- Associated Press - Friday, January 8, 2021

COLUMBIA, S.C. (AP) - As other states trim expenses and borrow money amid the economic fallout prompted by the coronavirus pandemic, South Carolina Gov. Henry McMaster is already looking to shore up the state’s rainy day fund with $500 million for a future crisis.

McMaster released his spending proposals for next year’s budget Friday, less than a week before legislators will gather for the 2021 session Tuesday.

The governor’s so-called “skinny” budget, at roughly $9 billion, keeps agencies running without any cuts. South Carolina’s relative economic stability was a function of careful budgeting, freezing new spending and keeping state businesses open throughout the pandemic, McMaster’s office says. The state has also avoided dipping into its reserve fund for any pandemic-related purposes, using federal dollars instead. But the pandemic’s effects still whittled down an expected $1.8 billion surplus into the millions.

“We know we’re making great steps, but we cannot see the future clearly,” McMaster said of his suggestion to bolster the rainy day fund.

The governor’s proposals include $123 million in grants for small businesses hit with revenue losses during the pandemic and $30 billion to expand broadband across across the state, two areas that federal pandemic relief monies have already touched in the state.



The governor returned this year to some asks that didn’t get addressed after COVID-19 derailed the 2020 session and South Carolina lawmakers copied and pasted the $9 billion budget from the prior year instead of passing a new budget.

Those repeat asks include $19 million to ensure military retirees and first responders don’t pay state income taxes on their retirement pay or pension, as well as $176 million in deferred maintenance dollars for public colleges and universities.

Other requests from last time got left out, such $100 million for repairs and improvements to the state’s prisons. The governor’s office said the Department of Corrections managed to secure most of those requested funds with payroll reimbursements through federal coronavirus relief money.

Some of McMaster’s other ambitions - such as reducing state income taxes - have also been delayed by the economic crisis. This year’s suggested budget doesn’t include an immediate rate reduction, though it recommends a provision that would put it in place if state revenues bounce back.

McMaster’s proposal would also:

- Allocate $48 million to expand full-day pre-K to low-income 4-year-olds in all school districts across the state, reaching a total of 20,000 children.

- Give $13 million to various law enforcement agencies for discretionary pay raises. The budget doesn’t recommend pay raises for other state employees.

- Provide charter schools with $25 million due to increased enrollment in fall 2020.

- Ensure every school in the state has a police officer, a school nurse and access to a mental health counselor, with $29 million. Schools would also receive $100 million to replace Common Core textbooks and $35 million to help fund classrooms and allow districts to resume step increases for teacher salaries.

- Provide $80 million in extra money for college students who qualify for federal need-based financial aid. The governor’s recommendations also include $60 million for job skills training.

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