Columbia, South Carolina – This year, South Carolina legislators are dealing with a budget surplus of over $500 million, yet they are divided on how best to use this extra money. Both potential plans they are considering aim to benefit taxpayers, but the specifics—such as which taxpayers and to what extent—remain subjects of debate. The Senate Finance Committee has recently passed a budget proposal for the upcoming year, which now moves on to be discussed by the entire Senate. Central to their plan is the distribution of $600 million from the surplus.
The majority of this surplus is proposed to be spent on tax reductions and infrastructure improvements. Specifically, $100 million is planned to be used to hasten the reduction of South Carolina’s highest income tax rate, a change that was previously approved.
An additional $200 million is earmarked for local transport projects, while $117 million would be invested in improving rural roads. Furthermore, $100 million is designated for bridge repairs, and $30 million would support enhancements to water and sewer systems in rural areas. Another $53 million is intended to fund the expansion of the University of South Carolina’s health campus in Columbia.
“The governor, in his plan, he put, was it $400 million, $500 million into bridges, so it’s the best parts of the governor’s plan, a better part with the Senate plan over the House plan for this tax reduction,” Finance Committee Chair Sen. Harvey Peeler, R-Cherokee, said.
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The House has decided to allocate $500 million of the surplus funds specifically to aid homeowners. In the budget that has already been approved by the entire House, this substantial amount is set aside for one-time property tax credits, which are expected to average about $360 per homeowner.
“We believe that what we should do is honor that promise to taxpayers that when those dollars came in and they were accumulated and ready, we could distribute them back for owner-occupied property tax relief, House Ways and Means Committee Chair Bruce Bannister, R-Greenville, said. “We believe that’s important to keep our word to the taxpayers to send that money back.”
Although the House has passed this budget plan, the Senate will consider its own version in the coming weeks. The final decision on how to utilize the surplus will be made later, when a select group from both chambers meet to reconcile their differing proposals before sending a final plan to the governor. This discussion on the surplus is not the only potential budgetary conflict. The House and Senate are also at odds over the size of the salary increase for state employees and an issue that caused debate last year: the funding for Clemson University’s new veterinary school.
