The first regular session of the 126th South Carolina General Assembly will convene this Tuesday, January 14, at noon. The 18-week session will be the first year of a two-year legislative session. Several issues debated last year will once again be front and center, including income tax cuts, expanding electric generation capacity, school choice, restructuring the state’s behavioral health agencies, tort reform, tax reform and, of course, the state budget. In advance of the session, members have pre-filed over 600 bills. Continued economic growth will once again provide additional General Fund revenue and a projected surplus of over $1 billion. Republicans in the General Assembly now have a super-majority in both chambers, occupying 88 of the 124 seats in the House and 34 of 46 seats in the Senate. Sine Die adjournment is scheduled for Thursday, May 8, 2025.
Budget
Continued economic growth will once again provide additional revenue to bring many budget priorities to fruition. The revised FY25-26 budget estimate is $13.9 billion in General Fund revenue, with $533 million in “new” recurring revenue. The budget surplus is estimated to be $1.2 billion, which will fund one-time priorities, including capital projects. State leaders have said funds to assist in the recovery from Hurricane Helene will be a top priority. The Board of Economic Advisors (BEA) will review revenues again in February before the House Ways and Means Committee adopts its version of the budget.
The state constitution mandates that all spending bills originate in the House, so the House Ways and Means subcommittees will begin hearing state agency budget requests next week and will continue hearings over the coming weeks. They are expected to take up the budget in full committee the week of February 18. Full floor debate is expected in the House beginning March 11, and then the budget goes to the Senate for their consideration.
The state Treasurer’s Office is expected to release a forensic audit this month regarding the “missing” $1.8 billion in misplaced funds, which will likely draw significant legislative attention early in the session.
Governor Henry McMaster is expected to unveil his FY 2025-2026 Executive Budget recommendations soon. Once posted, the Executive Budget can be found here.
The Board of Economic Advisors State Revenue Reports and meeting materials can be found here.
Individual state agency budget requests can be found here.
House Ways and Means 2025 Budget Schedule can be found here.
Confirmations
T
he Senate will be busy over the coming weeks with confirmation hearings on several cabinet-level appointments. They include:
Eunice Medina as director of the South Carolina Department of Health and Human Services (SCDHHS);
Dr. Edward Simmer, former director of DHEC, who now leads the recently created Department of Public Health (SCDPH); and
Myra Reece, currently the Interim Director of the newly created Department of Environmental Services (SCDES).
A new director to replace Michael Leach at the Department of Social Services (DSS) will also need Senate confirmation, once appointed by the governor.
Education
acher salaries have increased annually to $47,000 currently and another increase will likely be included in the state budget again this year.
Lawmakers will once again take on the issue of school choice following a state Supreme Court ruling last September that determined a new law establishing an education scholarship trust fund violated the state’s constitution. The fund granted $6,000 vouchers to qualified low-income families and afforded parents the freedom to select an education option that best fit their child’s needs, public or private. The court ruled that public funds may not be used for private or religious schools.
In the first full committee meeting of the new session, the Senate Education Committee met this past Wednesday to debate S. 62 (Senators Hembree and Rice) which would provide $8,500 scholarships to low-income families using lottery funding instead of state general funds. The Supreme Court has previously ruled that lottery funds can be used for tuition at private colleges. That bill is expected to be one of the first to be debated by the Senate this year.
A number of bills have been pre-filed regarding the banning of sexually explicit reading material in public schools and banning Diversity, Equity and Inclusion (DEI) programs in public schools.
General Business
Regulatory relief for small businesses has long been a priority of the business community, and the issue may receive significant attention this year. H. 3021 (Reps. Bradley, G. M. Smith and Herbkersman), which enacts the “Small Business Regulatory Freedom Act” in an effort to reform the regulatory process and remove burdensome state agency regulations, was pre-filed last month.
What has been labeled as the “venue crisis” will be addressed to fix the legal liability faced by businesses that sell alcohol. Recently passed legislation requires businesses that sell alcohol to carry a minimum $1 million liquor liability insurance policy. While the law was intended to help victims of impaired driving, restaurants and bars are closing because of skyrocketing insurance premiums. Insurance companies have fled SC, claiming that for every dollar in paid premiums, they are spending two dollars in settling lawsuits, further compounding the situation. The result has been enormous increases in insurance premiums that many simply can no longer afford to pay
Healthcare
In 2023, legislation was enacted to restructure the Department of Health and Environmental Control (DHEC), creating the Department of Public Health and the Department of Environmental Services. The law splitting up the agency became effective July 1 of last year. Last year, legislation passed both chambers, restructuring the state’s five behavioral health agencies, but that bill never became law due to differing versions that were not resolved by a Conference committee. A Senate bill, S. 2 (Senators Peeler, Alexander and Davis), has been pre-filed to continue that effort. Although last year’s bill included the Department of Health and Human Services (DHHS), this bill leaves DHHS as is and creates the Department of Behavioral Health and Developmental Disabilities, merging the Department of Mental Health, the Department of Disabilities and Special Needs and the Department of Alcohol and other Drug Abuse Services into one agency.
