Governor Henry McMaster Announces FY 2024-2025 Executive Budget

Governor Henry McMaster today announced his Executive Budget for fiscal year 2024-2025. The governor’s fiscally responsible budget sets the stage for South Carolina to continue its record-breaking economic success by providing tax relief and making bold, targeted investments in education, economic development, and public safety.

“South Carolina’s booming economy has once again created a record budget surplus, this year totaling over $1.64 billion in unexpected revenue,” Governor McMaster wrote in a letter to the General Assembly. “By thinking big, by being bold, and by making 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. Let us continue working together. I believe in South Carolina, I believe in America, and I believe the best is yet to come.”

For a copy of the governor’s executive budget, along with his letter to the General Assembly and a detailed explanation of each allocation, click here. For a copy of a presentation outlining the governor’s priorities, click here. For a copy of the governor’s Homestead Exemption Fund letter recommending a $500 million investment in our state’s bridges, click here.

The following executive budget highlights are attributable to Governor McMaster:

Executive Budget Highlights: 

$15 million for SC Nexus 

“SC Nexus is the culmination of groundwork laid in prior years through the collaborative public-private initiatives. Examples of this cooperative spirit include the state’s Electric Vehicle Working Group, which designated a one-stop shop to recruit and assist with electric vehicle investment and manufacturing in the state, as well as the PowerSC Energy Resources and Economic Development Interagency Working Group. This working group, also created by executive order, leads the effort to coordinate the state’s energy stakeholders efforts to develop strategic plans to ensure South Carolina has the energy capacity to meet the needs of future economic development and population growth.

“Recently SC Nexus received the U.S. Department of Commerce’s Economic Development Administration’s (EDA) designation as one of 31 Regional Technology and Innovation Hubs (Tech Hubs), which allows SC Nexus to apply for EDA’s Phase 2 federal funding. Individual Tech Hub grants may be valued between $40-$70 million annually with total funding of approximately $500 million for the next five years. This Executive Budget recommends $15 million to support SC Nexus and serve as the “state” match as required to be eligible for EDA Phase 2 federal funding.”

$50 million for EV Training Institutes 

“To meet this important workforce demand, this Executive Budget recommends $50 million in funds to create or expand ReadySC EV training institutes at our technical college campuses where automotive technology programs exist or are being developed to meet local manufacturing workforce needs.”

$54.3 million Rainy Day Fund 

“State government is in superior fiscal shape. We have the largest rainy day reserve fund balance and the lowest amount of general obligation debt – than at any other time in recent memory.

“Once again, I am recommending the General Assembly set aside sufficient additional funds into the state’s rainy day fund – $54.3 million – so that the fund maintains a balance equal to 10% of the FY2024-2025 General Appropriations Act. As I have stated before, saving this money instead of spending it is something that served our state well during the recent pandemic – and will ensure we will once again be prepared for any future economic uncertainties, should they arise.”

$99 million Income Tax Cut

“Until a few years ago, South Carolina had the highest personal income tax rate in the southeast and the 12th highest in the nation. No more. Two years ago, I signed into law the largest income tax cut in state history. Accordingly, my Executive Budget recognizes this year’s $99 million scheduled cut to the income tax rate, dropping it to 6.3%.”

$500 million for Bridges: 

“There is no infrastructure more in need of investment than our state’s roads, bridges, highways, and interstates. Because our booming economy and rapid population growth have outpaced the state’s ability to keep up with improvements to our transportation infrastructure, we must continue to make big, bold, and transformative investments.

“To that end I am recommending the introduction, debate, and passage of stand-alone legislation that would reallocate no less than $500 million in surplus funds from the Homestead Exemption Fund to the South Carolina Department of Transportation (SCDOT) to be used for emergency bridge replacement and repairs which will benefit all South Carolinians.”

