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Gov. Henry McMaster Unveils Fiscal Year 2018-19 Executive Budget 

Proposes Income Tax Cut that, in Five Years, will Save Taxpayers $2.2 Billion 

1/8/2018 

COLUMBIA, S.C. – Governor Henry McMaster today announced the FY 2018-2019 Executive Budget – a balanced budget that prioritizes taxpayer savings in the form of an income tax cut that, in its first five years of implementation, will result in $2.2 billion of taxpayer savings. All while investing in important areas of need such as public safety, workforce readiness, K-12 education, and access to healthcare.

To view the governor’s Executive Budget in its entirety, along with the governor’s cover letter and detailed explanations of the points below, visit his website here.

Budget Highlights:

Tax Relief

Recognizing that the quickest way to stymie South Carolina’s growing economic prosperity is to unduly overtax and overregulate our people, Governor McMaster’s executive budget proposes two bold tax reform initiatives that will keep more money in the pockets of every South Carolinian.

  • A 1% rate reduction over five years for all personal income tax brackets, which will result in $2.2 billion in taxpayer savings through the course of implementation, starting with an immediate $139 million cut that is certified in this budget;
  • An immediate and full retirement income exemption for military veterans and first responders, including retired state and federal law enforcement, firefighters and peace officers, representing $22 million in relief the first year.

Economic Development & Workforce

By any objective economic measure, South Carolina is succeeding. In 2017 alone, we announced more than 17,200 new jobs from over 120 economic development projects, with $4.78 billion in new capital investment – beating 2016 by more than $1 billion and over 5,000 jobs.

By investing in continued economic development efforts and our future workforce, Governor McMaster’s Executive Budget serves as a recognition that our continued economic success is dependent on developing an ever-evolving workforce that is ready and willing to meet the needs of a global, 21st century economy.

The governor’s investments geared towards fostering South Carolina’s continued economic growth include:

  • An additional $11,950,000 to the Department of Commerce to maintain and expand upon South Carolina’s strong economic development trajectory;
  • $9,432,046 for readySC to continue its workforce development efforts;   
  • $5,000,000 for the creation of the South Carolina Workforce Partnership, establishing relationships between technical schools, high schools and business for workforce development programs;
  • $3,000,000 for Workforce Scholarships and Grants to provide need-based financial assistance at our state technical schools;
  • $950,000 for the “Be Pro Be Proud” workforce initiative;
  • $900,000 for expansion of workforce training and reentry programs at the Department of Juvenile Justice (DJJ) and the Department of Probation, Parole and Pardon Services (PPP).

Education

If South Carolina is to remain competitive for future economic development and investment, then students from all 46 counties must be ready to compete. Improving education outcomes requires a number of structural and operational reforms.

The Superintendent of Education should be made a cabinet-level position appointed by the Governor to bring accountability to the education delivery system. South Carolina is fortunate to have an outstanding Superintendent in Molly Spearman who supports school choice and reform, but the state has not always been so lucky, and when the governor’s vision for education does not align with that of the Superintendent it creates dysfunction in the state education system. Last year, legislation advanced in the General Assembly that would have made this change; seeing it across the finish line will be one of Governor McMaster’s top priorities in 2018.

The governor’s investments in education include:

  • $25,182,795 for base student cost ($10 increase/student) at K-12 public schools;
  • $18,808,341 in per pupil funding increases at S.C. charter schools (5% per pupil funding increase at $5,684,042 plus $13,124,299 to accommodate enrollment growth);
  • $16,432,471 for need-based higher education scholarships;
  • $5,000,000 for the South Carolina School Safety Program;
  • $5,000,000 in recurring funds for school bus leasing, which doubles existing recurring funds;
  • $3,100,000 for computer science and coding classroom instruction; 
  • $2,500,000 for charter school transportation pilot program;
  • $500,000 for Clemson University’s Call Me MISTER teacher retention and recruitment program

Public Safety

During his first year in office, Governor McMaster demonstrated an unwavering commitment to South Carolina’s law enforcement community and to the public safety they provide our communities. That commitment remains true in this Executive Budget – allocating funds that will help verify every South Carolina municipality’s compliance with existing “sanctuary city” laws and committing significant investments in each of the state’s law enforcement agencies. Other investments include:

