It's Friday, Feb. 13.
We've wrapped Week 5 of the legislative session.
There are 13 more weeks and 39 more days until sine die adjournment.
You're reading The State House Gavel, your daily reporter notebook by Maayan Schechter and Gavin Jackson that previews and captures what goes on at the South Carolina Statehouse.
Not ready to turn off the Statehouse?
Tune in to SCETV at 7:30 tonight for the latest This Week in South Carolina as host Gavin Jackson interviews Senate Minority Leader Brad Hutto of Orangeburg and House Minority Leader Todd Rutherford of Richland about party strategy in the Capitol.
Notebook highlights:
- South Carolina economic advisors share new forecast as House budget writers prep spending plan
- Senators are all in on tax policy — for several more days
- Gov. Henry McMaster backs Lt. Gov. Pamela Evette for governor
SC's tight(er) budget forecast
South Carolina's economic advisors shared good news on Thursday, with a strong hint of a reality check for legislators as House budget writers get underway with drafting the first version of the spending plan.
The good news?
South Carolina's economy remains strong, and the fiscal year's year-to-date revenue growth is slightly better than expected, and revenues are close to expectations, according to the state's Revenue and Fiscal Affairs Office.
The RFA reported total general fund revenue — that's the account that lawmakers can spend from in the budget — for the fiscal year through January is about $90 million above expectations.
The reality check?
In the last three months, revenue growth in some areas has slowed faster than expected. Other areas have fared better.
The RFA reported Thursday:
- State sales tax revenue is almost $9 million below expectations
- Withholdings is about $5 million below expectations
- Corporate income tax is $6.6 million below expectations
- Non-withholdings is about $54 million above expectations
- Earned on Investments is about $17 million above expectations
What does all of this mean?
In short, as revenues remain close to expectations, the RFA said there wasn't a justification to adjust projections right now.
First, for those unfamiliar, the state Board of Economic Advisors meets monthly to track and report revenue collections and economic factors that may impact the state's bank account.
In November, the RFA reported the budget outlook for the fiscal year that starts July 1:
Thursday's call, led by RFA Director Frank Rainwater, comes days before the House Ways and Means budget-writing committee takes the first crack at next year's budget.
The Thursday report means House budget writers won't have a rush of additional money coming their way, unlike in previous years, as they try divvy our dollars for state priorities.
Think Medicaid, roads, and two massive pieces of tax policy changes.
What does it also say?
South Carolina, like many other states, found themselves flush with cash after trillions in federal COVID-era spending was injected into the economy. That, along with a high population increase has led to record surpluses and budget growth.
The BEA says that rush is slowing down, and budget growth could come back down closer to historical norms. Rainwater noted that the revenue over estimate number through January was the lowest in the last seven years.
This week, the House Ways and Means Committee wrapped its subcommittee work, with expected plans for the full committee to pass the budget by Wednesday or Thursday.
The bill won't be debated by the full House until mid-March.
That gives staff enough time to print it out (yes, they still do that), and for non-Ways and Means members in the chamber time to look through the spending plan and draft amendments.
The BEA meets next in late March and then early April on revenue projections. The Senate is not expected to debate the budget until late April.
And, depending on how those projections go, that could either spell great news or just OK news as lawmakers between both chambers negotiate any differences and as lawmakers try to get their earmarks in to the final version before it hits the governor's desk.
Beyond the budget, what's next for the House?
Lawmakers say we may be in for another long week.
The House skipped several bills on the calendar this week, with a couple expected to take focus in Week 6:
- H. 3477: Sponsored by Rep. Micah Caskey, R-Lexington, the legislation would change the calculation of how much money beneficiaries can get through unemployment insurance benefits.
- H. 4757: Sponsored by Rep. Tommy Pope, R-York, the bill creates the so-called Parental Rights Act, an outline of a framework so to speak of a parent's role in the education, health care and mental health care of their child, or under the age of 18. Included in the proposal, the bill says, without state interference, that parents can make and consent to all physical and mental health care decisions for the child, review all health records of their child, and review all written and electronic education records controlled or in possession by a "local education agency."
Senate sinks teeth into tax policy
It's been quite some time since the Senate underwent a serious debate over tax policy and the plan is to go back-to-back with two bills:
- S. 768: Sponsored by Senate Finance Chairman Harvey Peeler, R-Cherokee, the legislation would expand the state's homestead exemption law to $150,000 for anyone age 65 and up, but with limits on newcomers to South Carolina. You can find the amended fiscal impact study here.
- H. 4216: Sponsored by House Ways and Means Chairman Bruce Bannister, R-Greenville, the bill aims to cut the state's top income tax rate to 5.39% from 6%, and raises the rate to 1.99% for anyone earning up to $30,000. Over time, if the state brings in enough revenue each year, the goal is to cut the rate completely down to zero. The updated fiscal impact study is found here.
The Senate is taking on Peeler's proposal first and true to form, the self-styled "deliberative body" moved slowly through debate this week, without finishing before going home Thursday.
