STATEHOUSE REPORT | ISSUE 24.04 | Jan. 24, 2025
BIG STORY: Post-Covid surplus budgeting continues
MORE NEWS: State auditor resigns amid scandal, probe
LOWCOUNTRY, Ariail: Marching in lockstep
BRACK: S.C. doesn’t need new place for Mace
MYSTERY PHOTO: Snowy scene
FEEDBACK: Thanks for your sparks of thinking
Post-Covid surplus budgeting continues
By Jack O’Toole, Capitol bureau | As the S.C. General Assembly convened for its 2025 legislative session on Jan. 14, Gov. Henry McMaster continued the longstanding gubernatorial tradition of greeting lawmakers with an executive budget plan touting his spending priorities for the year ahead. This year sounded much the same — higher teacher pay, income tax cuts – but also included disaster relief for victims of Hurricane Helene.
But the continuation of a more recent budget tradition caught the eyes of some good government advocates — namely, the existence of yet another “surplus” of almost $2 billion in last year’s “unexpected revenues” for lawmakers to dole out in one-time expenditures as they construct the spending plan for 2025-26.
Critics say the emergence of large surpluses in the post-Covid era — ranging from a low of $1.6 billion in 2024 to almost $4 billion the year before — seem to be more the result of overly conservative budget projections than unexpected economic growth. As a result, they contend, the “found money” too often winds up financing short-term political priorities, rather than disciplined, long-term investments in areas like education and health care.
“The state has so many needs and this surplus isn’t genuine,” S.C. League of Women Voters Vice President Lynn Teague told Statehouse Report. “This is money that needs to be used [for critical programs].”
S.C. Education Association President Sherry East echoed Teague’s concerns about the process.
“You’ve got state workers, teachers, public employees, and they’re really hurting,” East said. “With more accuracy in the projections, [lawmakers] could make a long-term commitment to educators and firefighters and police officers in the budget.”
Nevertheless, East noted that teachers are “grateful” for lawmakers’ ongoing efforts to raise their pay, particularly in poor, rural counties — one of several funding commitments McMaster’s executive budget seeks to address in 2025.
Here are some highlights from the governor’s $13 billion spending plan.
Education
When McMaster became governor in 2017, he called on the legislature to raise the state’s minimum teacher salary from $30,000 to $50,000 by 2026. In his executive budget, he earmarks $200 million to reach that goal one year early, raising the floor from its current level of $47,000.
“South Carolina’s future prosperity requires that we continue the remarkable progress we have made in raising teacher pay,” McMaster wrote in a Jan. 13 letter to lawmakers.
In addition to raising teacher pay, other education spending priorities include:
- $30 million in public tax dollars for a still-undefined private school voucher program – far less than the current S.C. Senate proposal of $130 million.
- An additional $2.8 million for the state’s 4-year-old kindergarten program, allowing it to increase enrollment by 7%.
- $21 million to add 177 new school resource officers, which would complete the goal of placing an SRO in every public school.
- $30 million to maintain the now six-year freeze on tuition at state colleges and universities.
- $95 million in lottery funds for SC WINS, a skills and training scholarship program at S.C. technical colleges.
- $2 million for a systemic review of the state’s 33 institutions of higher education, in preparation for lower enrollments as the number of college-aged Americans declines.
Disaster relief
Last September, Hurricane Helene cut a path of destruction through the Palmetto State that left 49 dead, damaged 6,300 homes, destroyed 10 bridges and left more than a million residents without power for days. To help recoup some of the economic losses, McMaster’s budget allocates more than $200 million for disaster relief, including:
- $150 million to create a state disaster recovery grant program for local governments, public utilities and nonprofits whose relief applications were either denied by the federal government or did not meet federal FEMA requirements.
- $50 million to the S.C. Department of Transportation (SCDOT) for unreimbursed costs associated with the storm, including debris cleanup and repairs to roads and bridges.
- $40 million to replenish the coffers of the state’s two principal disaster reserve funds, which were drawn down in the immediate aftermath of the storm.
- A new budget provision requiring the Office of Regulatory Staff to study the economic and technical feasibility of undergrounding power lines, which many believe would reduce the incidence of widespread power outages during extreme weather events.
Law enforcement
In his letter to lawmakers, McMaster calls on the legislature to authorize major new spending on law enforcement, arguing that “to keep our citizens safe, we must maintain a robust law enforcement presence – and properly ‘fund the police.’” That spending includes:
- $43 million in new appropriations for the state Department of Corrections to hire new officers, increase medical and mental health services, provide pay raises and cover the costs of deferred maintenance at all 21 state prisons.
