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The State House Gavel
The State House Gavel shares updates about the South Carolina General Assembly, including legislative actions, debates and discussions. Featuring news and interviews, so you have access to the latest developments in policy and decisions that shape South Carolina’s future.

The State House Gavel: Senate report calls for treasurer's removal

South Carolina Public Radio | By Maayan Schechter,
Gavin Jackson, Russ McKinney
Published March 26, 2025 at 6:01 AM EDT
State Treasurer Curtis Loftis testifies before the House Ways and Means Constitutional subcommittee on Jan. 29, 2024.
Gavin Jackson
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SCETV
State Treasurer Curtis Loftis testifies before the House Ways and Means Constitutional subcommittee on Jan. 29, 2024.

Statehouse reporters Gavin Jackson, Russ McKinney and Maayan Schechter are back at the Capitol reporting what you need to know when lawmakers are in Columbia. They'll post news, important schedules, photos/videos and behind-the-scenes interviews with policymakers.

Welcome to Wednesday.

The South Carolina House will soon welcome a new member.

Tuesday, voters in the North Charleston-area House District 113 elected Democrat Courtney Waters to fill the seat formerly held by Rep. Marvin Pendarvis. Waters ran unopposed.

And congratulations are in order to the Senate Filibusters, who made a historic comeback and finally got their Cinderella run in a 13-9 win against the House Amenders in the 32nd annual softball game.

It was a true nail biter at the very end, but with some new Senate talent and staff/pages — coached by Sen. Sean Bennett, R-Dorchester — the chamber pulled off a win to reclaim the beloved trophy.

We expect plenty of upper chamber gloating.

And what to watch Wednesday:

  • The Senate is expected to return to the weekslong tort reform debate, and we are told Wednesday could be a long night as the chamber works through joint and several liability parts of S. 244.
  • The House will debate a bill targeting diversity, equity and inclusion (DEI) offices and initiatives on college campus, local and state government and school districts.

You're reading The State House Gavel, a daily reporter notebook by reporters Gavin Jackson, Russ McKinney and Maayan Schechter that previews and captures what goes on at the South Carolina Statehouse this year while lawmakers are in session.

Notebook highlights:

  • After months of hearings — and some delays — the Senate Finance Committee released a report into the $1.8 billion accounting error that calls for the treasurer to be removed.
  • Republican leaders from the governor to House and Senate released somewhat of a joint income tax cut plan that aims to drop the rate. We have the details.
The S.C. Senate Filibusters won the 32nd annual legislative softball game 13-9 against the House Amenders at Founders Park in Columbia, S.C., on Tuesday, March 25, 2025.
MAAYAN SCHECHTER/SCETV
The S.C. Senate Filibusters won the 32nd annual legislative softball game 13-9 against the House Amenders at Founders Park in Columbia, S.C., on Tuesday, March 25, 2025.

$1.8B error report: Treasurer must go

For weeks, we reported the Senate Finance panel's expected stance on whether Treasurer Curtis Loftis should step down after the public disclosure of the $1.8 billion accounting error that is part of a federal investigation by the Securities and Exchange Commission.

On Tuesday, that recommendation became official in ink within a 49-page report that was presented to the Senate Finance Committee.

Berkeley Republican Sen. Larry Grooms, who led hearings looking into the error, said that his panel recommends Loftis's removal from office, citing "willful neglect of duty and other reasonable clauses."

S.C. Sen. Larry Grooms speaks on panel's $1.8 accounting error report 3.25.25

What did Loftis say: In a statement after the report's release, Loftis accused Grooms and his panel of making "countless false accusations," inviting the State Law Enforcement Division and others to investigate the matter.

"Today’s report isn’t about accountability — it’s a power grab," Loftis wrote in part. "These elected officials don’t want an elected state treasurer; they want an appointed one so they can control billions of public dollars for their own special interests. My focus is protecting the hard-working taxpayers, not the interests of the political elite."

You can read Loftis's full statement below:

S.C. Treasurer Curtis Loftis's full statement after the release Tuesday, March 25, 2025, of the Senate Finance subcommittee's report on the $1.8 billion accounting error.
S.C. Treasurer Curtis Loftis's full statement after the release Tuesday, March 25, 2025, of the Senate Finance subcommittee's report on the $1.8 billion accounting error.

