Budget Puts Dollars to Work for SC

Legislators returned Wednesday to pass a historic budget, which includes a record investment in roads. 

The FY22-23 budget benefitted from the state's unprecedented revenue growth that continues to defy expectations. Legislators had a record amount of revenue to allocate, and they chose to invest in tax reductions, reserves – and roads!

Rep. Gary Simrill (R-York) touted the need to invest in roads and said the allocations made through the budget will speed up interstate paving and road widenings across the state.

The recurring dollars are vital to the continued success of the state's 10-year plan. They will be used to match federal IIJA funds and ensure that South Carolina does not leave any federal dollars on the table.

In all, transportation infrastructure received approximately $1 billion this year through ARPA and budget allocations.  

Tax Reductions & Rebates

The budget takes into account tax cuts and rebates provided through separate legislation (S.1087). An overview of the tax relief is provided below:

• Reduces the state's income tax 7% top rate to 6.5% and provides a phased-in reduction to 6% thereafter, including safeguards to trigger reductions. Each year, the top income tax rate will go down a tenth of a percent until it reaches 6%. However, if the state doesn't grow at least 5% each year, those cuts won't happen.
• The three lower income tax brackets will collapse into a single 3% bracket under the plan, resulting in three effective tax brackets: 6%, 3%, and 0%.
• The manufacturing property tax reduces from 9% to 6%.
• Rebates directly to taxpayers based on tax liability (actual taxes paid). These payments are expected to be issued by November or December.

Fix For Local Fees Heads to Governor

After a contentious debate on Wednesday, legislators finally passed legislation that would allow counties to continue implementing local user and service fees. 

You will recall that stand-alone legislation (S.984) introduced by Senator Greg Hembree (R-Horry) passed the Senate but died in the House before the session ended. However, Senators included the language on another bill (S.233) in the final days of session as one last attempt to get the matter resolved this year.

The intent of Hembree's legislation was to end uncertainty and legal chaos since the Supreme Court ruled Greenville's local road use and telecommunications fees invalid last year. Since that ruling, many counties have been sued, some repealed fees, and others suspended using funds until they had more clarity on the issue.  

The House debate on (S.233) was the most contentious, as opponents railed against their colleagues for supporting the bill. The issue has been controversial as some see it as a green light for counties to raise taxes and fees, and others believe that because the Supreme Court ruled, there is no need for the legislature to intervene.

Some legislators even said the lawsuits were being used as a scare tactic to garner votes. We don't necessarily agree because Senator Hembree summed up the need for this legislation perfectly earlier this year, "You've got taxpayers, suing taxpayers, to pay taxpayers!"

Ultimately, the bill passed the Senate by a vote of 24-12 and the House by 47-40. It now heads to the Governor's office, where he can sign it into law, allow the bill to become law without his signature or veto.

Legislators plan to return on Tuesday, June 28, to take up vetoes.

House Welcomes New Members

Rep. Robby Robbins (R-Dorchester) was sworn in as a member of the SC House on Wednesday. Rep. Robbins won the special election to fill the remaining term of Rep. Mandy Kimmons (Dist. 97), who resigned late last year.

Rep. Robbins is seeking re-election to keep the seat and serve a full term in the SC House. He won his special election on Tuesday, and will face a democratic opponent in the November election.

In addition, Rep. Alan Morgan (R-Greenville) was also sworn in. Rep. Morgan was elected to fill the remaining term of Rep. Tommy Stringer (Dist. 18), who resigned earlier this year.

Congratulations to Representatives Robbins and Morgan. We look forward to working with them in the SC House!