(The Center Square) – South Carolina Gov. Henry McMaster touted the state’s rosy economy during his State of the State address and urged lawmakers to bolster the state’s Rainy Day Fund and return money to taxpayers .
“Our booming economy has created another record budget surplus, totaling over $3.5 billion in windfall this year,” said McMaster, a Republican, according to his prepared comments.
“Today we have an opportunity to take bold, transformative action that will create prosperity for generations to come,” added McMaster. “The foundations of our success rest on three pillars: economic power, education and our natural environment.”
McMaster asked state legislators to provide an additional $500 million to increase the minimum rainy day reserve fund balance from 7% to 10%.
In addition, the governor said that “if future revenue permits” and based on the State Board of Economic Advisors’ updated revenue forecast in February, the General Assembly should “use additional funds to accelerate the timeline for cutting the income tax.”
The governor also wants lawmakers to make a one-time allocation of $500 million to the Department of Commerce to allow the agency to “meet all outstanding obligations and incentives without borrowing money.” The House of Representatives recently approved those funds, and the governor said he wants the Senate to follow suit.
“An additional one-time allocation of $200 million will allow the department to identify and secure lands for future megasite development,” the governor said.
McMaster also highlighted additional transportation and education spending in its executive budget, including a college tuition freeze for out-of-state students and a $2,500 increase in teachers’ pay. The governor also wants to allocate $380 million in remaining American Rescue Plan Act (ARPA) funds to continue water and sanitation grants for rural communities.
In response, Sen. Ronnie Sabb, D-Greeleyville, said Democrats welcome the opportunity to work with the governor on initiatives such as tuition stabilization. However, he noted that federal funding has helped make many of the state investments possible.
“The governor mentioned many exciting initiatives in his speech,” Sabb said Remarks. “Democrats support plans to improve our state’s roads and bridges, expand sanitation and water services, and make broadband accessible to all South Carolina residents.
“But let’s be clear — many of these investments will be made possible by the passage of the federal Infrastructure Act under President Joe Biden,” Sabb added. “This is an example of how our federal and state governments can achieve great things together that benefit everyone.”
The National Federation of Independent Business commended McMaster’s commitment to passing joint and several liability reform.
“South Carolina’s reputation as one of the best states for small business is undermined by a civil justice system that leans heavily against defendants, including small business owners,” NFIB State Director Ben Homeyer said in a statement.
“We agree with Governor McMaster that small businesses shouldn’t be penalized for someone else’s mistake just because they might have more money,” Homeyer added. “When a small business is sued, it has to spend tens of thousands of dollars defending itself. Just a frivolous lawsuit can be enough to put a small business out of business, even if the case is eventually thrown out of court.”