As background: To understand the error, you have to go back two years ago to the public disclosure of the larger $3.5 billion error that led to the resignation of then-Comptroller General Richard Eckstrom. Then lawmakers learned of another related major financial error: The state Treasurer's Office had a fund listing a balance of $1.8 billion that had no designated agency claim. A $3 million audit by outside firm AlixPartners further determined that $1.6 billion of that amount was not in fact real, and that the offices of comptroller, treasurer and auditor all had knowledge of the fund's existence for years. That led to a second resignation, former state Auditor George Kennedy.

"The state treasurer has a fiduciary duty to the people of South Carolina," Grooms told the Senate budget writers Tuesday. "The subcommittee finds that Loftis has breached his fiduciary duty as evidenced below."

Examples in the report, read by Grooms, includes:

  • That Loftis "made financial decisions that were not in the best interest of the state, independent of any oversight body’s authority to encourage or discourage this decision and announced his actions in an inflammatory manner that put the state’s financial security at risk."
  • That Loftis is "currently in violation of federal law requiring repayment of federal funds and interest earned thereon," dealing with a March 18, 2025, U.S. Treasury notice of noncompliance over Housing Assistance money that was "incorrectly directed" to the state general fund by the treasurer.
  • That Loftis "has unnecessarily caused the expenditure of state resources in response to the Subcommittee investigation and the release of the AlixPartners report, acting without care or prudence."
  • That Loftis "threatened to release sensitive state financial information and then took active steps to do so."

"He has made perfectly clear that he cannot and will not collaborate on the directed actions suggested by multiple neutral experts who have reviewed this calamity through an apolitical lens," the report concludes. "It is the strong recommendation of the subcommittee that we do not consign the ongoing fiscal oversight — the banking and investment functions of our state — to continued incompetence. In sum: if the treasurer cannot keep track of the treasury, then he should not remain treasurer."

What's next: The Senate must now decide its path forward on Loftis's future. Senate budget Chairman Harvey Peeler, R-Cherokee, said leaders plan to consult with the clerk and lawyers. Per the report, the Senate Finance subcommittee plans to introduce a joint resolution that formally calls for Loftis's removal.

What does the state Constitution say: The governor can remove a statewide officer after a two-thirds vote of each legislative chamber. The officer, in this case Loftis, is allowed the opportunity to a hearing in his own defense, or by an attorney or both, before any vote."

Since South Carolina's formation, the report says that no constitutional officer has ever been removed from office.

South Carolina Sen. Larry Grooms, R-Bonneau Beach, holds up a report by state Treasurer Curtis Loftis during a state Senate subcommittee meeting on Thursday, Feb. 27, 2025, in Columbia, S.C. (AP Photo/Jeffrey Collins)
Jeffrey Collins/AP
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AP
South Carolina Sen. Larry Grooms, R-Bonneau Beach, holds up a report by state Treasurer Curtis Loftis during a state Senate subcommittee meeting on Thursday, Feb. 27, 2025, in Columbia, S.C. (AP Photo/Jeffrey Collins)

GOP leaders release income tax plan

Top Republican Statehouse leaders on Tuesday jointly released an income tax plan that’s been months in the making.

Leaders say it will simplify South Carolina’s tax code, make the state more competitive but also allow taxpayers to keep more money in their paychecks.

Income tax refresher: South Carolina's effective tax is lower than many other states, but the marginal tax rate on paper is higher. The state Revenue and Fiscal Affair's Office reports 44% of the state's returns have no liability, meaning they don't pay an income tax, and 10% of the returns pay about 63% of the total tax liability. Income tax revenue makes up around 44% to 45% of the state's revenue.

House budget Chairman Bruce Bannister, R-Greenville, filed the proposal — H. 4216 — moments after the Tuesday press conference in which all the major Republican leaders from both chambers, Gov. Henry McMaster and Americans for Tax Reform President Grover Norquist hailed the proposal as historic.

"When you have 44% of the population that does not pay income taxes, as the governor said, everybody should pay something," House Speaker Murrell Smith, R-Sumter, told reporters. "And that's the beauty of a flat rate, that those who pay lower will pay less in taxes and those who earn more will pay more in taxes."

