Dear Friends:

The SC General Assembly returned to the State House for the final vote on the $14.7 billion state budget that takes effect July 1. This spending plan sets a vision for SC’s future while returning money to taxpayers.

The Windfall

Our state’s booming economy has generated another windfall in tax revenue. Last week, budget forecasters offered an additional $1 billion. Wisely, budget negotiators opted not to spend roughly $500 million of the unexpected revenues. That money can speed up the reduction of your state income tax rate when the Senate takes up the tax reform bill, which the House passed earlier this month. That comes next January when the regular session resumes.

Budget Highlights

Tax Relief & Savings

• $300 million is being applied to reduce the top state income tax rate from 6.3% to 6%, lowering state revenues by an equal amount. We have been cutting the state income tax for several years, resulting in South Carolinians paying 14% less income tax than they did three years ago.
• $1 billion in direct tax relief, consisting of $800 million to keep property taxes for owner-occupied homes at low levels compared to other states.
• $1.2 billion has now been set aside in the state’s rainy-day fund.
• $500 million of unexpected revenues unspent.
• $1.2 billion cut in unnecessary federal and other funds authorizations, reducing the total budget.

Strengthening Education: The $80 million budget allocation increases the minimum pay for public school teachers to $48,500, which is significantly higher than their 2017 salary of $28,190. The new starting salary is higher than in Georgia and North Carolina. State funding for K-12 schools commands roughly $4.5 billion of this budget. Per-pupil funding has increased by 44% since the 2018-2019 school year. We are also expanding summer reading camps, increasing 4K funding, and investing $75 million in high-quality instructional materials.

School Choice: Under legislation passed by the General Assembly this year and signed by Gov. McMaster earlier this month, $45 million is allocated to fund the school choice initiative for up to 10,000 eligible K-12 students of South Carolina’s 770,000 K-12 public school students.

State Pay Hike: A $66 million allocation provides state employees with a 2% raise, while the lowest-paid workers would be raised to a new pay minimum based on their classification. This is in response to a state study that found average compensation far below industry medians.

Bridges & Hurricane Relief: Fixing deteriorating bridges around the state has been a high priority in recent budgets. SCDOT will receive $200 million to speed up the repair and replacement of aging bridges, and it is allotted $35 million to continue to clean up debris caused by Hurricane Helene.

Higher Education: Our state’s public colleges and universities receive $71 million for tuition mitigation efforts to keep in-state tuition low. This guarantees that tuition rates will remain frozen for in-state students for the seventh year. $500 million will be used to renovate and build new university facilities, as well as establish new programs. The largest single project is at USC, with a $150 million investment to build a specialized hospital for neurological diseases in Columbia. Clemson University gets $40 million to construct a NextGen Computing Complex. The Medical University of SC receives $25 million for a new seven-story building in Charleston to house its College of Medicine. The state’s technical colleges receive nearly $85 million for maintenance, renovations, and repairs.

Supporting Law Enforcement: We are fully funding an SRO in every public school, increasing pay across law enforcement agencies, and investing in criminal justice initiatives, including the Attorney General’s Internet Crimes Against Children Task Force, which saw a 143% case surge last year.

Lottery Change: One budget directive allows people to buy lottery tickets using debit cards. Fewer people regularly carry cash, allowing debit card sales to increase revenue by an estimated $52 million. Lottery money pays for college scholarships.

Community Investments: Earmarks are not included in this year’s budget. The one-year moratorium on all one-time funding requested by legislators is a longstanding practice of allocating surplus budget funding to specific community investment projects. Some legislators argue that the decision will disproportionately harm poor, rural areas that lack the tax base to fund projects.

By The Numbers:

• $11 million to upgrade the state’s voting system
• $60 million for increased Medicaid costs
• $4 million for opioid treatment services
• $12 million for veteran home operating costs
• $10 million to modernize the public health department’s IT system
• $4 million for early care and education at the social services department
• $5 million for air quality and drinking water programs
• $25 million for modernizing the Judicial Department’s case management system
• $10 million for capital upgrades at local airports

The budget has been sent to Governor Henry McMaster for his review and approval. He has the authority to issue line-item vetoes that can be sustained or overridden by the legislature.

The Contentious Issue

Forget all the worthwhile items in the budget (teacher pay raises, funding school choice, fixing aging bridges, paying for hurricane clean-up, etc.). Most news reporting and editorials have focused on increased compensation for legislators included in this budget.

Last month, the Senate voted 24-15 to increase the in-district expense allotment for legislators from $1,000 to $2,500 monthly. That compensation was last increased in 1990. Proponents argue a raise is needed to keep up with inflation.

