Pay raises for teachers and state workers along with tax cuts on homes and incomes are at the heart of a new $13.2 billion state budget that passed Wednesday in the S.C. House of Representatives. The key vote for the 2024-25 spending plan, however, came late Tuesday by a whopping 104-15 approval margin.
“Proud to have passed another House budget that focuses on reducing taxes, repairing infrastructure and retaining teachers and law enforcement!” House Speaker Murrell Smith, R-Sumter, wrote on X shortly after the vote.
Attention now moves to the Senate, where Sen. Tom Davis, a Beaufort Republican on the Senate Finance Committee member, said the Senate’s budget was still early in the process. But broadly speaking, he noted, the GOP-led House and Senate see eye-to-eye on spending priorities.
On the big tax cut in a ‘lean’ year
Beyond the crowd-pleasing pay raises and tax cuts, the House-crafted budget is what members are calling “lean,” with total spending down about $600 million from the current year budget.
This spending restraint was necessary, House budget-writers said, due to a steep decline in non-recurring revenues – primarily, the loss of billions of dollars in temporary federal Covid relief.
Also contributing to the revenue hole – a one-time $500 million dollar property tax cut, funded by surplus sales tax collections. Some, including Gov. Henry McMaster, argued the surplus should be used to fund critical state priorities such as bridge repair and replacement.
But House leaders noted the overage was already committed to property tax relief under Act 388, the 2007 law that raised the state’s sales tax in exchange for reductions in the property tax. In the end, the House opted to preserve the property tax cut and put a smaller amount – $200 million – toward bridge repairs.
Digging into the details
Floor debate on the proposed budget was largely pro forma, with members of the House Freedom Caucus – a breakaway faction of hard-right Republicans – raising now-familiar objections to spending on family planning, the arts and other “non core” government functions.
Freedom Caucus amendments were quickly voted down in a series of bipartisan votes, clearing the way for final passage Wednesday morning.
Among the highlights:
- $200 million for teacher pay raises, including funds to increase the minimum statewide starting salary to $47,000.
- $1,000 pay raises for all state employees making $66,000 or less, with 1.5% raises at higher levels. The state will also cover increases in the cost of employees’ health insurance plans.
- $500 million in one-time property tax relief, and $100 million in permanent income tax cuts.
- $200 million to improve aging bridges across the state.
- $60.7 million to freeze in-state tuition at state colleges and universities.
- $60 million to restructure the S.C. Department of Health and Environmental Control into freestanding agencies.
- $38.1 million for the state Office of Resilience to fight flooding and other natural disasters.
- $13 million for conservation grants to be awarded by the state Conservation Bank.
- $6.8 million for a new, privately-run juvenile detention center to alleviate overcrowding.
- $2.6 million to support pay raises for law enforcement officers, furthering a multi-year investment that State Law Enforcement Division Chief Mark Keel calls “transformative.”
- $1.5 million for a new Statewide Violent Crimes Prosecution Support Task Force to ease the backlog of cases in county solicitors’ offices.
‘This budget is a long way from over’
So now, the question facing Palmetto State teachers, state employees and taxpayers is this: Will those House commitments hold up when the Senate has its say on the budget next month? Or could some be pared back – perhaps even eliminated entirely?
S.C. Education Association President Sherry East told Charleston City Paper that teachers are “carefully watching” the budget process as it moves to the Senate.
“We’re very excited,” East said of the teacher pay hikes, which include a new statewide minimum salary of $47,000. “But you try not to put the cart before the horse, because this budget is a long way from over.”
Davis told Statehouse Report the Senate “shares the House’s commitment to increasing those teacher salaries, if not improving upon what the House did.”
“I think there’s a very strong sentiment over here in the Senate that the best thing we can do to improve student outcomes is to get quality teachers in the classroom,” he said. “And to get quality teachers in the classroom, you’re going to have to pay salaries commensurate with getting the best teachers.”
The Senate is scheduled to debate and pass its version of the budget in April. Members of the House and Senate will then have to negotiate a compromise bill that can pass both chambers – a process that should ideally be complete before the regular legislative session ends on May 9. But with members facing primary elections on June 11, many expect negotiations to extend into a special session later that month.
The state’s 2024-25 fiscal year begins July 1.
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