  • Establishes the position of “immigration compliance recorder” within the South Carolina Law Enforcement Division (SLED);
  • Moves South Carolina’s Immigration Enforcement Unit from the Department of Public Safety (DPS) to SLED;
  • Provides for two additional immigration officers at SLED;
  • Funds plans developed by SLED under the SC Critical Infrastructure Cybersecurity Program designating $667,150 for new personnel, as well as $242,000 to incorporate the South Carolina National Guard;
  • Commits $600,000 in recurring dollars to fund the South Carolina Military Base Task Force;
  • Provides additional funding increases in the following areas:
    • $30,552,513 for SLED, to include $2,133,114 in funding for personnel and supplies to reduce backlogs at the SLED forensics laboratory, $484,416 for new vice personnel to respond to the ongoing opioid crisis and $20,000,000 towards a new, $52,000,000 forensics laboratory;
    • $13,977,361 for the Department of Corrections, to include $4,999,374 for officer hiring and retention;
    • $2,882,751 for the Department of Probation, Parole & Pardon Services, including $1,146,080 to lease new vehicles from State Fleet Management and $863,408 for expansion of the Offender Supervision Specialist (OSS) Program;
    • $2,524,797 for the Department of Public Safety, to include $2,025,000 for overtime pay at the South Carolina Highway Patrol and $499,797 for modern rifles;
    • $1,514,958 for the Department of Juvenile Justice, to include $1,014,958 for officer hiring and retention.

Healthcare

Improving the health and well-being of all South Carolinians is a top priority of Governor McMaster’s. Obamacare was an unprecedented encroachment on state sovereignty; ill-conceived federal mandates undercut the states’ ability to innovate and adopt approaches tailored to their needs. The cost increases resulting from this top-down, one-size-fits-all approach have resulted in higher insurance premiums and rising health care costs.

As the health care debate in Washington continues, Governor McMaster will work with state agencies to ensure we have a stable regulatory framework that is ready and able to meet our health care challenges head-on, while addressing some of the pervasive problems that place strain on the system. This includes the ongoing opioid crisis, finding new means of effectively treating those with autism, and providing reliable health care to children and the most vulnerable. Investments include:

  • Over $10 million in new state funding for treatment, prevention and education efforts to combat the ongoing opioid crisis, including:
    • $4,350,000 to the Department of Health and Human Services (DHHS) for new opioid treatment clinics throughout the state;
    • $1,250,000 to the Department of Alcohol and Other Drug Abuse Services (DAODAS) for enhanced response to opioid use disorder;
    • $3,000,000 for infrastructure improvements to the DAODAS 301 System;
    • $1,000,000 to the Department of Health and Environmental Control for prescription drug monitoring;
    • $484,416 for new vice personnel at SLED for augmented opioid response;
  • $3,848,880 for targeted rate and service increases for autism therapy, constituting a minimum 40% increase in the provider reimbursement rate;
  • $7,030,749 for Department of Mental Health, including:
    • $250,000 for school-based services;
    • $512,728 for the Sexually Violent Predators Program,
    • $2,000,000 for the Campbell Veterans Nursing Home;
    • $1,852,294 for other support, including the DMH Deaf Services Program, the Alzheimer’s Association and the Individual Placement and Support (IPS) Supported Employment Programs;
  • $2,250,000 for South Carolina Children’s Advocacy Medical Response System to provide forensic medical evaluations for incidents of child abuse and neglect.

Good Government & Ethics

The Department of Administration has found that IT Shared Services throughout state government agencies would not only result in $14.25 million in annual savings, but would also result in enhanced reliability, data reliability, data protection and accessibility of government services.

Governor McMaster believes the concept of shared services should be utilized throughout government. Cost savings and efficiencies would be realized by using shared resources in areas such as human resources, accounts payable, procurement, budgeting, reporting, and maintenance.

To that end, Governor McMaster’s Executive Budget invests in an IT Shared Services Program Management Office and includes three provisos intended to shift state government toward the shared services model, conserving taxpayer dollars and moving us to a more sustainable model of governance.

Additionally, this budget invests in the State Ethics Commission’s ability to investigate and enforce existing ethics laws, in part, by doubling lobbyist registration fees that go directly towards the Commission’s budget. Investments include:

  • Provides $3,000,000 to establish an IT Shared Services Program Management Office at the Department of Administration (DOA);
  • Requires agencies to utilize consolidated administrative services through DOA;
  • Establishes a centralized real property and facilities management process for all state government agencies;
  • Directs DOA to establish develop and issue uniform written standards and guidelines for data entry into the Statewide South Carolina Enterprise Information System (SCEIS);
  • Allocates $364,369 for investigation and enforcement enhancement at the State Ethics Commission by doubling the registration fee for lobbyists and lobbyist principals from $100 to $200, and requires anyone paid to influence decisions made by county, city or town councils to register as lobbyists.

Energy & Environment

South Carolina is blessed with natural beauty that makes the state a destination for those all over the world, resulting in jobs created and a $20 billion tourism industry. Governor McMaster’s Executive Budget invests in the future of that important industry by allocating funds to the South Carolina Conservation Land Bank, beach re-nourishment efforts, and other important projects:

  • Provides $11,000,000 for beach re-nourishment and $10,000,000 to rebuild cabins at Hunting Island State Park;
  • Funds the State Conservation Bank with $6,000,000 in non-recurring dollars;
  • Provides an additional $1,500,000 to the Department of Natural Resources for statewide public wildlife and fisheries management projects, and $2,200,000 to reopen hatcheries closed since the recession 
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