics that show the state has one of the highest rates of stroke and dementia-related deaths in the nation.
