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McMaster budget focuses on tax cut, economic development

Staff Report //January 9, 2018//

McMaster budget focuses on tax cut, economic development

Staff Report //January 9, 2018//

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Gov. Henry McMaster focused his 2018-2019 Executive Budget message, which was released Monday, on seven areas South Carolina’s chief executive feels need attention.

Tax relief, economic development, education, public safety, health care, ethics, and energy and the environment all are priorities, McMaster said in his $8.1 billion budget, which includes plans to cut taxes and add more than $12 million for economic development, as well as an increase in per-pupil spending in the state.

“The recent tax reform bill passed by Congress and signed into law by President (Donald) Trump was a great victory for American taxpayers and our economy,” McMaster said. “As a result, many companies in South Carolina have already announced reinvestment and provided raises for employees. The elimination of the federal deduction on state income taxes makes it more important than ever for states like ours to cut taxes and enact serious reform.

McMaster said at 7%, South Carolina has the highest income tax rate in the Southeast and the 12th-highest in the nation.

“With new changes in the federal tax structure, we must move quickly to maintain our state’s superior ability to attract new jobs, capital investment and economic opportunity,” he said. “The time has come to remove the burden of our high income tax rate.”

Tax relief

McMaster’s budget proposes two tax reform initiatives, including a 1% rate reduction over five years for all personal income tax brackets, starting with an immediate $139 million cut. It also includes an immediate and full retirement income exemption for military veterans and first responders that represents $22 million in cuts the first year.

Economic development

The budget adds nearly $12 million to the Commerce Department, more than $9.4 million to ReadySC, $5 million for the creation of S.C. Workforce Partnership establishing relationships between technical schools, high schools and businesses, $3 million for scholarships and grants, $950,000 for the “Be Pro Be Proud” initiative and $900,000 for expansion of workforce training at the departments of Juvenile Justice and Probation, Parole and Pardon Services.

Education

McMaster proposes a $25.2 million increase for base student costs in K-12 public schools, or an $10 increase per student, and a more than $18.8 million increase at S.C. charter schools. The executive budget proposes $16.4 million for needs-based higher education scholarships, $5 million for S.C. School Safety Program, $5 million for bus leasing, $3.1 million for computer science and coding classroom instruction, $2.5 million for charter school transportation pilot program and $500,000 for Clemson University’s Call Me Mister teacher retention and recruitment program.

McMaster also proposes making the Superintendent of Education a cabinet-level and consolidating school districts in the state, which he said could save up to $338 million over five years.

Public safety

McMaster wants to move S.C.’s Immigration Enforcement Unit from the Department of Public Safety to the State Law Enforcement Division, providing two additional immigration officers at SLED. His budget also adds $600,000 for the S.C. Military Base Task Force.

Health care

McMaster wants $10 million for a treatment, prevention and education efforts to combat opioid abuse. The budget also includes $3.8 million for service increases for autism therapy and $7 million for the Department of Mental Health.

Ethics

McMaster said the state can save more than $14 million and increase data reliability and protection by sharing information technology services across state agencies, so he’s proposed spending $3 million for an IT Shared Services Program Management Office at the Department of Administration.

The budget also provides $364,369 for investigation and enforcement enhancement at the State Ethics Commission, which would be paid for by doubling the registration fee for lobbyists and lobbyist principals to $200.

Energy and the environment

McMaster’s budget provides $11 million for beach renourishment, $10 million to rebuild cabins at Hunting Island State Park and $6 million in a one-time payment to the State Conservation Bank. McMaster wants to allocate $3.7 million to the S.C. Department of Natural Resources for statewide public wildlife and fisheries management projects and to reopen hatcheries closed since the recession.

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