The “Compassionate Care Act,” which deals with medical marijuana, has been debated for years and has once again been pre-filed S. 53 (Senator Davis).
Information Technology
Led by Representative Jeff Bradley (R-Beaufort), the House of Representatives Artificial Intelligence Committee met numerous times last year to study Artificial Intelligence (AI), cybercrime and cybersecurity in recognition of the increasing significance of AI technology and the need to ensure the protection and welfare of South Carolina citizens in an evolving technological landscape. Although they have yet to determine if new laws or regulations are necessary, it is expected they will continue their work this year, as this committee has now been made a part of a permanent House standing committee – the Regulatory, Administrative Procedures and Artificial Intelligence and Cybersecurity Committee. In cooperation with the committee, the Department of Administration recently issued an AI Strategic Plan for state agencies. That document can be found here.
Legislation has been pre-filed H. 3201 (Reps. Davis and Erickson) to provide for the expansion and enhancement of computer science education in public high schools.
Judicial
The Judicial Merit Selection Commission (JMSC) held public hearings this past fall and, in December, released the list of qualified and nominated judicial candidates. In all, 83 judicial candidates are vying for 52 spots that the General Assembly will fill in a joint assembly election expected to be in February. South Carolina is one of only two states where the Legislature elects judges. Virginia is the other. The list of candidates can be found here.
Other topics of interest that may be debated include the Tort Claims Act and limitations of tort liability, Tort Reform, Jury Voir Dire and increasing the civil jurisdiction of magistrate’s court. Hate Crimes legislation has once again been introduced as well.
New Members
This year, there will be 13 new state senators, the largest freshman class since the 19th century, and 19 new House members. For the first time since Reconstruction, Republicans will hold a supermajority in both the Senate and the House. 34 of the 46 senators and 88 of the 124 House members are Republican. While those numbers will make it easier in the Senate to stop a filibuster, they may also lead to fractures in the majority party.
Pre-filed Legislation
In advance of the session, members have pre-filed over 600 bills. Those bills can be found here.
State of the State Address
Governor Henry McMaster will deliver his annual State of the State address on Wednesday, January 29, at 7:00 pm, where he will lay out his legislative and budget priorities to a Joint Session of the General Assembly. SCETV will air his speech live.
Tax
Reducing the state’s income tax will once again be a top priority for the General Assembly. The growth in the FY-26 revenue estimate over the base budget is sufficient to trigger the next reduction in the individual income tax rates for tax year 2025, which affects expected payments in FY-25 and total collections in FY-26. Numerous bills have been pre-filed relating to income tax credits, alternative methods for allocating income, deductions for retirement income, elimination of income tax on estates and small business income tax credits.
Senate Majority Leader Shane Massey (R-Edgefield) recently said that it is time for the General Assembly to once again look at comprehensive tax reform. The last major changes to the tax code were in 2006, and efforts since have been met with strong opposition from those who currently benefit from tax exemptions. Bills have been pre-filed to create additional tax credits and exemptions, as is the case every year.
Due to recent changes by Congress, legislation to conform our state’s tax code to the federal IRS code will once again be required. Representative Nathan Ballentine (R-Lexington) has pre-filed a bill, H. 3489, to adopt conformity.
Utilities
A top priority for the General Assembly will again focus on expanding electric generation capacity and access to clean resources to address growing energy demand and supply gaps, and to bolster economic growth in an affordable, reliable, safe and sustainable manner. The House passed legislation last year to address the issue, but Senate leaders argued that the bill was rushed and did not adopt it. A special Senate committee met numerous times following last year’s session and is expected to introduce its plan soon. That plan may include authorizing Santee Cooper and Dominion Energy to enter into a joint venture to build a new gas facility in Canadys, South Carolina. There was also discussion of additional gas pipelines and the permitting process, including reform to expedite permitting to keep projects from lingering in courts for years. Also discussed was the possibility of including avenues to give large industrial energy users some level of flexibility and control over their power needs. The House has pre-filed its energy plan, H. 3309 (Reps. G. M. Smith, Gatch, Herbkersman and Pope), the “South Carolina Energy Security Act.”
Legislators agree on the need for a comprehensive energy reform package as we are running out of baseload generation. South Carolina’s current energy mix includes 27% coal, 38% nuclear, 27% natural gas and 8% other, including solar and bio. South Carolina ranks #1 in the nation in nuclear energy output, and there has been some discussion to consider a study of the viability and cost to finish the shuttled nuclear project at the V.C. Summer Nuclear Station.
Workforce Development
Efforts to enhance the state’s pipeline of workers to meet the growing labor shortages will continue again this year and may include expanding meaningful dual enrollment opportunities to meet employer demands. Particular emphasis may also focus on the need to provide accessible and affordable child care.
Coming Up Next Week
The first regular session of the 126th South Carolina General Assembly will convene next Tuesday, January 14, at noon.