Reporters were told Thursday the debate is expected to stretch far into next week, as amendments are piling up. The House income tax bill should follow immediately after and if the Senate passes it with no changes, the legislation will go straight to the governor's desk for his signature.
In the event you've missed any of the debate over the homestead exemption bill, we've got you covered with a bit of audio from Wednesday with the one person who may be the happiest to crack open the entire tax policy debate: Dorchester Republican Sen. Sean Bennett.
McMaster makes 2026 gov choice official
Gov. McMaster made his choice for governor official Thursday.
In Columbia, the Richland Republican formally endorsed his Lt. Gov. Pamela Evette to succeed him while about 100 supporters watched on.
The news first broke late Wednesday, followed by the Evette campaign pushing out a video of the governor praising Evette.
The endorsement ramps up pressure in the contested GOP race that will be decided in the June 9 primary as a total five Republicans compete to take the governor's mansion.
- Evette
- Attorney General Alan Wilson
- 1st District Congresswoman Nancy Mace
- 5th District Congressman Ralph Norman
- State Sen. Josh Kimbrell of Spartanburg County
The next obvious question after McMaster's endorsement?
Will President Donald Trump, a close McMaster ally, be next?
Then lieutenant governor, McMaster endorsed Trump in 2016, becoming the first statewide elected official in the country to do so. And as the familiar story goes, Trump returned that support when he nominated then-Gov. Nikki Haley to be his ambassador to the United Nation, triggering McMaster's ascension to the governor's office in January 2017.
McMaster picked Evette, a relatively unknown Travelers Rest businesswoman at the time, as his lieutenant governor, the first lieutenant governor elected on a joint ticket with the governor.
“I wanted somebody who had a business background, who knew some people, who was a Trump supporter of course, and was willing to get to work and do the things necessary to make this state even greater,” McMaster said Thursday of Evette. “With a leader like Pam, she has learned about government. She has been my eyes and ears. She has given me advice. She has carried our message. She has walked the walk and talked the talk. She's done the things necessary. I trust her and I believe in her.”
In the audience Thursday included a handful of legislative endorsements, including House Majority Leader Davey Hiott of Pickens, and Reps. Bill Hixon of Edgefield, Gil Gatch of Dorchester, Tim McGinnis and Case Brittain of Horry, Patrick Haddon of Greenville, and Melissa Oremus of Aiken.
Evette also took questions from media (edited for clarity and length):
How important is this endorsement?
His (McMaster's) endorsement is the biggest endorsement in the state of South Carolina. And it means a lot to me that he has the confidence in me to continue with this amazing run that we've had the last eight years.
Can we expect a running mate announcement?
Right now, (the focus) in the governor's race is getting my message out to the people of South Carolina. There'll be a time and a place for it. So stay tuned.
What’s the biggest thing you’ve learned from the governor?
It is that communication, cooperation and collaboration means a lot. And you can see because we've had win after win here in South Carolina and success after success working alongside with the General Assembly to get things done. That's what the people of South Carolina expect. That's what they're used to. And that's how we've continued to grow and be the powerhouse that we are.
What about an endorsement from President Donald Trump?
When the president decides it's the right time to do it, he will. I have said since the beginning of this race that everybody should be honored to have his endorsement, but nobody should expect it.
How are other GOP candidates reacting?
- Wilson on Thursday released a new 30-second statewide TV ad buy called "Courage" that talks about his defense of Trump after the 2020 election. A campaign release said the ad was produced by John Brabender, the chief creative officer for Trump’s 2024 campaign.
- Calling Evette a "nice lady," Mace said she respected McMaster's years of service. But, she added, "endorsements don’t fix potholes. Endorsements don’t eliminate the state income tax. And endorsements don’t put billions into roads and bridges. Results do. And my record does too."
There are two Democratic candidates in the governor's race:
- State Rep. Jermaine Johnson of Richland County
- Charleston attorney Mullins McLeod
In a statement sent to media Thursday, state Democratic Party Chairwoman Christale Spain called McMaster's endorsement "of the same old tired leadership that's plagued South Carolina for the last decade."
Statehouse clips from around the state
- More shrimp testing done in Charleston and Myrtle Beach as advocates call for state labeling law (Post and Courier)
- AG Wilson joins bipartisan coalition backing Kids Online Safety Act (WCIV)
- Powering AI can need a lot of water. SC doesn’t know how much data centers require (The State)
- Senate panel delays vote on bill limiting birth certificate changes in South Carolina (WLTX)
- Trump nominates Black female attorney from Upstate to fill SC’s lone vacancy on federal bench (Post and Courier)
- Longtime Zesto co-owner to get honor in West Columbia. Here’s what we know (The State)
- SC lawmakers weigh restrictions on allowing how transgender people edit birth certificates (Post and Courier)
- SC House subcommittee to hold hearing on potentially impeaching solicitor over Logan Federico case (WIS)
- SC measles: GOP governor candidates oppose tighter vaccine rules (Greenville News)
- SCDMV sells drivers’ personal data to third-party companies under federal law (WACH)
