{"id":2408,"date":"2026-06-30T09:36:26","date_gmt":"2026-06-30T09:36:26","guid":{"rendered":"https:\/\/usmovingexpertss.com\/?p=2408"},"modified":"2026-06-30T09:36:26","modified_gmt":"2026-06-30T09:36:26","slug":"sc-to-start-spending-year-without-budget-in-place-what-it-means-for-taxpayers","status":"publish","type":"post","link":"https:\/\/usmovingexpertss.com\/?p=2408","title":{"rendered":"SC to start spending year without budget in place. What it means for taxpayers"},"content":{"rendered":"
<\/p>\n

When South Carolina begins its next fiscal year Wednesday, the state government won\u2019t have a new budget to direct agencies how to spend money.<\/p>\n

Read more SC judge sets trial date for Murdaugh murder retrial at hearing \u2013 as it happened<\/a><\/p>\n

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But it doesn\u2019t mean the state government will shut down.<\/p>\n

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Lawmakers earlier this year adopted a continuing resolution, a de facto insurance policy which keeps spending levels the same as the previous budget year. House and Senate budget writers have yet to agree on a final spending plan for the upcoming fiscal year. The Senate . The House put together .<\/p>\n

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With no new budget in place, it means state employees don\u2019t receive planned 2% raises that both chambers have voted on and money for one-time projects can\u2019t be dolled out. State colleges and universities won\u2019t receive additional money to keep tuition rates frozen.<\/p>\n

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School districts who have been counting on additional money to give teachers raises also won\u2019t immediately get it. However, that pressure may not grow louder until August when the school year begins.<\/p>\n

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Members of a six-member budget conference committee, charged with hammering out a final spending plan for the fiscal year that begins July 1, 2026, and runs through June 30, 2027, are scheduled to meet Tuesday.<\/p>\n

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In addition to finding consensus on how much to spend, they need to come to an agreement on more than 80 provisos, or one-year laws, attached to the annual budget. Among those provisos are whether to require school districts to implement mobile panic alert systems, whether the Department of Public Health sets up a statewide firefighter occupational health program in coordination with the State Fire Marshal, and whether the state should study privatizing its welcome centers.<\/p>\n

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A key sticking point on the budget will be whether to include an expansion of the homestead exemption to cut property taxes for seniors. The Senate has passed the bill and planned for it in its budget proposal. The House has not adopted the expanded homestead exemption.<\/p>\n

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The House has been reticent as the legislature already is cutting state income tax as part of a plan to eventually phase out that revenue stream.<\/p>\n

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Including a property tax cut as well would be such a large reduction to the state\u2019s revenue in one year.<\/p>\n

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Lawmakers earlier this year adopted an income tax reform package that aims to phase out state income tax over the course of years, as long as revenues to the state remain high enough. It immediately reduces the top income tax rate to 5.21% from 6% and cuts $308.7 million from state revenues. Coming up with that package took two legislative years to complete and discussions behind the scenes among budget writers and leadership.<\/p>\n

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Expanding the state\u2019s senior homestead exemption would cost about $247 million.<\/p>\n

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House members have indicated they want to tackle property taxes next year.<\/p>\n

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In April, House Ways and Means Chairman Bruce Bannister indicated a similar concerted effort would be necessary and to look at property taxes from a holistic approach.<\/p>\n

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\u201cI think the way that people in South Carolina can have real property tax reform is for this same group to get back together and figure out where we want to end up, and then the best way to get there,\u201d Bannister said.<\/p>\n

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\u201cIt\u2019s obviously more complicated, because a lot of that\u2019s driven by local governments, but it\u2019s also something that we have the ability to make it better for the citizens,\u201d he added.<\/p>\n

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Delays in negotiations<\/h2>\n

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The budget conference committee stated a couple of weeks later than originally anticipated as the legislature battle over whether the state should redraw its congressional districts, an effort that took up the state\u2019s attention for more than two weeks and ultimately failed in the state Senate. After the committee met for the first time on June 2, it held off on meeting again until the primary and runoff elections concluded.<\/p>\n

