Familiar tax cuts, new bonuses figure in SC governor’s budget
COLUMBIA, S.C. (WCSC/AP) - Gov. Henry McMaster’s suggestion for how South Carolina spends billions of extra dollars contains some familiar requests he hasn’t got in his five years in office like cutting income taxes.
McMaster unveiled his executive budget and ideas on spending billions in American Rescue Plan Act funds at a news conference at the Statehouse on Monday afternoon.
“The $2.4 billion in ARPA funds along with the almost $3 billion in surplus revenue generated by South Carolina’s booming economy - presents us with a once-in-a-lifetime opportunity, an opportunity that we cannot afford to squander,” McMaster wrote in a letter to the General Assembly. “If we take advantage of this once-in-a-lifetime opportunity, by making big, bold, and transformative investments in the areas of education, infrastructure, workforce, and economic development, South Carolina will prosper for generations to come.”
The General Assembly controls what gets spent, but lawmakers have had a good relationship with the governor.
At the top of McMaster’s budget is cutting the income tax rate from 7% to 6% over five years, costing $177 million a year.
The governor called on the General Assembly to set aside $500 million in the state’s “rainy-day” reserve fund, a move that would double the size of the fund. McMaster’s office says the state’s debt has been cut in half since he took office and the state now has the lowest debt load in the history of the state.
“With the additional $500 million added to South Carolina’s rainy-day reserve fund, the state will now have 10% of the state’s general fund budget put away in reserves,” McMaster spokesman Brandon Charochak said.
McMaster also released his recommendations for spending some $2.5 billion in ARPA funds.
The two largest single expenditures would send $500 million for rural water and sewer infrastructure and an additional $400 million for broadband access and expansion.
But he also wants to set aside $360 million to complete the widening of I-26 between Columbia and Charleston.
“This targeted investment will accelerate this high priority project on one of the state’s most traveled interstates by at least six years,” McMaster said. “Accelerating the timeline of this critical project will support the demand created by the continued population and economic growth, particularly growth related to record volume at South Carolina Ports, which has already increased traffic on this portion of Interstate 26 to 22 million vehicles per year.”
McMaster recommended an additional $100 million for a new laboratory for the state’s Department of Health and Environmental Control. DHEC said the average useful life of a public health lab is about 40 years, McMaster said.
“The current structure has exceeded the expected useful life and it is one of the oldest in the country,” he said. “Based on the increase in testing demand due to the COVID-19 pandemic, the agency is concerned that State’s core health and environmental laboratory building is no longer able to meet the technological advances of modern-day laboratory practices and high-tech testing systems.”
His recommendations also include $250 million for the state’s Unemployment Trust Fund for small business assistance and $50 million to tourism recovery initiatives.
This is a developing story. Check back for updates.
Copyright 2022 WCSC. The Associated Press contributed to this report. All rights reserved.