The second week of the session saw a few meetings take place and others canceled as a winter storm left snow and ice over much of the state, making driving hazardous. There was no floor debate in either chamber, as both were in perfunctory session this week. The Senate Finance Committee received an update on the audit of the “missing” $1.8 billion in state funds released last week. Several Senate subcommittee meetings took place, along with a few House Ways and Means budget subcommittees.

Agribusiness

A Senate Agriculture and Natural Resources Subcommittee adopted S. 103 (Senator Climer) on Wednesday, which would make it unlawful to label any cell-cultivated food product as beef, poultry, fish or any other meat that a cultivated food product may resemble for the purposes of manufacturing, selling or holding or offering for sale in this state. Yesterday, the bill was unanimously adopted by the full committee. The bill now goes to the full Senate for consideration.

The Joint Surface Water Study Committee held its first meeting yesterday. The committee will be co-chaired by Senate Agriculture and Natural Resources Chairman Wes Climer (R-York) and House Agriculture Committee Chairman Bill Hixon (R-Aiken). The committee was created by proviso to provide a roadmap for the state’s water resources.

Department of Environmental Services Interim Director Myra Reece updated the committee on WaterSC, a committee created by the governor to study the state’s water needs, wastewater capacity and energy to address the state’s growth. The Joint Committee intends to work in tandem with WaterSC to address both surface and groundwater issues. Reece told the committee that she will provide quarterly updates to this committee moving forward. The committee will provide its findings and recommendations to the General Assembly by March 2, 2026. For more information on WaterSC, click here.

Appointment

Yesterday, Governor Henry McMaster announced his appointment of Jake Gadsden, Jr. as the next Director of the South Carolina Department of Probation, Parole, and Pardon Services (SCDPPPS). Gadsden currently serves as the Deputy Director for Programs, Reentry, and Rehabilitative Services for the South Carolina Department of Corrections (SCDC) and has over 30 years of experience overseeing both state and county correctional facilities. Gadsden, 65, is a resident of Chapin, S.C. He earned a bachelor’s degree in criminal justice from the University of South Carolina and completed the Harvard University School of Government Tier Management Training program. A copy of his resume can be found here, and a copy of his headshot can be found here. The appointment is subject to Senate confirmation.

Budget

Several subcommittees of the House Ways and Means Committee continued hearing state agency budget requests this week. Agencies appearing included the University of South Carolina, South Carolina State University, the State Technical College System, the Department of Disabilities and Special Needs (DDSN), the Department of Mental Health (DMH) and the Department of Health and Human Service (DHHS). DHHS Interim Director Eunice Medina said the agency is requesting $55.4 million for the Medicaid Maintenance of Effort. She noted that the agency has completed all activities relating to retaining individuals due to federal requirements during the pandemic. Following the unwinding of the Public Health Emergency (PHE), the number of Medicaid recipients is now down from 1.3 million to 1.1 million recipients. The annualization amount is considerably lower than in previous years because the agency moved to a single preferred drug list from managed care organizations, allowing the state to take back rebates from the program, saving the state approximately $21 million per year.

The revised FY25-26 budget estimate provides lawmakers with $533 million in “new” recurring revenue and an expected budget surplus for one-time needs of $1.2 billion. Budget subcommittees will continue hearing state agency budget requests 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 on March 11, and then the budget goes to the Senate for their consideration.

To view the governor’s executive budget, click here.

Individual state agency budget requests can be found here.

House Ways and Means 2025 Budget Schedule can be found here

Insurance

Yesterday, the Insurance Subcommittee of the Senate Banking and Insurance Committee favorably approved the following bills:

S.210 (Turner) relating to requirements of captive insurance companies;

S.220 (Cromer) Insurance Holding Company Regulatory Act. The bills now go to the full committee for consideration.

Judicial

A Senate Judiciary Subcommittee met on Tuesday and began debate on S. 184 (Senators Johnson, Young and Adams), known as Dram Shop liability. The bill would hold businesses and individuals responsible if alcohol is served to someone who is intoxicated and that person harms another person. The bill, along with other tort reform measures being considered, is aimed at lowering insurance premiums for businesses and individuals. The subcommittee took no action and will meet again on the bill soon.

Missing Funds

On Tuesday, the Senate Finance Committee received a briefing on the recently released audit of the “missing” $1.8 billion in state funds. The lengthy report, independently done by a consulting firm hired by the state, determined that the funds never represented real cash. Their report noted “unintended accounting mistakes made by different parties involved in state government’s transition from an old accounting system to the new accounting system.”

State Senator Larry Grooms (R-Dorchester) chaired a Senate committee last year to look into a report of the missing funds and continues to place the blame squarely on State Treasurer Curtis Loftis. Grooms is now suggesting that the state hire an outside firm to monitor the comptroller general, state treasurer and the state auditor’s offices to ensure that they are following recommendations from the audit. The U.S. Securities and Exchange Commission (SEC) is continuing to investigate the state’s financial agencies. Following the report, the committee adopted a Joint Resolution to hire an outside financial supervisor to potentially stave off SEC sanctions.

Yesterday, the State Auditor George Kennedy announced his resignation. He has served as State Auditor since 2015. Kennedy is the second resignation connected to the error that started more than two years ago when, in 2023, it was publicly disclosed that the state’s books included a $3.5 billion accounting error. Then-Comptroller General Richard Eckstrom resigned in March 2023 under pressure after the error’s public disclosure and as hearings were underway in the Senate Finance Committee.

The lengthy report, independently done by consulting firm AlixPartners, can be found here.

Portrait Unveiling

On Wednesday, the Senate unveiled a portrait of former Lexington County State Senator Nikki Setzler that will now hang in the Senate chamber. Setzler, who represented District 26 from 1976 to 2024, is the longest-serving senator in state history and, at the time of his retirement last year, was also the longest-serving sitting senator in any state legislature in the nation. Setzler spent eight years as Senate Minority Leader and was known as a level-headed voice who championed public education. Numerous current and former state senators spoke at the ceremony, sharing their memories of serving with him. An emotional Setzler said he hoped those viewing his portrait in the future think about their future and a more vibrant state moving forward. He noted the portrait includes two wristbands he wears, signifying Love and Family.

Coming Up Next Week

Governor Henry McMaster will deliver his annual State of the State address on Wednesday, January 29, at 7:00 pm. SCETV will air his speech live.