- BIG STORY: Tax cuts, growth, culture dominate session’s first half
- MORE NEWS: Senate committee focuses on tobacco, vapes
- LOWCOUNTRY, Ariail: Shields?
- BRACK: Instead of lowering income tax, dump sales tax exemptions
- MY TURN, Shealy: Democracy deserves better
- MYSTERY PHOTO: Red doors
- FEEDBACK: About the Statehouse possum
Tax cuts, growth, culture dominate first half of session
By Jack O’Toole, Statehouse bureau | With week nine of the 2026 legislative session now in the books, the annual five-month dash to do the state’s business is officially half-over.
And so far, much of the action saw lawmakers dealing with tax cuts, growing pains and (yet again) culture wars. Here’s our midsession update of what’s been happening.
Follow the money
In any given legislative session, a lawmaker’s primary duty is to pass a balanced budget for the coming fiscal year. But with three major tax cut bills moving alongside the budget-writing process, legislators say taxing and spending is more in flux at the midpoint of the session than it has been in years.
“At this point, you’ve got three pieces of tax legislation, all unresolved,” Beaufort Republican Sen. Tom Davis told Statehouse Report this week. “And so that makes for a very complex, confusing process, with a lot of different moving parts that have to happen in sync.”
This week, the S.C. House passed a $15.4 billion budget bill (H. 5126) that features a modest cut in the state’s top tax rate, teacher pay raises and about half of the $1 billion that Gov. Henry McMaster requested for roads and bridges. But three additional tax cuts have been approved by one or both chambers: a $250 million property tax cut for seniors (S. 768), a $300 million tax cut that mirrors President Donald Trump’s federal exemptions for tips and overtime pay (H. 3368), and a steeper top-rate cut that doubles the price tag to $309 million (H. 4216). Now, the S.C. Senate will have to try to reconcile everything as it works through its own budget process.
Growing pains
After five years of explosive growth compared to the rest of the country, South Carolinians are telling lawmakers they need relief from traffic jams, overburdened local water and sewer systems, and industries that are putting unprecedented strains on the state’s natural resources and power grid.
To address those growing pains, both chambers have bills that reform the way the S.C. Department of Transportation (SCDOT) does business. The House measure (H. 5071), still in committee, includes making the head of SCDOT a gubernatorial appointment, pushing counties to pay for maintenance of nonessential state roads and raising electric vehicle fees. The Senate bill (S. 831), set for debate as soon as next week on the floor, would expand SCDOT’s authority to toll roads, encourage public-private partnerships and increase state oversight of county transportation committees. With similar approaches but different specifics, expect the bodies to work out their differences late in the session.
Also on tap in the weeks ahead are concurrency bills (S. 227, H. 4050) — that is, legislation authorizing local governments to slow down development until infrastructure catches up — and a bill putting stiff new regulations on the massive data centers (S. 867) that have been springing up across the state, including restrictions on their water and power usage.
Law and order
Heading into the session, GOP leaders in the House and Senate pledged to change the way state judges are chosen, toughen penalties for certain classes of crimes and reform the state’s juvenile justice system.
In February, the House passed a bill (H. 4755) giving the governor the authority to nominate all 12 members of the panel that selects state judges subject to Senate confirmation, while banning lawmakers from sitting on the body. The legislation is currently awaiting action in the Senate Judiciary Committee.
On the criminal justice front, the Senate unanimously passed a bill (S. 52) in February that would strengthen the state’s DUI laws, imposing stiffer penalties on intoxicated drivers and pushing suspects to submit to breath and blood testing. In addition, a bill (S. 405) signed by the governor in March extends the state’s homicide-by-child-abuse statute to cover minors up to 18 years of age. Previously, it had only covered children 10 and under.
And finally, the House has passed two major juvenile justice bills: one (H. 4151) that would make it easier to try some 16- and 17-year-olds as adults, and another (H. 5120) that would mandate fingerprinting and photographs of juveniles when they come into state custody and simplify information sharing between schools and law enforcement. Another bill (H. 5117), currently in the House Judiciary Committee with bipartisan support, would create stronger procedural safeguards before most children can be moved into an adult court.
Social issues
With an open governor’s race and all House members on the ballot in November, lawmakers in the lower chamber have passed several items that traditionally poll well with Republican primary voters.