What does it do in part, per GOP leaders?

  • It calls for a flat rate for all taxpayers of 3.99% in 2026, down from the current top rate of 6.2%.
  • If the economy remains strong, the rate will be further cut to 2.49%.
  • The bill includes a personal exemption for certain wage earners.
  • Bannister said the legislation maintains all the existing deductions and credits, including for military families, senior citizens and families with dependents.
  • The withholding tables for the S.C. Department of Revenue will be adjusted.

How much will it cost?

Bannister said the cut will come at a $200 million cost each year until the state can get to its stated goal rate.

The legislation is, however, still awaiting a fiscal impact report by the state Revenue and Fiscal Affairs Office. Bannister said if the entire rate cut was made today, it would cost about $2.7 billion, but say four to six years down the road, the total will be different based on the economy and the state budget.

S.C. House Ways and Means Chairman Bruce Bannister, R-Greenville, on income tax plan 3.25.25

What are Democrats saying: House Minority Leader Todd Rutherford, a Richland Democrat who sits on the House Ways and Means Committee, told reporters Democrats were not invited to the plan's roll out but are in support of reducing the tax burden.

You can listen below to part of that interview about concerns the Democrats have about reductions in income tax revenue and calls to bring the rate down to zero.

S.C. House Minority Leader Todd Rutherford, D-Richland, on income tax plan 3.25.25

Look ahead: The House Ways and Means budget-writing committee plans to take up the bill next week, giving the chamber about the second week of April to debate the plan. Senate Finance Chairman Harvey Peeler — who has said in the past that you can't "out tax" Peeler — told reporters they'll take up the House bill and "make it better."

"And better, I mean lower," he added.

Adding pressure: Gov. Henry McMaster told leaders on Tuesday that he'd like to see a bill on his desk before session ends on Thursday, May 8. There is a little more than a month left of the regular session, and the Senate still plans to wrap up tort reform, energy utility legislation and, of course, the budget in late April.

"I have found the clock runs by the desire of the General Assembly," Peeler said. "So, we'll make time."

The State: SC wants to change how it taxes your income. Here’s what we know about the proposal
SC Daily Gazette: Republicans’ ‘historic’ tax-cut plan attempts to give SC competitive edge
AP: South Carolina wants to accelerate constant push to lower income taxes
Post and Courier: SC Republicans launch 'historic' tax cut proposal, but critics say the poor will pay more

South Carolina House Speaker Murrell Smith, R-Sumter, left, speaks as state Senate Finance Committee Chairman Harvey Peeler, R-Gaffney, listens during a news conference on tax cuts on Tuesday, March 25, 2025, in Columbia, S.C. (AP Photo/Jeffrey Collins)
Jeffrey Collins/AP
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AP
South Carolina House Speaker Murrell Smith, R-Sumter, left, speaks as state Senate Finance Committee Chairman Harvey Peeler, R-Gaffney, listens during a news conference on tax cuts on Tuesday, March 25, 2025, in Columbia, S.C. (AP Photo/Jeffrey Collins)

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Maayan Schechter
Maayan Schechter (My-yahn Schek-ter) is a news reporter with South Carolina Public Radio and ETV. She worked at South Carolina newspapers for a decade, previously working as a reporter and then editor of The State’s S.C. State House and politics team, and as a reporter at the Aiken Standard and the Greenville News. She grew up in Atlanta, Georgia, and graduated from the University of North Carolina-Asheville in 2013.
See stories by Maayan Schechter
Gavin Jackson
Gavin Jackson graduated with a visual journalism degree from Kent State University in 2008 and has been in the news industry ever since. He has worked at newspapers in Ohio, Louisiana and most recently in South Carolina at the Florence Morning News and Charleston Post and Courier.
See stories by Gavin Jackson
Russ McKinney
Russ McKinney has 30 years of experience in radio news and public affairs. He is a former broadcast news reporter in Spartanburg, Columbia and Atlanta. He served as Press Secretary to former S.C. Governor Dick Riley for two terms, and for 20 years was the chief public affairs officer for the University of South Carolina.
See stories by Russ McKinney