Growth drives $15.4 billion House budget plan

Flush with tax revenue from a booming South Carolina economy, the S.C. House Ways and Means Committee on Wednesday approved a $15.4 billion state spending plan for 2026 that includes tax cuts, new money for transportation and school vouchers, and pay raises for teachers and state employees.

But as committee Chairman Bruce Bannister, R-Greenville, noted prior to the vote, the same growth that’s filling state coffers is putting unprecedented strains on state infrastructure.

South Carolina was the nation’s fastest-growing state in 2025 and has ranked among the top five every year since 2020.

“Our population is growing, our economy is expanding and opportunity is reaching communities across our state,” Bannister said. “Still, growth requires structure and prosperity requires discipline, [and] that principle has guided the work of this committee.”

Of particular concern to budgeters, he said, was the condition of state roads and bridges.

“This budget strengthens the backbone of our economy with over half a billion dollars dedicated to roads and transportation improvements, because congestion and capacity challenges are real in every region of our state,” he said. “And as congestion is bipartisan, it frustrates both Republicans and Democrats.”

The new transportation spending was about half of the $1.1 billion Gov. Henry McMaster requested in his January State of the State address. It includes $250 million for bridge improvements, $125 million for road projects and $25 million to incentivize counties to take ownership of state roads — and the maintenance bills that come with them.

Teacher pay, vouchers and new schools

To complete a five-year plan to raise minimum teacher salaries above the Southeastern average, the proposed budget would fund $2,000 raises in every pay band, bringing starting teacher pay to $50,500 statewide.

S.C. Education Association President Dena Crews lauded the move, saying it would help with the recruitment and retention of quality teachers, but said it was “just the beginning” of addressing low pay in state public schools.

“We look forward to our legislators also looking at ways to increase salaries for our education support professionals,” she said, name-checking school jobs ranging from classroom assistants to custodians to bus drivers.

Other major education proposals include $75 million to support rural and charter school construction projects, and more controversially, $23 million to expand the state’s private school voucher program.

That last item prompted a pointed exchange between Orangeburg Democratic Rep. Gilda Cobb-Hunter and education subcommittee chairman Rep. Bill Whitmire, R-Oconee, when Cobb-Hunter noted that a required report on the program’s effectiveness hadn’t been provided to members.

“I’m just wondering if it’s prudent for us to be adding money to a program when we don’t really know the efficacy of the program,” Cobb-Hunter said.

“Well, I understand you’re not really in favor of this,” Whitmire replied. “So I’m just going to say yes, I think it is prudent and we probably need to expand it in the future if we have the money.”

Health and human services

As Statehouse Report reported last year, President Donald Trump’s “Big Beautiful Budget Bill,” passed in July 2025, imposed significant new costs on S.C. state government.

Those increased expenses were reflected in committee budget documents, with Medicaid-related spending rising to $156 million, and new SNAP nutrition outlays of about $60 million for rising administrative and technology costs.

Also included were $8 million for the University of South Carolina’s neurological hospital and $175 million for the Medical University of South Carolina’s planned new cancer center. That was half of the $350 million MUSC requested for the $1.1 billion project, which school officials say will carry the National Cancer Institute’s highest patient-care designation when complete. MUSC did not respond to a request for comment on the allocation before deadline, citing an internal approval process that can take up to two weeks.

Economic incentives and tax cuts

With more than $110 million in subsidies for agribusiness, tourism promotion and other job creation initiatives, the proposed budget maintains the state’s longtime commitment to investing directly in commerce and development.

But garnering the most attention was an item the committee chose not to fund — a state Commerce Department request for an additional $150 million to offset construction cost overruns at Scout Motors’ Blythewood manufacturing plant, which has already cost state taxpayers $1.3 billion.

Nevertheless, Bannister suggested the committee might be open to revisiting the question later in the budget process.

“The caucus still has a lot of questions,” he told reporters. “We didn’t believe now was the time to start trying to add additional money to Commerce until we get more of those answers.”

Also raising red flags for at least some GOP members was funding for a tax plan that some call a cut and others say is an increase. Passed last year in the House and now pending in the Senate, the bill would lower the state’s top income tax rate from 6% to 5.39%. But due to changes in allowed deductions and credits, it lowers some people’s taxes while raising others.

“Yeah, sorry, but it’s a tax hike,” Berkeley Republican Rep. Jordan Pace told Statehouse Report in a Feb. 19 interview. “It raises taxes on 24% of the population and that’s a tax increase.”

Pace, who chairs the hard right Freedom Caucus, said he expects to oppose the budget when it reaches the House floor, arguing that it needs to pair deep spending cuts and across-the-board tax reductions.

“We’re not prioritizing the things I believe should be priorities,” he said. “And we certainly aren’t cutting taxes in a way I think is needed.”

The House is expected to begin debate on the budget March 9.