Among those getting the most attention are bills that would reclassify abortion pills as controlled substances similar to Valium and Xanax (H. 4760), rename state roads in honor of President Trump (H. 4982) and slain conservative activist Charlie Kirk (H. 4573, H. 5000), and require schools to force children to use the bathroom indicated on their birth certificate (H. 4756) and post the Ten Commandments (H. 4762).
Charleston Democratic Sen. Ed Sutton was dismissive of what he described as the House’s “election year politics.”
“They’re sending us all sorts of crap right now,” Sutton told Statehouse Report Thursday. “So I’m sure we’ll have to deal with those items somehow during the closing weeks of the session.”
Odds and ends
On Thursday, McMaster vetoed a bill (H. 4902) exempting state colleges from the state’s Freedom of Information Act with regard to the cash they’re paying their student athletes. While the House is expected to muster more than enough of the two-thirds majority required to override the veto, prospects are more uncertain in the Senate.
A House-passed bill (H. 3924) regulating the marketing and sale of THC-infused drinks and edibles is currently under debate on the Senate floor. Votes to ban the products have failed in both chambers, as members have continued to debate where and under what circumstances they should be sold, as well as minimum age limits.
In February, the Senate passed a bill (S. 454) providing stricter regulations for charter schools, including streamlining the closure of failing schools and requiring board members to receive annual training.
And also in February, McMaster signed the S.C. Social Media Regulation Act (H. 3431), which requires social media platforms to give parents control over the apps their children use and how long they use them.
- Have a comment? Send to: feedback@statehousereport.com
Senate committee focuses on tobacco, vapes
By Jack O’Toole, Statehouse bureau | A state Senate Finance subcommittee voted this week to advance an S.C. House bill imposing a 28.5 cent per package tax on so-called “heated tobacco” products, while adding a new 5-cents-per-millimeter tax on vapes.
Not yet sold in S.C., heated tobacco devices deliver nicotine to users without igniting the tobacco leaf. Manufacturers like Philip Morris claim it is less harmful than smoking traditional cigarettes.
The American Heart Association and the American Cancer Society opposed the bill, which set the tax at only half the rate of cigarettes, but senators on the panel argued that it might encourage smokers to switch.
If passed by the full Senate, the bill would go back to the House, where members would have to decide whether to agree to the new vape tax or insist on a conference committee between the two chambers to reach a compromise on the final language.
In other recent news
S.C.-6: Clyburn to run again, defying push for generational change. U.S. Rep. James Clyburn, D-S.C., said on Thursday that he planned to seek an 18th term, breaking with other former congressional leaders and aging lawmakers who have announced retirements and testing his party’s desire for generational change at a crossroads moment.
Income tax cuts, budget bill pass S.C. House. While the state’s $15.4 billion budget and new income tax cuts passed the S.C. House late Tuesday,this story offers a deeper dive into what the measures mean and do.
- S.C. lawmakers extend deadline for state-mandated alcohol server training
- S.C. Senate seeks to regulate hemp beverages, align rules with alcohol
- Bill creating ’25-foot halo’ around police, paramedics advances in Senate
- S.C. tax break for S.C. boat owners could cost counties millions
- S.C. House bill would let local governments punish polluters
- S.C. lawmaker joins families in urging Michigan legislators to pass sextortion education bill
McMaster vetoes bill to keep revenue-sharing contracts with athletes secret. Gov. Henry McMaster’s first 2026 veto was to not sign legislation to shield revenue-sharing contracts between public colleges and student athletes.
S.C. election agency faces more turnover. More leadership turnover at South Carolina’s election agency is certain after interim director Jennifer Wooten decided she didn’t want the job permanently.
Director says measles outbreak slowing. The head of the S.C. Department of Public Health says he’s optimistic that S.C. won’t get more than 1,000 measles cases in its current outbreak, which is now at 993 cases.
IAAM gets historic Harvard slavery photos. Charleston’s International African American Museum is the new steward of what is believed to be the earliest known photos of enslaved Americans, a father and his daughter, from 1850.
Shields?
Award-winning cartoonist Robert Ariail has a special knack for poking a little fun in just the right way. This week, he has a practical question about how posting the Ten Commandments at schools is really supposed to help S.C. students.
- Love this week’s cartoon or hate it? Did he go too far, or not far enough? Send your thoughts to feedback@statehousereport.com.
Instead of lowering income tax, dump sales tax exemptions
Commentary by Andy Brack | The unhealthy obsession among Republicans in the state legislature to cut income taxes is bad tax policy.
