The South Carolina Senate has begun debating a budget that prioritizes an accelerated income tax cut over the House’s plan to provide homeowners with a one-time property tax rebate. The budget for the next fiscal year, totaling $15.4 billion, includes competing tax break proposals that will need to be reconciled between the two chambers. Senate Finance Committee Chairman Harvey Peeler advocates for the $100 million income tax cut, citing its long-term benefits compared to a one-time property tax rebate. The state is currently in the process of reducing its top income tax rate from 7% to 6%.
The money being considered for the tax breaks comes from a fund intended for property tax relief, which has seen a surplus due to increased spending during and after the COVID-19 pandemic. While the House suggested giving the funds back as a property tax rebate, county officials are concerned about the potential backlash if property tax bills increase the following year. In addition to the income tax cut, the Senate’s plan allocates the $500 million towards infrastructure improvements such as roads, bridges, and water and sewer systems.
Another point of contention that will need to be addressed by the budget conference committee is the proposed salary increases for state employees. The Senate’s plan includes a $1,375 raise for employees making less than $50,000 annually and a 2.75% raise for those earning more. Conversely, the House plan offers a $1,000 raise for workers making less than $66,667 and a 1.5% raise for higher earners. Both chambers agree on increasing teacher pay, with a $200 million allocation that includes raising the minimum salary for starting teachers to $47,000 a year.
The Senate’s budget also includes funding for various initiatives such as $36 million for security and prison improvements at the Department of Juvenile Justice, $11 million for technology to prevent unauthorized cellphones in prisons, and $275 million for new veterinary and medical schools at Clemson University and the University of South Carolina, respectively. Additionally, nearly $5 million will be allocated for a forensic audit to determine the origins and intended use of $1.8 billion in a state Treasurer’s Office account, along with $11.5 million to protect the integrity of the 2024 election and $12.5 million to upgrade election systems.
Senator Peeler emphasized that the Senate’s budget is balanced to address the needs of South Carolina, prioritizing tax relief, public education, and infrastructure. This comprehensive approach aims to address various challenges faced by the state while ensuring fiscal responsibility and accountability. As the budget debate continues, the differences between the Senate and House proposals will need to be reconciled to finalize the spending plan for the upcoming fiscal year. Lawmakers are set to work together to find common ground and make decisions that will best serve the interests of the people of South Carolina.
