South Carolina lawmakers returned to the State House on Tuesday to begin the 2025-2026 legislative session. Ahead of their return, Governor Henry McMaster introduced his $41.6 billion executive budget for the upcoming fiscal year.
The comprehensive spending plan prioritizes teacher pay raises, accelerated tax cuts, and disaster relief funding.
“South Carolina’s booming economy has once again created a large budget surplus, this year totaling over $1.8 billion in unexpected revenue,” The Governor said in a press release. “By thinking big, by being bold, and by making these transformative investments, I believe we will set our state on a course that will provide the opportunity for prosperity, success, and happiness for generations of South Carolinians.”
Teacher Pay Raises and Expanded Education Programs
McMaster’s budget dedicates $200 million to increase the starting salary for teachers to $50,000, reaching the goal a year earlier than planned. The proposal also supports the Education Scholarship Trust Fund, which provides private school tuition vouchers. To further bolster the program, McMaster suggested using lottery funds to generate additional revenue, estimating $52 million annually by removing the cash-only lottery ticket purchase requirement.
Additional education funding includes expanded full-day 4K programs, a school resource officer for every school, and sustained in-state college tuition freezes for the sixth consecutive year. The budget also earmarks $80 million from lottery funds for need-based financial aid and proposes a $2 million study to evaluate the future of higher education.
Tax Cuts and Economic Relief
Continuing his push for income tax relief, McMaster proposed cutting the state’s top income tax rate from 6.2% to 6%. This change is expected to save taxpayers $193 million. McMaster attributed the state’s economic surplus to strong fiscal policies and plans to sustain this momentum by reducing the tax burden on residents.
Major Infrastructure and Disaster Relief Investments
Acknowledging South Carolina’s infrastructure and disaster recovery needs, McMaster’s budget allocates significant funding to address these issues:
- Hurricane Helene Recovery: $50 million for road repairs and $40 million to replenish the disaster relief fund.
- New Emergency Assistance Program: $150 million for a South Carolina Public Assistance program to help local governments and nonprofits recover from disasters.
- Infrastructure Improvements: $100 million for bridge repairs and $15.5 million for land preservation and flood mitigation.
McMaster also proposed a feasibility study to explore burying power lines statewide, aiming to improve storm resilience and reduce outages.
Public Safety and Healthcare Initiatives
The budget dedicates $14.5 million to law enforcement pay raises and new hires, along with a $2,000 tax credit for first responders. Another $43.2 million is allocated for corrections officer retention and prison facility improvements. To address healthcare needs, McMaster’s plan proposes $100 million for a neurological hospital to combat high stroke and dementia mortality rates, alongside $95 million in scholarships for technical college students entering high-demand careers.
Environmental and Economic Vision
The governor’s proposal allocates $15.5 million to flood mitigation and conservation efforts. McMaster underscored the importance of these initiatives in safeguarding South Carolina’s environmental and economic future.
Legislative Process and Next Steps
The budget now moves to the House Ways and Means Committee, which will draft its version next month. Both legislative chambers will then negotiate a final plan before submitting it to McMaster for potential vetoes. The new budget is set to take effect in July.
Governor McMaster’s proposal highlights a commitment to advancing education, strengthening infrastructure, and ensuring South Carolina’s economic momentum continues while addressing the state’s pressing challenges.
You can read the entire 2025 SC budget here.