From a strategic perspective, it’s unbalanced in the tax structure to diminish the role of income taxes in the revenue stream that the state of South Carolina collects to pay for things like education, roads, health care, green space and government services that civilize our lives.
From an economic perspective, it’s unfair, too. Cutting income taxes for those on the rich end of the income scale means that people who pay a larger share in taxes on sales – poorer and working class South Carolinians – will pick up a larger share of the total tax burden.
For years, South Carolina had a fairly balanced three-legged stool of taxes that generated state revenues through a blend of property, sales and income taxes. There were some fees, but they weren’t a huge chunk of revenue.
But since Republicans took control of the General Assembly in the early 2000s, there’s been a slow burn to cut, cut, cut. First went revenues on personal property taxes in a tax shift that raised sales taxes to cut taxes for property owners (i.e. those with more means). As that third leg of the stool (property taxes) started withering, lawmakers grew a new third leg by raising lots of fees for services, increasing prices on everything from professional licenses to drivers’ licenses.
And now comes the GOP obsession with cutting income taxes. It was designed originally as tax to cost richer people more to balance the regressive burden of sales taxes that hit the poor harder
Twenty years ago, a think tank I ran called the Center for a Better South published a policy book on how legislatures in the South could do better to make taxes fairer.
One of the principles in the book was for legislatures to broaden their sales tax base: “Each Southern state should abolish sales tax holidays and review sales tax exemptions to eliminate those that don’t meet contemporary needs.”
South Carolina lawmakers, however, have taken the path to narrow the income tax base. That might be good for election-year politics, but from a tax structure standpoint, narrowing the base is risky because it assumes (and you know what happens if you do that) that growth will continue. And if it doesn’t? Surpluses go away. And a revenue crisis ensues.
To boost tax fairness, lawmakers shouldn’t fiddle with income taxes, leaving it as a counterbalance to regressive sales taxes. But lawmakers could reduce the burden of sales tax on poorer South Carolina by reducing the sales tax rates. How? By dramatically curbing special-interest sales tax exemptions that lobbyists and interest groups have gotten from the legislature.
Just two years ago, South Carolina lost an estimated $4 billion annually in sales tax revenue because it exempted so many things from the tax. But by getting rid of exemptions and keeping the income tax the same, state lawmakers could actually make a policy decision to lower the sales tax rate, which would help regular people. (The loss in South Carolina from exemptions has tripled in 20 years – in 2007, the exemption revenue loss was $1.34 billion.)
Bottom line: When you read about the GOP slapping itself on the back for cutting income taxes, realize what it really means: they’re celebrating giving their well-to-do buddies another tax break at the expense of the regular taxpayer.
It also means they’re unwilling to do the work to improve tax fairness by reining in billions of special-interest sales tax exemptions like those above that could go a long way to cutting the overall sales tax rate and make the tax code fairer to all – regardless of what they do about income taxes.
Andy Brack is editor and publisher of the Charleston City Paper and Statehouse Report. Have a comment? Send to: feedback@statehousereport.com
Shealy: Democracy deserves better
Commentary by Katrina Shealy | Something has gone wrong in American politics.
The Republican Party I once knew was the party of Abraham Lincoln, who fought to hold a nation together. It was the party of Dwight Eisenhower, who believed in steady leadership and strong alliances. It was the party of Ronald Reagan, who spoke about America as a shining city on a hill. It was the party of the Bush family, who understood that public service meant humility, responsibility, and respect for institutions.
That tradition was built on constitutional principles, personal responsibility and a belief that America leads best when it leads with both strength and character.
Today, that spirit feels dangerously distant.
Instead of statesmen, we see performers. Instead of debate, we see disruption. Instead of principled conservatism, we often see anger used as a governing strategy. Members of Congress once argued fiercely on the floor and still treated each other with basic respect. They understood that democracy requires disagreement, but it also requires dignity.
We have drifted far from that understanding.
When elected officials refuse to sit through a State of the Union or a State of the State simply to make a political point, it diminishes the institution itself. Respect for the office used to matter even when you opposed the person occupying it. Sometimes leadership is not about applause or protest. Sometimes leadership is about restraint.
The Constitution should never be treated as a political tool. It is not something to be reshaped every time it becomes inconvenient. It is the foundation of our democracy, the guardrail that prevents temporary political passions from doing permanent damage.