For perspective, add this to the mix. Legislator’s base pay was boosted to $10,000 in 1978 – nearly half a century ago. It was bumped up by $400 in 1990. To keep pace with inflation, that ’78 salary would need to be around $49,000. Conversely, that ’78 pay is worth about $2,000 today.

I have previously written that reasonable compensation is needed so that everyday citizens can afford to serve in the legislature. Fair compensation would allow them to take enormous amounts of time away from their paying jobs back home and still support their families. Most legislators’ public service is nearly full-time, with part-time pay.

A Better Way

Legislators raising their pay is self-serving. There is a better way.

During Wednesday’s House budget debate, I filed legislation to create the General Assembly Member Salary Commission. Sen. Tom Young (R-Aiken) joined me with an identical bill in the Senate. The House bill already has 17 sponsors, including many in leadership.

The Commission would have seven governor-appointed members, one from each of the U.S. congressional districts. Those members must have significant experience or expertise in law, economics, finance, human resources, personnel management, business, salary surveys, compensation, and benefits. Every four years, the Commission would authorize a study of legislative compensation based on the legislative job duties and responsibilities, as well as the pay of legislators in other states. This approach is similar to the Agency Salary Review Commission, which evaluates and sets the salaries for leading state agencies and statewide Constitutional officers.

The General Assembly Member Salary Commission will be responsible for providing an independent analysis of the compensation needed to attract everyday citizens and augment the current legislative makeup, which is primarily comprised of lawyers, entrepreneurs, and individuals like me who are retired from their careers.

Governor’s Position

Governor Henry McMaster told reporters he’ll decide whether to veto the legislative pay raise after the budget package reaches his desk. One news report stated, “He hinted he may let it go, unlike his predecessor.”

McMaster said, “Being a legislator is officially a part-time job. But legislators work long hours, often late into the night. It makes sense that inflation has hit them hard, too.”

News Closer to Home

USC-Aiken Cyber Groundbreaking

The SC National Guard Cyber Integration Center experienced an unusual groundbreaking this week. Due to the rain, we were forced inside and (humorously) ran the risk of damaging the carpeting with our shovels. This facility is a partnership with USC-Aiken, SRS, and the business community. Along with the soon-to-be constructed SC National Guard Armory to house the Guard’s cyber battalion, this is the most significant National Guard investment in our state since WW2. These facilities will strengthen our national cyber defense and train the Cyber soldiers we desperately need. It will pay dividends for decades.

Monumental Day for Aiken County Healthcare

Recently, Aiken County legislators tossed sand at the groundbreaking for Aiken Technical College’s Nursing Education Center. This facility will significantly expand the school’s nursing training program, which is vital since South Carolina currently has a shortage of 6,000 nurses, with those projections expected to skyrocket. Construction was enabled by $11.5 million from the 2022 Plutonium Settlement between the state and the federal government, resulting from the federal government’s failure to remove plutonium waste from SRS on time.

PATRIOTIC AIKEN!

Aiken’s veterans hosted one of a handful of Memorial Day Parades in the state. And, in my view, it has to be the biggest and best in SC. My guest was Major General Dennis Kenneally (USA-Ret). A relatively new transplant to Aiken, he was cheered by the spectators and said he was very touched by the tribute and the enthusiastic patriotism.

Memorial Day

On a more solemn note, the annual Memorial Day Service in Aiken paid tribute to those who have fallen, giving their lives in service and sacrifice to our nation. Thanks to our Aiken County Veteran leadership for organizing this event.

The F.O.C.’s Gathered

The “F.O.C.’s — “Friends of Charlie” — gathered this week to honor “Aiken’s Veterinarian,” the late Dr. Charlie Timmerman. Old Dibble Road will forever be remembered as Charlie’s Road. Nearly everyone Charlie touched became an F.O.C. Whether you were a 4-legged mongrel or a pedigreed show dog, you knew Charlie was your friend. And we humans instinctively knew Charlie was immediately our friend. We all succumbed to Charlie’s charm, the softness of his talk, his tenderness, his wry grin, and his wonderful sense of humor. He had the rare ability to make each of us feel special. But it was Charlie who was incredibly special.

PHOTO OF THE WEEK

This past Sunday, Aiken’s Salvation Army Advisory Board joined the congregation at the Salvation Army Church. It was heartfelt service with a powerful sermon from Capt. Michael Goode. We, the board members, were recognized with a prayer for our service to the Salvation Army.