- $43 million to provide a $2,000 nonrefundable tax credit to all active-duty police officers, firefighters, first responders and emergency medical technicians.
- $14.5 million to increase pay and hire additional law enforcement officers.
- $500,000 for the S.C. Law Enforcement Division to step up enforcement of state laws against animal fighting.
Income tax cuts and more
Beyond these major areas, McMaster’s budget wish list includes a number of significant line-item expenditures, including a reduction in the state’s top income tax rate from 6.2% to 6% at a cost of $194 million. But GOP leaders in the legislature have said their goal is to get the rate down “below that of our neighbors,” which would appear to mean cutting it beneath North Carolina’s current rate of 4.5%. That’s an idea McMaster says he supports in principle, though neither he nor lawmakers have yet presented a plan to pay for it.
Other noteworthy line-items in McMaster’s budget include:
- $112 million to cover increased costs in the state employee health care plan, along with a request for a study of ways to reduce program expenses in the future.
- $100 million for the S.C. Department of Health and Human Services to help build a new neurological hospital operated by the University of South Carolina.
- $100 million for SCDOT to repair and replace an undefined number of the state’s 9,000 bridges — more than 10% of which have been classified as structurally deficient.
- $15.5 million for the Conservation Land Bank, the Department of Natural Resources, the Office of Resilience, and the Forestry Commission to identify and secure undeveloped land for permanent preservation.
- $13.7 million to hire the additional personnel required to cut the state’s environmental review process down to 90 days or less.
McMaster concluded his budget message on an optimistic note.
“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,” he wrote.
The General Assembly is expected to formally begin the 2025-26 budget process in February.
- Have a comment? Send to: feedback@statehousereport.com.
State auditor resigns amid accounting scandal, federal probe
By Jack O’Toole, Capitol bureau | A second high-ranking state official has resigned amid a multibillion dollar accounting scandal that’s drawn the ire of state legislators and the attention of federal investigators.
State Auditor George Kennedy submitted his resignation Jan. 23 in a letter to the state’s fiscal oversight board, chaired by Gov. Henry McMaster.
“It has been both an honor and a privilege to serve the State of South Carolina during the past nine years,” Kennedy wrote. “However, I believe that it is in the best interest of the Office of the State Auditor that I resign from my position as State Auditor effective today.”
The move comes after an outside forensic accounting firm reported on Jan. 15 that Kennedy, state Treasurer Curtis Loftis and former state Comptroller General Richard Eckstrom, who resigned last March, each bore some responsibility for more than $5 billion in mismanaged and misstated funds.
Federal investigators with the U.S. Securities and Exchange Commission are now probing whether those errors misled investors about the state’s fiscal condition.
For his part, Loftis, who previously announced he was not running for reelection next year, chose not to address the larger questions raised by the resignation. Loftis continues to face calls to resign.
“I would like to thank George Kennedy for his 10 years of public service to the state of South Carolina and wish him well,” Loftis said in a statement. “We will continue to support the State Auditor’s Office during this transition.”
Lawmakers are considering several proposals to reform the state’s fiscal management system and are expected to move forward with legislation before the current session ends in May.
Gadsden to lead state’s probation and parole agency
Gov. Henry McMaster has tapped Jake Gadsden Jr. to lead the S.C. Department of Probation, Parole, and Pardon Services.
Gadsden, a North Charleston native, currently serves as deputy director for programs, reentry and rehabilitative services for the S.C. Department of Corrections (SCDC). According to the SCDC website, he joined the agency in 2019 as a warden after almost 30 years of corrections’ experience in Massachusetts and Rhode Island.
A resident of Chapin, Gadsden holds a bachelor’s degree in criminal justice from the University of South Carolina and completed a management training program at the Harvard University School of Government.
“I am so grateful for this opportunity,” Gadsden said in a statement. “Like SCDC, the Department of Probation, Parole and Pardon Services is often overlooked, but the work is just as important. We are all trying to do the same thing by helping these individuals rebuild and letting their families have a better life.”
DNC chair forum to be held in Charleston
The race to replace South Carolina native Jaime Harrison as chair of the Democratic National Committee will run through Charleston tonight, with a 6 p.m. candidate forum at the American Theater on King Street.
Members of the public are invited to watch the forum on the S.C. Democratic Party’s YouTube channel.
Candidates expected to attend include former Maryland Gov. Martin O’Malley, Minnesota Democratic Farmer-Labor Party State Chair Ken Martin, Wisconsin Democratic Party State Chair Ben Wikler, political strategist Jason Paul, former Arkansas congressional candidate Quintessa Hathaway and homeland security professional Nate Snyder.
The new chair will serve as chief fundraiser and head cheerleader for the party as it navigates the next four years under new President Donald Trump.