“The 2023 SCDOT Annual Accountability Report highlights the need for additional resources to repair, rehabilitate, and rebuild many of the nearly 9,000 bridges on primary and secondary roads across our state. Many of these bridges are 60, 70, and even in excess of 80 years old and are crumbling before our eyes each day. Too many have been closed, while others are in such a state of disrepair that the required restrictions render them useless for commercial trucking, school buses, or fire trucks needed to serve our state’s increasing population.”

$33 million for Preservation and Conservation

“Economic growth and the preservation of our shared natural heritage and environment are not opposing objectives which must be balanced as in a competition, one against the other. Instead, they are complementary, intertwined, and inseparable, each dependent on the other.

“This year, I am recommending that $33 million be appropriated to the Conservation Land Bank, the Department of Natural Resources, the Office of Resilience, and the Department of Parks, Recreation and Tourism, for the purposes of identifying and preserving culturally or environmentally significant properties, disaster recovery and flooding mitigation efforts as well as beach renourishment projects along our coast.”

$250 million for State Aid to Classrooms, $115 million for Instructional Materials

“My Executive Budget proposes to continue the remarkable progress we have made in raising teacher pay. Seven years ago the minimum starting salary of a teacher in South Carolina was $30,113 and the average teacher salary was below the southeastern average.

“Today, the minimum starting salary of a teacher in South Carolina is $42,500 and the average teacher salary now exceeds the southeastern average. My Executive Budget proposes increasing the starting teacher salary to $45,000 and extending the state minimum teacher salary schedule from 23 to 30 years. My goal by 2026 is a minimum starting salary of at least $50,000.

“Two years ago, South Carolina’s system for funding K-12 education was archaic and confusing, a piecemeal system consisting of 29 separate line-item appropriations. Now, a consolidated formula makes sure that funding follows the child. It keeps pace with student enrollment and provides financial resources to support a state average student-teacher ratio of 11.4 students per teacher with an average teacher salary including fringe benefits of $79,536. This Executive Budget also increases State Aid to Classrooms by $250 million.”

$21.1 million for Full-Day 4K

“Since the statewide expansion of the full-day four-year-old kindergarten program (4K) in school year 2021-2022, enrollment in the program in public schools, private childcare centers, and private schools has increased significantly. Today, 17,437 students are enrolled in the program. Both the South Carolina Department of Education (SCDE) and the Office of First Steps to School Readiness (First Steps) anticipate an additional 2,500 children from low-income households will enroll in the program in school year 2024-25 at a cost of $21.1 million, which has been included in this Executive Budget.”

$30 million for Education Scholarship Accounts

“In addition, this Executive Budget provides $30 million for the Education Scholarship Trust Fund that I was able to finally sign into law last year, thanks to years of hard work by many members of the General Assembly. Starting this year, these funds will allow low-income parents to choose the type of education environment and instruction that best suits their child’s unique needs.”

$95 million for Workforce Industry Needs Scholarships (SC WINS)

“I am requesting that the General Assembly invest $95 million in lottery funds to South Carolina Workforce Industry Needs Scholarships (SC WINS) through the South Carolina Technical College System.

“In the last three years, this very successful program has provided over 32,000 South Carolinians with scholarships to cover the cost of tuition and required fees at any of our technical colleges to earn a post-secondary or industry credential in high-demand careers like manufacturing, nursing, computer science, information technology, transportation, logistics, or construction.”

$49.8 million for Tuition Freeze 

“This Executive Budget marks the fifth consecutive year that I have proposed the General Assembly freeze college tuition for in-state students, with an appropriation to our institutions of higher education of $49.8 million. This represents the 4.5% increase in the Higher Education Price Index (HEPI) for 2023 and is based on the number of in-state students enrolled at each public institution.”

$3 million for Future of Higher Education Study

“This Executive Budget also includes a $3 million appropriation directing the Education Oversight Committee, a nonpartisan committee composed of legislators, educators, and business representatives, to oversee a systemic review of our state’s 33 public institutions of higher education. This study will address the sustainability, accessibility, and affordability, as well as provide an assessment of the need for consolidation of existing physical space, programs, certificates, and degrees offered at our public colleges and universities, as compared to the projected workforce needs of our state in the future.”

