COLUMBIA, S.C. – Governor Henry McMaster today unveiled his Executive Budget for fiscal year 2025-2026, which prioritizes fiscal responsibility, accelerates income tax cuts, raises teacher pay, and invests in critical infrastructure and disaster relief. The governor's budget also includes funding to ensure a school resource officer in every school and measures to make higher education more affordable and accessible. 

"South Carolina’s booming economy has once again created a large budget surplus, this year totaling over $1.8 billion in unexpected revenue," Governor McMaster wrote in a letter to the General Assembly. "By thinking big, by being bold, and by making these 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." 

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. 

The following executive budget highlights are attributable to Governor McMaster: 

Executive Budget Highlights: 

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. Three years ago, I signed into law the largest income tax cut in state history, designed to incrementally drop the personal income tax rate from 7% to 6% over a period of years. Our booming economy has created annual budget surpluses that have allowed us to cut this tax rate faster and farther than originally anticipated.

"My Executive Budget continues cutting the state’s personal income tax, dropping the rate from 6.2% to 6% – allowing taxpayers to keep an additional $193.5 million of their hard-earned money instead of sending it to state government. And we don’t need to stop at 6% – we should continue cutting or eliminating the personal income tax rate as much as we can, and as fast as we can."

Permitting Reform: 

"My Executive Budget provides the DES with an appropriation of $13.7 million to hire and train the additional personnel necessary to reduce the current backlog of existing environmental permit applications. In addition, with this appropriation, the agency will be required to issue future permitting decisions within 90 days of the application submission."

Disaster Relief: 

"My Executive Budget recommends $50 million be appropriated to the Department of Transportation for unreimbursed costs related to Hurricane Helene, which includes costs related to debris removal and repairs to roads and bridges.

"In addition, I recommend that $40 million be appropriated to the Office of Resilience to replenish the Disaster Relief and Resilience Reserve Fund and the Disaster Relief and Resilience Revolving Loan Fund, which were utilized for immediate relief efforts related to Hurricane Helene.

"I am also recommending that $150 million be appropriated to create the South Carolina Public Assistance (PA) program to be administered by the South Carolina Emergency Management Division (SCEMD). This grant program will allow local governments, public utilities, nonprofit, and charitable aid organizations to apply for disaster recovery funds – funds that were either denied by the federal government or did not meet federal FEMA thresholds."

Teacher Pay Raises: 

"Eight years ago, the minimum starting salary of a teacher in South Carolina was $30,113; the average teacher salary was below the Southeastern average. At that time, I proposed that we begin raising the minimum starting teacher salary, as much as possible each year, with the goal of raising it to at least $50,000 by 2026.

"Today, the minimum starting salary of a teacher in South Carolina is $47,000, and the average teacher salary now exceeds the Southeastern average. This represents an increase of 56.1%. Last year, South Carolina’s required minimum starting teacher salary was higher than both Georgia and North Carolina.

"My Executive Budget provides $200 million to reach a $50,000 minimum starting teacher salary – a year earlier than my goal of 2026."

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.

"The data has shown that a child from a low-income household enrolled in a state-funded, full-day four-year-old kindergarten (4K) program, is more likely to be ready for kindergarten than their peers who did not participate.

"Today, 18,083 students are enrolled in the program. The Office of First Steps to School Readiness (First Steps) anticipates a 7% increase in the number of children from low-income households will enroll in the program in school year 2025-26 at a cost of $2.8 million, which has been included in this Executive Budget."

School Choice: 

"This Executive Budget also provides $30 million for the Education Scholarship Trust Fund in anticipation of the General Assembly quickly passing legislation that addresses the State Supreme Court decision last 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."

South Carolina Education Lottery: 

"In addition, my Executive Budget proposes allowing education lottery tickets to be purchased utilizing debit cards in addition to the current cash-only requirement. Only three states require cash-only purchases, South Carolina, Tennessee and Wyoming. Many businesses no longer accept cash – and many people don’t carry it.

"According to the state Board of Economic Advisors, FY 2025-26 education lottery proceeds, and investment earnings are currently projected to be $31.9 million less than the amount appropriated in last year’s state budget.

"The Lottery Commission estimates that debit card purchases (not credit cards) would generate an additional $52 million in lottery proceeds that could be utilized to fund the Education Scholarship Trust Fund or to increase the LIFE, HOPE and Palmetto Fellow college scholarship award amounts."

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 schools with an officer assigned to a school, going from 406 in 2018 to 1,106 in 2024.

"I am recommending an additional $21 million appropriation for the SRO grant program in FY 2025-2026. This funding will finish the job, adding an officer at each of the remaining 177 schools currently without an assigned officer."

College Tuition Freeze: 

"This year marks the sixth consecutive year that I will propose that we freeze college tuition for in-state students in exchange for an appropriation to a number of institutions of higher education of $29.9 million.

"For FY 2025-26 this Executive Budget uses a new methodology to calculate and appropriate funds for tuition mitigation to public colleges and universities. The methodology considers the total tuition and fees charged the previous year to undergraduate in-state students, multiplied by the 2024 Higher Education Price Index (HEPI) of 3.4%, multiplied by the total number of in-state undergraduate students, to arrive at a tuition mitigation estimate."

