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by WILL FOLKS
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Not long after reaching what appeared to be a tentative agreement on a spending plan for fiscal year that began two weeks ago, South Carolina “Republican” lawmakers were unable to come to terms on a final compromise.
That means negotiators for the S.C. House and the State Senate – two chambers controlled by GOP supermajorities – are headed back to the drawing board.
As we reported yesterday, budget negotiators had supposedly reached general agreement on cutting every penny of pork barrel earmarks contained in the proposed $42.6 billion spending plan – which would have freed up as much as $500 million for tax relief.
Both House and Senate earmarks would have been cut under this proposed compromise…
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In addition to dispensing with this superfluous spending, we were told negotiators had also tentatively agreed not to appropriate an estimated $150 million hidden in the budget as part of the latest corporate welfare handout for crony capitalist Scout Motors.
Senate budget writers told us they were “hopeful” this deal would go through – while two conferees indicated an agreement in principle between the two chambers had been reached.
The tentative agreement went down like a Led Zeppelin on Tuesday, however, with negotiators failing to come to terms on the elimination of any earmarks – bringing the entire debate back to square one.
Senate finance chairman Harvey Peeler, banking chairman Tom Davis and minority leader Brad Hutto are representing the upper chamber in these ongoing deliberations. Representing the lower chamber are ways and means chairman Bruce Bannister, outgoing majority leader Davey Hiott and state representative Jackie Hayes.
These six lawmakers agreed to meet again publicly on Wednesday (July 15, 2026) at 2:00 p.m. EDT to try and hammer out their differences – although closed-door meetings are expected to continue between now and then.
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Following the implosion of the compromise, Davis made it clear Senate leaders were not going to budge on the issue of the House’s earmarks – arguing the $320 million in new pork barrel spending the House included in its most recent spending plan “ought to go back to taxpayers.”
Davis specifically cited the continuing resolution (or “CR”) approved by lawmakers two months ago – which funds government at its current levels until a deal is reached. If lawmakers don’t find a compromise, the CR remains in place – potentially generating billions of dollars in revenue that could be used for tax cuts in the coming fiscal year.
“I’d rather have a CR than a bad budget,” Davis said. “I don’t want CRs being characterized to the public as a disaster.
I don’t want to telegraph to the people of South Carolina that a CR is a disaster because I believe there are much worse alternatives.”
That’s accurate. Last month, I encouraged South Carolina senators to stand firm on this issue and reject the fiscally liberal budget foisted upon them by the House.
“The longer senators reject the version of the budget that passed the increasingly left-leaning S.C. House of Representatives, the more likely South Carolinians are to have a shot at transformative tax relief in 2027,” I noted.
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Davis echoed that refrain in his remarks to reporters following Tuesday’s meeting, arguing that the continuing resolution “sets us up next year for some comprehensive reform across the board.”
“I want to pass a budget,” Davis added. “I’d like to see state employees get their pay increases. But again, a CR is better than a bad budget – and it would leave all that money unappropriated. That would set the General Assembly up next year for some truly historic tax relief.”
Davis’ statements were a 180° departure from those made by Bannister.
“A (continuing resolution) is an absolute failure of this conference committee to do their jobs,” Bannister said.
Bannister also poured cold water on the Senate’s proposed property tax relief plan – one of Peeler’s top legislative priorities – referring to it as a “tax swap” supported by only “anecdotal” evidence.
Which side will win out?
“The Senate is probably in a stronger position right now,” a lobbyist tracking the debate told FITSNews.
“It’s going to be really tough for the House conferees to come back with no cuts to their earmarks,” the lobbyist added. “Senator Davis did a great job of adding pressure. His comments are going to put a lot of heat on the House and their earmarks.”
The real winner in this ongoing stalemate? Attorney general Alan Wilson, who recently captured the Republican nomination for governor on a platform of comprehensive tax cuts and affordability. The longer lawmakers are unable to come to an agreement, the more money Wilson can argue ought to be routed to tax relief.
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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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