Another test of a healthy democracy is how a nation treats those who are different. Immigration is a legitimate policy issue and the rule of law must be upheld. But a government that governs by fear rather than fairness undermines the very ideals it claims to defend. The only people who should fear the law are those who break it. Our neighbors should not have to prove their worth simply because they look different from those in power.
Democracy also depends on cooperation. The willingness to work across the aisle once defined responsible leadership in Washington. Compromise was not surrender. It was how a large and diverse nation governed itself without tearing apart.
Today compromise is often treated like betrayal. That mindset does not strengthen democracy. It weakens it.
America should not aspire to be the loudest voice in the room. America should aspire to be the most trusted one. Strength and compassion are not opposites. A nation strong enough to defend its borders should also be strong enough to defend its values. A nation powerful enough to project force should also be wise enough to pursue peace.
Right now many Americans are worried about the future of our democracy. They see rising division, constant negativity, and political leaders who appear more interested in scoring points than solving problems.
But democracy has always depended on citizens who are willing to demand better.
It is time to reject the politics of outrage and rediscover the politics of responsibility. It is time for leaders who understand that governing is not entertainment. It is stewardship.
We need a return to statesmanship. We need a renewed respect for the Constitution. And we need leaders who understand that strength without decency is not leadership at all.
America has faced difficult moments before. Each time, the nation has eventually found its way back to its principles.
The question now is whether we will do it again before more damage is done.
Democracy deserves nothing less.
Katrina Frye Shealy is a former Republican state senator from Lexington County. Have a comment? Send to feedback@charlestoncitypaper.com
Red doors
What’s this classical-looking building with bright red doors? And where is it? Bonus points: Why might it be in the news? Send your best guess – plus hometown and name – to: feedback@statehousereport.com.
Meanwhile, last week’s mystery – “Blue sky” – showed a rear view of a statue of a horse being ridden by Civil War Gen. Wade Hampton III. It’s on the statehouse grounds
Hats off to the few sleuths who figured it out: George Graf of Palmyra, Va.; Steve Willis of Lancaster; Allan Peel of San Antonio, Texas; Jay Altman of Columbia; and James Bessinger of Charleston.
- SHARE: If you have a Mystery Photo to share, please send it to us – and make sure you tell us what it is!
Live long and prosper, possum
To the editor:
State House Possum has been around a while. I saw him months ago outside Gressette. May he live long and prosper.
– Lynn Teague, Columbia, S.C.
Remember Pogo?
To the editor:
It could only be one politically oriented possum. (The writer then added a cartoon of Pogo.)
– Patrick M. O’Neil, mayor, Town of Sullivan’s Island, S.C.
Made my day
To the editor:
I was real happy to get to read your article about my favorite pet — possums. It was a very good article. You made my day.
– James Rollins, Greenwood, S.C.
Send us your thoughts
Please send us your thoughts about politics and policy in South Carolina, but make sure to leave phone numbers and hometowns to help us verify them for publication. We publish non-defamatory comments, but unless you provide your contact information – name and hometown, plus a phone number used only by us for verification – we can’t publish your views.
- Have a comment? Send your letters or comments to: feedback@statehousereport.com. Make sure to provide your contact details (name, hometown and phone number for verification. Letters are limited to 150 words.
Statehouse Report, founded in 2001 as a weekly legislative forecast that informs readers about what is going to happen in South Carolina politics and policy, is provided by email to you at no charge every Friday.
- Editor and publisher: Andy Brack, 843.670.3996
- Statehouse bureau chief: Jack O’Toole
We can use your help
We’re proud to offer Statehouse Report for free. For more than a dozen years, we’ve been the go-to place for insightful independent policy and political news and views in the Palmetto State. And we love it as much as you do.
But now, we can use your help. If you’ve been thinking of contributing to Statehouse Report over the years, now would be a great time to contribute as we deal with the crisis. In advance, thank you.
More
- Mailing address: Send inquiries by mail to: P.O. Box 21942, Charleston, SC 29413
- Subscriptions are free. If you want to subscribe, send us an email: feedback@statehousereport.com with the word “subscribe” in the subject. We hope you’ll keep receiving the great news and information from Statehouse Report, but if you need to unsubscribe, go to the bottom of the weekly email issue and follow the instructions.
- Read our sister publication: Charleston City Paper (every Friday in print; Every day online)
- © 2026, Statehouse Report, a publication of City Paper Publishing, LLC. All rights reserved.
Help keep the City Paper free.
No paywalls.
No subscription cost.
Free delivery at 800 locations.
Help support independent journalism by donating today.