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\u201cThat\u2019s kind of taken the air out of the room while we were working, but now we\u2019re ready to go to work, and continue to work,\u201d Senate Finance Chairman Harvey Peeler said on the Senate floor Thursday.<\/p>\n

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He added the committee is \u201cvery close.\u201d<\/p>\n

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Peeler and Bannister have been in discussions in recent weeks behind the scenes along with key staff members.<\/p>\n

Read more Rejected Rosewood liquor store plan returns; owner wants student apts next door<\/a><\/p>\n

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Budget writers have been debating what to do with used debt service money. Every year, about $154 million is budgeted to pay back loans taken out by the state. However, only $21 million in debt service payments are expected in the 2026-27 fiscal year, and $23 million the following year.<\/p>\n

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The Senate wants to make $117 million of unused debt service to go back into the pot of annual money, reducing the annual set aside to about $36 million. It would help pay for the property tax cut. The Senate also uses $120 million in surplus sales tax money kept in a homestead exemption fund to help pay for the property tax cut.<\/p>\n

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The House want to allow the Department of Natural Resources and the Department of Transportation to have access to the unused debt service money to pay for more than $130 million in Scout Motors site overruns, which would be a one-time cost. The Senate didn\u2019t put money in for the Scout site work.<\/p>\n

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Other differences in spending plans<\/h2>\n

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How much to spend on Medicare and Medicaid and home health services also is different. The House proposed $183 million, the Senate only proposed $142.6 million.<\/p>\n

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Another difference is money for state employees. Although both spending plans call for a 2% raise for state employee and making sure those on state health plan don\u2019t see a premium increase next year, the House spending plan doesn\u2019t pay for it. It frees up about $103 million. However, the House made that move to set up its budget for conference committee negotiations as the<\/p>\n

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Parts of the proposed spending plan also could have gotten wrapped up in primary election politics. Money to settle the Captain Sam\u2019s Spit lawsuit was approved in the House budget, but not the Senate. It had been pushed for by Attorney General Alan Wilson, who is running for governor, and criticized by lawmakers supporting other campaigns for governor.<\/p>\n

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Peeler also said earlier this year he\u2019s against the settlement.<\/p>\n

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The Senate included $5 million to SC State University to replace a convocation center, which led to objections from Lt. Gov. Pamela Evette and her supporters after the school rescinded an invitation for her to speak at this year\u2019s commencement ceremonies in response to student protests.<\/p>\n

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Both budgets include $35 million for farm assistance, but differ on where the money comes from. The Senate wants to take the money away out of the Department of Commerce.<\/p>\n

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Among the spending the conference committee will have to resolve is how much money will they include for lawmaker pet projects, considered community investment projects but more commonly referred to as earmarks.<\/p>\n

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Senators directed more than $130 million worth of earmarks in their budget. House members included. As negotiations take place, budget writers may have to decide on whether to scale back the number projects included in the spending plan and which ones to remove.<\/p>\n

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No earmarks were included in last year\u2019s budget process.<\/p>\n

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Budget writers said they hoped a spending plan would be finalized soon, but acknowledged the state will be operating under a continuing resolution for at least a few days until a new budget is finally in place.<\/p>\n

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After the budget writers agree on a final spending plan, it still needs to be approved by the General Assembly, which might be a challenge if the chambers struggle to have enough members available to return to Columbia at a time they weren\u2019t expected to be in session and may be on vacation.<\/p>\n

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\u201cAt this time of year, it\u2019s difficult to bring people in because you\u2019re not going to have the numbers, and again, that\u2019s not a criticism of anybody. This is when everybody\u2019s planning to be out of town,\u201d Senate Majority Leader Shane Massey told reporters Thursday.<\/p>\n

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But what could help get General Assembly members back? The $1,000 monthly in-district compensation lawmakers receive to pay for expenses within the district. That expires June 30 without a new budget being adopted.<\/p>\n

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After an agreed upon budget is approved by both chambers and sent to the governor\u2019s office, Gov. Henry McMaster would have five days, not including Sundays to sign the spending plan and issue any line-item vetoes.<\/p>\n

Read more Columbia man killed when car crashes into truck on I-26, SC coroner says<\/a><\/p>\n

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