Need-Based Financial Aid: 

"For the fourth year in a row, my Executive Budget proposes providing $80 million in state lottery funds for needs-based grants so that every South Carolinian who qualifies for 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 as well."

Future of Higher Education and Workforce Study: 

"Once again, I will renew my call for the General Assembly to fund and authorize a $2 million systemic review of our state’s 33 public institutions of higher education, to be conducted by the Department of Employment and Workforce. The goal is to make sure we are preparing to meet our state’s future workforce needs.

"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."

Workforce Industry Needs Scholarships: 

"To address the high demand for skills, training, and knowledge, this Executive Budget once again provides $95 million in lottery funds to South Carolina Workforce Industry Needs Scholarships (SC WINS) through the South Carolina Technical College System.

"In the last five years, this very successful program has provided over 40,597 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."

Battelle Alliance: 

"I am also asking the General Assembly to continue funding of the Battelle Alliance, a collaborative nuclear sciences research partnership between the University of South Carolina, Clemson University, South Carolina State University, and the Savannah River National Laboratory, with an appropriation of $20 million. The alliance will develop workforce training programs designed to fill engineering, science, research, and management positions for nuclear facilities operated by the Department of Energy and other such enterprises."

New Neurological Hospital: 

"South Carolina has been identified as part of the “stroke belt” with high stroke and dementia mortality rates. The current neurological care options in the state are limited, forcing residents to seek care outside the state, which delays early diagnosis and treatment, and may result in extended hospital stays and significant financial burdens for patients.

"We have a once in a generation opportunity to create a neurological facility for critical care procedures, rehabilitation services, and leading-edge research in the field of neurology.

"The University of South Carolina has several important existing initiatives, such as the Brain Health Network, the McCausland Center for Brain Imaging, and the Center for the Study of Aphasia Recovery (C-STAR).

"My Executive Budget recommends a $100 million appropriation to the Department of Health and Human Services for the construction of a new neurological hospital with an 80-bed critical care unit and a 32-bed neurological rehabilitation unit, operated by the University of South Carolina."

State Health Plan: 

"The State Health Plan provides medical, vision, dental, and pharmacy insurance coverage for 543,579 South Carolina public employees. School district teachers and employees make up 41%, government retirees 37%, state agency employees (including higher education) 21% and local boards 1%.

"This will mark the fourth year in a row that the State Health Plan, administered by the Public Employee Benefit Authority (PEBA), has requested an additional $112 million to offset healthcare provider cost increases and to simply maintain existing insurance benefits. That’s almost a half-a-billion dollars ($449 million) in four years. That’s not fiscally sustainable.

"While this Executive Budget recommends providing that additional $112 million, it comes with a new cost containment requirement. Each vendor selected by PEBA to provide medical, vision, dental, and pharmacy insurance benefits shall be required to identify and propose cost savings measures in order to slow cost increases to a manageable level."

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, my Executive Budget continues our investment in infrastructure with an appropriation of $100 million to the South Carolina Department of Transportation (SCDOT) to be used to repair, rehabilitate, and rebuild many of the nearly 9,000 bridges on primary and secondary roads across our state."

Land Preservation and Conservation: 

"Once again, my Executive Budget recommends that significant funds – $15.5 million – be appropriated to the Conservation Land Bank, the Department of Natural Resources, the Office of Resilience, and the Forestry Commission for the purposes of identifying and preserving culturally or environmentally significant properties, and for flooding mitigation efforts."

Law Enforcement Pay Raises and New Officers: 

"A few years ago, we tasked the South Carolina Department of Administration with conducting a comprehensive analysis of law enforcement pay within state government. This effort was aimed at ensuring salaries are competitive to attract and retain top-tier talent.

"As a result, South Carolina's law enforcement officers have received substantial pay raises – some as high as 52% in the last three years. My Executive Budget continues our investment in our state law enforcement professionals by providing $14.5 million for pay raises and the hiring of new law enforcement officers."

First Responder Income Tax Credit: 

"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 $43.3 million in income tax relief for those who put their lives on the line each day to protect and serve the public."

Department of Corrections: 

"This Executive Budget recommends providing the Department of Corrections with a total of $43.2 million in new appropriations to expand cell phone and contraband interdiction efforts, hire new corrections officers, increase medical and mental health services, provide employee retention raises and pay for deferred maintenance at all 21 prisons."

Animal Fighting: 

"Animal fighting, especially dog fighting, is one of the cruelest criminal activities in our society. Law officers estimate that most of the people participating in this barbaric activity have long criminal records. This Executive Budget recommends a $500,000 appropriation to the State Law Enforcement Division to bolster their animal fighting efforts."

Undergrounding Electric Power Lines Study: 

"Due to extended power outages during Hurricane Helene that resulted from downed power lines from high winds and tree damage, this Executive Budget also recommends a proviso that directs the Office of Regulatory Staff to study the economic and technical feasibility of the undergrounding electric power lines in the state."