$100 million Need-Based Financial Aid

“Also, I propose providing $80 million so that every South Carolinian who qualifies for federal need-based financial aid – as measured by federal Pell Grants – has sufficient state financial assistance to attend any in-state public college, university, or technical college. Students at private, independent, and historically black colleges and universities will receive an additional $20 million for tuition grants and assistance.”

$100 million CHE Lottery Surplus

“According to the Executive Budget Office, the Commission on Higher Education carried forward from FY 2022-2023 to FY 2023-2024 approximately $151.7 million in lottery funds that had previously been appropriated by the General Assembly for scholarships. My Executive Budget recommends allocating $100 million of this surplus as follows: $70 million to the research and four-year colleges for additional need-based grants, for a ninth semester for Palmetto Fellows, HOPE, and LIFE scholarship recipients, or for tuition subsidies for a Maymester or summer class that leads to degree completion; and $30 million to the South Carolina Technical College System for the purchase of high-demand job skill training equipment. These one-time funds should incentivize students to complete their undergraduate degree and enter the workforce sooner.”

$17.8 million Law Enforcement Pay Raise

“Thanks to the comprehensive compensation review conducted two years ago by the Department of Administration, our state law enforcement and criminal justice agencies have begun to stem the tide of personnel loss with recruitment and retention pay raises provided in the previous two General Appropriations Acts. I am proposing that we build on this momentum, by providing an additional $17.8 million for recruitment and retention pay raises in FY 2024-2025.”

$39.5 million for $2,000 Income Tax Credit for First Responders

“I am also once again proposing a $2,000 state income tax credit for every active-duty law enforcement officer, firefighter, first responder, and emergency medical technician employed by a public entity. This nonrefundable tax credit will provide a total of $39.5 million in income tax relief for those who put their lives on the line each day to protect and serve the public.”

$13.4 million for School Resource Officers 

“Placing an armed, certified school resource officer (SRO) in every school, in every county, all day, every day, has been one of my top priorities as governor. At my request, the General Assembly began funding a grant program administered by the Department of Public Safety, to provide school districts with funds to hire more resource officers for our state’s 1,284 public schools. The grant program has been very successful and has more than doubled the number of officers assigned to a school, going from 406 in 2018 to 1,109 in 2023. I am recommending an additional $13.4 million appropriation for the SRO grant program in FY 2024-2025. This will add an officer in 175 existing and new schools currently without an assigned SRO.”

$10 million for Homelessness Pilot Project 

“To meet the growing demand for mental and behavioral health services, I am recommending an allocation of nearly $10 million to the Department of Mental Health for a public-private partnership with the City of Columbia and Richland County to pilot a comprehensive resource center with wraparound services to reduce homelessness in the Columbia area. Proposed by Columbia Mayor Daniel Rickenmann, this project is based upon a model used in the Houston, Texas metropolitan area. After a dozen years of this model, Houston saw a 64% reduction in homelessness and an astounding 17% decline in 2023 alone. If this model proves successful, it could be replicated in other communities in our state.”

$81.3 million for Veterans Nursing Homes 

“This Executive Budget recommends a $76 million appropriation to the South Carolina Department of Veterans Affairs for the operation, maintenance, repair, and renovations of the state veterans nursing homes and to provide the state financial match requirements to construct a new veterans nursing home in Lexington County. In addition, a $5 million appropriation is recommended to fund repairs to the Stone Veterans Pavilion in Columbia, which will continue to be operated by the Department of Mental Health until 2025.”

$107 million for State Health Plan, $26.2 million for Employee Recruitment and Retention

“Our booming economy sometimes puts state agencies at a disadvantage with the private sector – when they are recruiting employees or trying to retain good employees. My Executive Budget provides state agencies with $26.2 million to recruit and retain critical state agency personnel and recommends $107 million for the State Health Plan to offset inflationary healthcare cost increases so that there will be no increase in premiums for participants or employers like school districts, counties, and state agencies.”