Governor Henry McMaster has unveiled a Fiscal Year 2026-2027 Executive Budget that prioritizes infrastructure, tax relief, and education. The proposal leverages a state surplus to address the challenges of South Carolina’s rapid population growth and the rising costs of inflation.
Addressing Infrastructure and “Weathering” Inflation
The centerpiece of the budget is an allocation of over $1.1 billion in new surplus funding dedicated to state roadways. According to the Governor’s press release from January 12th, this investment is a defensive move against economic pressures: “Inflationary construction and labor cost increases now threaten to create crippling delays and busted budgets for major road construction projects currently underway and those soon to break ground,” McMaster stated.
Beyond physical roads, the Governor is calling for a comprehensive study to measure the impact of 10- and 20-year population projections on essential services, including water, power, and healthcare.
Tax Cuts and Record Savings
McMaster’s plan continues the multi-year effort to reduce the state’s personal income tax, recommending a drop from 6% to 5.9%. Simultaneously, he proposes bolstering the state’s “Rainy Day” fund to $1.4 billion, representing 10% of total General Fund revenues. In his January 12th letter to the General Assembly, he noted, “Saving money instead of spending it has served our state well – and ensures that we will always be prepared for future economic uncertainties.”
A Historic Milestone for Education
The budget marks a significant achievement in education by recommending $150 million to raise the minimum starting teacher salary to $50,500. This fulfills a long-term goal set by the Governor in 2017.
Other major education and youth initiatives include:
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Universal Free Breakfast: $8.7 million to provide daily breakfast to every public school student regardless of income.
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4K Expansion: $9.9 million to expand full-day four-year-old kindergarten eligibility to families at or below 300% of the federal poverty guidelines.
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Higher Education: A seventh consecutive year of in-state tuition freezes and $80 million for need-based grants.
Public Safety and Healthcare
The Governor remains committed to public safety, maintaining funding for a School Resource Officer in every school and proposing an additional $10.7 million for law enforcement pay raises. He also renewed his call for a $2,000 income tax credit for active-duty first responders.
In healthcare, the budget recommends $115 million for a new National Cancer Institute-designated Comprehensive Cancer Hospital at MUSC and nearly $100 million to support the newly restructured Department of Behavioral Health and Developmental Disabilities.
In his concluding remarks from the January 12th release, McMaster expressed confidence in the state’s trajectory: “By thinking big, by being bold, and by making these transformative investments, I believe we will set our state on a course that will provide the opportunity for prosperity, success, and happiness for generations of South Carolinians.”
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