Harrison, a native of Orangeburg, led the party through the successful midterms of 2022, the last-minute Biden-to-Harris nominee switch of 2024 and, ultimately, the loss to Trump last fall.
But despite that loss, Harrison says he’s proud of the work he helped make possible under President Joe Biden.
“Over the last four years, I have had the honor of serving as the Chair of the Democratic National Committee under the most effective President in my lifetime,” Harrison said in a Jan. 15 statement. “From his historic and record breaking appointments of people of color and women to the judiciary to his changes to the Democratic presidential primary calendar elevating communities that have been historically relegated to the sidelines, Joe Biden has seen us, heard us, and most importantly fought for us – all of us.”
The vote for party chair will take place Feb. 1 at the DNC winter meeting in National Harbor, Maryland.
In other recent news
S.C. taxpayers’ cost of fixing $1.8B accounting blunder could keep growing. A Senate budget committee wants to repurpose $1.2 million from the current state budget to hire an outside financial supervisor in an effort to stave off sanctions from the Securities Exchange Commission, which for the past year has been investigating the state’s financial agencies.
Bill requiring lab-grown food to be clearly labeled advances in S.C. A bill mandating the clear labeling of lab-grown food sold in South Carolina advanced Thursday to the Senate floor.
S.C. Senate sees a new portrait. Senators unveiled a new portrait of former Democratic S.C. Sen. Nikki Setzler of Lexington County on Wednesday. Setzler served in the Senate for 48 years before retiring in 2024.
Santee Cooper looking for buyers to restart failed nuclear project. The state-owned utility is soliciting proposals from private companies to take over the partially-built V.C. Summer reactors that were abandoned in 2017 at a cost of $9 billion to ratepayers.
S.C. power cooperatives approved for $500M in clean energy funds. South Carolina’s power cooperatives received $500 million in federal grants and zero-interest loans to help cover the cost of solar and nuclear energy for their nearly 2 million customers over the next two decades.
S.C. lawmakers consider ‘overhaul’ law to change DUI cases. The South Carolina Senate will consider a law intended to “overhaul” what actions are taken when a person is convicted of driving under the influence, or impaired driving.
McMaster wants debit card sales for lottery tickets. Gov. Henry McMaster is proposing the use of debit cards to purchase lottery tickets, but his support, and that of other Republican leaders, may receive pushback from some members of the Legislature over the notion it makes it too easy to gamble.
S.C. leaders react to Trump’s inauguration. In ruby red S.C., President Trump was greeted with statements of joy and congratulation by state leaders.
Biden spends last full day in office in S.C. President Joe Biden spoke at a North Charleston church and a Charleston museum on his last full day in office. Why? To say “thank you” to South Carolina, which he reflected “brought me to the dance.”
Marching in lockstep
Award-winning cartoonist Robert Ariail has a special knack for poking a little fun in just the right way. This week, he takes on the impact of a Republican supermajority in the S.C. Senate and S.C. House.
- Love it or hate it? Did he go too far, or not far enough? Send your thoughts to feedback@statehousereport.com.
South Carolina doesn’t need new place for Mace
Commentary by Andy Brack | The worst news of the week for South Carolinians was that media-craving GOP U.S. Rep. Nancy Mace of Mount Pleasant is “seriously considering” running for governor in 2026.
If this political trial balloon were to become a reality, it would be a disaster for the Palmetto State. Instead of people from outside of the state chiming old slogans like the classic “Smiling Faces, Beautiful Places” or the dull “Launch to Legacy” from 2024, Mace surely would insist upon a new slogan, “Look at me! Look at me!” Instead of Nikki Haley’s, “It’s a Great Day in South Carolina,” state employees surely would be asked to answer phones, “Hello from South Carolina where Nancy Mace is governor.”
And then there would be the narcissistic publicity stunts like she recently pulled in Washington to ban transgender women from using women’s bathrooms in the U.S. Capitol or U.S. House office buildings. It was a clickbait way to get attention for what’s really a political nothing – a Seinfeldian ploy to get cameras turning her way for something that didn’t really matter (don’t women’s bathrooms have stalls and privacy doors?).
What you don’t hear in the Associated Press interview is why Mace, who early on made a name as the first woman to graduate from The Citadel, would even want to be governor – especially since the national media she so craves is in Washington, D.C. Perhaps it’s because she’s just one of 435 members of Congress and, as governor, she could be at the top of the state’s political heap.
But rather than talking about helping people, she talks about the mechanics of politics and whether she’ll get the support she needs from new President Donald Trump.
“We are seriously considering a statewide run for governor in 2026,” Mace said in a story published Wednesday.
