South Carolina Budget Battle: Hold the Line

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by WILL FOLKS

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A little over a month ago, an uncomplicated piece of common sense legislation took effect in South Carolina which could have profoundly positive impacts for the future of the Palmetto State’s economy… assuming it isn’t usurped by something else in the coming days, weeks or months.

I’m referring to S. 769, a resolution which unanimously and unceremoniously passed the S.C. Senate in late January, cleared the S.C. House of Representatives in early May and was signed by the governor six weeks ago (on May 15, 2026). This bare bones resolution simply states that if members of the S.C. General Assembly fail to pass a budget for the coming fiscal year – which begins on Wednesday (July 1, 2026) – “then the authority to pay the recurring expenses of state government continues at the level of amounts appropriated in (the current year’s budget).”

This means state spending would be locked in at its present levels if lawmakers are unable to agree to a budget over the next 72 hours – which seems likely based on the current contentiousness between the two “Republican-controlled” chambers.

While some in the left-of-center media believe this ongoing fiscal discord is driven by “dysfunction” – or is indicative of some sort of failure on the part of the system – the reality is much different. In this case, “failure” could be extremely fortuitous for citizens and taxpayers.

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The “continuing resolution” (or “CR”) approved last month could wind up being the best thing that ever happened to South Carolina – assuming state senators hold the line and reject reckless budget amendments approved last month by the increasingly liberal, wildly profligate S.C. House.

Here’s the deal: South Carolina’s current budget clocked in at $39.16 billion – including $13.426 billion in fees and fines from Palmetto State citizens, $13.246 billion in state taxes and $12.487 billion from Washington D.C. that’s routed through our antiquated maze of ineffectual bureaucracies.

There’s actually even more money sent down from D.C., but lawmakers stopped including all of this glorified pass-through funding in their accounting of the budget years ago.

While that $39.16 billion sum is massive – it’s less than the $42.547 billion budget the House is currently attempting to foist on taxpayers. A whopping $3.38 billion less, to be precise.

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The massive gap between the current and proposed spending plan isn’t the only funding lawmakers could potentially repurpose from bureaucratic bloat into private sector empowerment in the coming months. There’s even more projected revenue flowing into state coffers beyond that sum, which means we are looking at a once-in-a-lifetime opportunity to address increasingly pernicious affordability issues plaguing broad swaths of our state’s populace – issues which have dominated campaign rhetoric across the state for months.

Will lawmakers take action, though? Or in this case, as irony would have it, will they have the courage not to take action? And let the clock expire on the proposed budget?

The math is mind-bogglingly massive: if lawmakers simply refuse to pass a budget over the next three days – South Carolina could have potentially $4 billion (or more) available for income tax relief come January 2027. That could equate to more than $2,000 in immediate, one-time relief (on average) per Palmetto State taxpayer – while setting the stage for longer-term, permanent rate reductions.

Such a massive influx of money into the economy would dwarf the $112 in average, one-time relief the House provided to just 42.8% of taxpayers earlier this year (while leaving 34.6% of taxpayers with nothing and actually raising taxes on 22.6% of filers).

It would be truly historic, and definitionally transformational to our economy… not to mention a lifeline to hundreds of thousands of citizens currently being crushed by rising prices across the board.

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In his recent interview with this author, newly minted GOP gubernatorial nominee Alan Wilson – who highlighted affordability concerns more than any other candidate – correctly identified corralling state spending as a necessary first step in achieving his campaign pledge of eliminating the state income tax.

We can’t think of a better place to start corralling than right here… right now.

Can lawmakers – particularly the state senators who are currently standing in the gap – hold the line and block the new budget from being adopted? Or is all of this just brinksmanship – likely to yield another missed opportunity in which billions of dollars that could have been routed into our wallets, pocketbooks, bank accounts and businesses instead gets pumped back into our results-challenged, unaccountable government behemoth?

According to a well-placed source in the S.C. General Assembly, all three Senate conferees – finance chairman Harvey Peeler, banking chairman Tom Davis and minority leader Brad Hutto – are “more than willing to accept a continuing resolution if the House doesn’t MATERIALLY cut their earmarked and rolled-up projects and put recurring money on the line to fund a property tax like the Senate did.”

That’s a reference to $340 million in pure pork barrel spending approved by the House – and the lower chamber’s refusal to adopt a $240 million recurring property tax cut, which is a top priority of Peeler’s.

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“What the House has done in this budget (by prioritizing earmarks and completely ignoring a property tax cut) is disgusting,” the source added.

Other sources close to the process acknowledged negotiations were very much “up in the air,” but confirmed the “Senate is getting tired of how the House conducts business.”

And yes, that fatigue reportedly includes mounting frustration over a secretive bailout for crony capitalist Scout Motors that House leaders tucked into their version of the state budget – a $117.1 million to $153.9 million corporate welfare handout depending on which estimate you accept.

Are Senate leaders finally tired enough to put a stop to the spending madness and start standing on business (i.e. standing for South Carolina businesses)?

We’ll know soon enough…

If they do, though, South Carolina taxpayers could finally see the real tax relief they’ve been waiting years for so-called “Republican” supermajorities to deliver.

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ABOUT THE AUTHOR…

Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.

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