South Carolina lawmakers have converged on Columbia for the start of the 2025 Legislative Session.
In a news conference coinciding with the start, Gov. Henry McMaster (R), joined by Lt. Gov. Pamela Evett (R), laid out his proposals in his $14 billion executive budget proposal as the session began. High on his agenda are income taxes and education.
He pointed to a time when South Carolina had the highest personal income tax rate in the southeast and the 12th highest in the nation. Three years ago, he signed legislation to incrementally lower the income tax from 7% to 6%. It currently stands at 6.2%. He wants it to drop to 6% now, instead of the two years remaining on the initial timeline.
“South Carolina’s future prosperity requires that we constantly work to maintain our competitive advantage in the ever-accelerating race for new jobs and capital investment, and again, that competition in the southeast is fierce,” he said. “If you look at the numbers from U-Haul and others about where people are going to and where they’re leaving from, the south is the place to be. 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.”
He said the reduction to 6% would mean South Carolinians would benefit by keeping $193.5 million in their wallets.
McMaster said 2024 marked the third-best year in state history with $8.2 billion in new capital investment creating 5,500 new jobs, coupled with existing companies adding $5.3 billion in capital investments.
“We’re growing and people are working and paying taxes, and we’re expanding so that we’ve been able to cut those taxes,” he said. “These things don’t happen in a moment, but the more load that we can take off of people themselves, so that they can spend the money on the things that are important for them and their families, and the less goes into government that is wasted or is spent in the places that are not the best places, the better we can do on spending, on making those decisions, and the more efficient we can become.”
Turning his attention to education, McMaster began with a proposal to accelerate starting pay for teachers.
In 2017, starting pay for teachers was $30,113 and the average pay for teachers was below the southeastern average. McMaster set a goal of raising starting teacher pay to $50,000 by 2026, which would increase each step in the corresponding teacher pay scale by $3,000, Currently the pay for starting teachers is $47,000.
He wants to accelerate that increase.
“My executive budget provides $200 million to reach a $50,000 minimum starting teacher salary a year earlier than my goal set back then,” he urged. “But I emphasize again, we should not stop then. If we’re going to educate our children, if South Carolina’s future is going to be bright, as fast as things change, we must have educated young people.”
The governor is also looking at a potential shortfall in lottery funding for education. He anticipates lottery proceeds will drop, meaning scholarships would have to be funded from general revenue.
“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,” he explained. “But over the years, people have moved from cash to credit cards and debit cards, and a lot of vendors do not even allow cash payment. So, we’re trying to keep up with the change in the times.”
The South Carolina Education Lottery Commission estimates that allowing debit card purchases would pump an additional $52 million into the education scholarship Trust Fund.