Hmmm. The imperial “we.”
“I’ve acquired the leadership necessary to be bold, to make sure that we are moving forward with conservative policies. I have made a difference in the work that I have done up here, and know that I could do even more at the state level.”
Well, we are glad you think so much of yourself. But there’s more:
“But this is a time and a moment in history where we need strong leadership. And everyone I’ve heard of, every name I’ve heard, they’re all nice people, but they don’t have that ability to kick ass and take names and make some of the tough decisions that are going to be needed to move our state forward.”
Those mentioned as possible candidates include longtime, kind-of-dull S.C. Attorney General Alan Wilson and Lt. Gov. Pamela Evette, who most people still really haven’t heard of.
So what you really have here is a viper who sees a chance to strike. You’d think that Mace would want to take on U.S. Sen. Lindsey Graham, the state’s top Republican who has political issues with the uber-conservative MAGA base despite $15 million in campaign cash in the bank. But Mace ran for Senate once and failed miserably. She surely thinks running as a spark in a lackluster field suits her better – especially when she can come up with new and exciting stunts every day on the campaign trail.
For those of you not in South Carolina too long, we had a recent governor who made a name for himself with stunts – yep, Appalachian Trail-loving Mark Sanford. In one 2005 publicity blitz, he used a horse-drawn carriage outside the Statehouse to illustrate how state government needed to be brought into the modern age.
In another in 2004, he employed the use of two piglets, “Pork” and “Barrel,” to highlight the need to control unnecessary spending. How’d that work out? The pigs defecated on Sanford’s pretty blue jacket.
And that shows the value of manufactured stunts and outrage, which Mace has in buckets.
Mace’s name is perfect for political rhymes. Perhaps the best for 2026: No space at top for Mace.
Andy Brack is editor and publisher of the Charleston City Paper and Statehouse Report. Have a comment? Send to: feedback@statehousereport.com
Snowy scene
With all of the snow that blanketed the eastern half of the state this week (and kept kids out of school for three days during a long thaw), we thought it would be appropriate to share this possibly tough photo as a mystery. Where is it? What’s the building? Send your name, hometown and guess to: feedback@statehousereport.com.
Our most recent mystery, “Another old white house” is historic, as Elizabeth S. Jones of Columbia explains: “This week’s mystery photo shows the Lynch House, also known as Fairfield Plantation in McClellanville, Charleston County, SC. Built around 1730, it is significant as the home of Thomas Lynch Jr., a signer of the Declaration of Independence.”
Congrats to others who identified the house: Allan Peel of San Antonio, Texas; David Lupo of Mount Pleasant; Frank Bouknight of Summerville; Jay Altman of Columbia; Pat Keadle of Perry and Don Clark of Hartsville.
- Send us a mystery picture. If you have a photo that you believe will stump readers, send it along (but make sure to tell us what it is because it may stump us too!) Send to: feedback@statehousereport.com and mark it as a photo submission. Thanks.
Thanks for your sparks of thinking
To the editor
It’s amazing that Mr. Brack’s recent call for common sense and a better understanding of what democracy and the rule of law mean to our country even needed to be written.
I am glad to hear him refer to some S.C. politicians who may have had enough of the current MAGA nonsense, and who seem to be applying some principles to their thinking about tax reform. (Why is the revenue half of the budget seldom considered when budget time rolls around?) I wish this nation were not displaying such an overwhelming amount of selfishness and disregard for the realities of paying for a good life.
Yes, the amenities of a First World life require tax support that benefits the whole. The wealthiest can and should pay more, in the interest of a healthy society. And, really, we are past time needing some tax policy reform that addresses wealth inequalities in our state and in our nation. That will not happen with MAGA forces in charge. But until our politicians have a change of heart and budget, I appreciate sparks of thinking, lights of concern for the whole of society, wherever I find them. I found them in this piece. Thank you.
– Carol Brown, Beaufort
Send us your thoughts
We encourage you to send in your thoughts about policy and politics impacting South Carolina. We’ve gotten some letters in the last few weeks – some positive, others nasty. We print non-defamatory comments, but unless you provide your contact information – name and hometown, plus a phone number used only by us for verification – we can’t publish your thoughts.
- Have a comment? Send your letters or comments to: feedback@statehousereport.com. Make sure to provide your contact details (name, hometown and phone number for verification. Letters are limited to 150 words.
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Statehouse Report, founded in 2001 as a weekly legislative forecast that informs readers about what is going to happen in South Carolina politics and policy, is provided by email to you at no charge every Friday.
- Editor and publisher: Andy Brack, 843.670.3996
- Statehouse bureau chief: Jack O’Toole
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