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Budget
The Senate Finance Committee passed its version of the $15.4 billion budget bill (H. 5126) this week. The budget increased funding to the Local Government Fund (LGF) by $15,294,812 statewide. This represents full funding to the LGF under the statutory formula. See the estimated LGF county allocations for FY 2026-27. The budget also includes $12 million for the Rural Stabilization Fund, the same amount allocated last year. There is also no increase in employer premiums under the State Health Plan for FY 2026-27.
Items funded in the Senate Finance Committee’s budget include:
- $67 million to cover a 2% base pay increase for state employees;
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$308.7 million for income tax relief (see H. 4216);
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$247.667 million for property tax relief via the homestead exemption increase the Senate passed earlier this year (see S. 768);
- $750,000 in recurring money for PTSD treatment for first responders;
- $3 million in recurring money to Labor, Licensing, and Regulation (LLR) for the V-SAFE Fund;
- Almost $5 million in recurring money for the Firefighter Cancer Benefit Plan;
- $2.5 million in total funding to the Department of Behavioral Health and Developmental Disabilities for the Alternative Transportation Program;
- $443,747 in recurring money to the Councils of Governments for financial support staff;
- $1.2 million in additional recurring funding for aid to public library systems;
- $10 million in one-time money to the Department of Parks, Recreation and Tourism for beach renourishment grants, $275,000 in recurring funding for destination-specific marketing grants, and $10 million in one-time money for the “Play it Forward” request for the sustainable funding of South Carolina State Parks;
- $6 million in one-time money to the Rural Infrastructure Authority for the Rural Infrastructure Fund and $6 million in one-time money for the statewide water and sewer fund;
- $2 million in one-time money to the Department of Natural Resources (DNR) for Conservation Districts;
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$5 million in one-time and $1 million in additional recurring money to the Department of Commerce (SC Commerce) for LocateSC site readiness, as well as $5 million in one-time money for “Rural Development” (see proviso 50.28 below);
- $20 million in one-time money to the Department of Agriculture for the Growing Agribusiness Fund;
- $15 million in one-time money to the State Board for Technical and Comprehensive Education for the “ReadySC” program;
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$1.5 million in recurring funding to the Department of Environmental Services (DES) for AI Modernization of Permit Processing (see proviso 55.26 below);
- $72.8 million in one-time money to the South Carolina Emergency Management Division (SCEMD), within the Adjutant General’s Office, for Federal Emergency Management Agency matches for federally declared disasters, $5 million in one-time money for the SC Public Assistance Program, and $5 million in one-time money to supplement Emergency Management Performance Grants;
- $10 million in one-time money to the Office of Resilience for statewide mitigation projects and $1 million in one-time money for the “Bridge Box Flood Monitoring Program;”
- $22 million total to the Conservation Bank for land conservation;
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Nearly $190 million in one-time money to the South Carolina Department of Transportation (SCDOT) for bridge modernization, $12.5 million in one-time money for the road buyback program (see proviso 84.18 below), and $5 million in one-time money for off-interstate litter pickup;
- $200 million in one-time money to County Transportation Funds for the County Transportation Committee Acceleration Program;
- $30 million to the Division of Aeronautics for airport development programs;
- $10 million in one-time money to the Judicial Department for modernizing the case management system;
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Approximately $12.5 million in total to the State Law Enforcement Division (SLED) for the service contract for an 800 MHz radio system (see proviso 117.200 below);
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$691,000 in recurring money to the Commission on Indigent Defense for public defender technology and digital storage (see proviso 61.14 below);
- $10.5 million in one-time money to the Election Commission for statewide voting system upgrades;
- $3 million in one-time money to the Department of Veterans Affairs for the Military Enhancement Fund; and
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$5 million in one-time money to the South Carolina State Housing Finance and Development Authority (SC Housing) for the “Made it Home!” program relating to affordable housing (see proviso 42.7 below).
Please thank the members of the Senate Finance Committee for keeping their promise to counties and working to return much-needed funding to county governments throughout the state! The Senate Finance Committee budget includes three SCAC policy positions—an annual increase to the LGF, a minimum grant of $200,000 per county in the Aid to County Libraries, and funding for affordable and workforce housing.
The Senate Finance Committee adopted the following provisos referenced above regarding direct appropriations:
27.1. (LIB: Aid to County Libraries Allotment) The amount appropriated in this section for "Aid to County Libraries" will be allotted to each county on a per capita basis according to the official 2020 United States Census, as aid to the county library. No county will receive less than $200,000 (updated from $150,000 in FY 2025-26). Counties will receive their allocations in two equal parts.
42.7. (HFDA: Workforce Housing) Authorizes SC Housing to use any appropriated funds for the “Made it Home!” program to address the lack of affordable homeownership across the state by facilitating the new construction of affordable single-family homes. SC Housing is authorized to spend federal or other funds for the same purpose. SC Housing shall develop program guidelines, reporting requirements, down payment assistance, and homebuyer eligibility requirements and establish criteria for awarding distribution to participating partners. Also, SC Housing may establish a fund separate from the state General Fund that consists of monies received or authorized and any other sources of revenue, public or private, including donations for the purpose of the program. Any of the remaining $5 million appropriated to the First-time Homebuyers Workforce Housing Program in the 2025-26 budget may be carried forward for this purpose.
50.28. (CMRC: Rural Development) Specifies that from funds appropriated to the Department of Commerce for rural development, all allocations must be used for projects in Tier III and Tier IV counties, as well as census tracks that qualify as Opportunity Zones in Tier I and Tier II counties. Maximum awards for these community and rural development projects are $1.5 million and will require a 10% match.
55.26. (DES: AI Pilot Program) Requires DES to develop and implement a framework to identify, pilot, and scale artificial intelligence solutions that improve efficiency, transparency, and service delivery in environmental permitting to support modernization.
84.18. (DOT: Road Buyback Program) Directs SCDOT to identify and compile a list of roads in the state highway system that may be eligible for transfer in accordance with Section 57-5-80. SCDOT will evaluate roads that may no longer serve a statewide purpose and determine whether those roads are more properly maintained by a county, municipality or another appropriate political subdivision. SCDOT will consider functional classification, traffic volume, connectivity, and consistency with the statewide transportation plan when making the determination. Roads deemed eligible for transfer will be those which, in the opinion of SCDOT, no longer serve the purpose of the state highway system. SCDOT may negotiate with the governing bodies of the appropriate political subdivisions for the transfer of maintenance responsibilities for those roads. Road Buyback Program funds must be used to assist with costs related to the transfer of roads from the state highway system, including but not limited to, resurfacing, design improvements, documentation, and transition-related expenses agreed upon by SCDOT and the political subdivision. SCDOT will submit the list of identified roads, along with criteria used for selection and any recommendations regarding the transfer process, to the chairman of the Senate Finance Committee, the chairman of the House Ways and Means Committee, and the governor by Feb. 28, 2027.
117.200. (GP: First Responder Interoperability) Directs SLED to administer and coordinate First Responder Interoperability operations for the statewide Palmetto 800 radio system to enhance public safety radio communications. Funds appropriated by the new proviso will cover radio user fees for eligible state agencies and first responders, with allocations based on a minimum number of radios per participant. Grants will be available for county and municipal systems to improve interoperability but are subject to a required matching of funds to receive support. Any remaining funds may be used to expand the statewide Palmetto 800 system.
The Senate Finance Committee adopted the following new and amended provisos of interest:
31.49. (DPH: Disaster Readiness Fund) Establishes an interest-bearing Disaster Readiness Fund within the Department of Public Health to support emergency response activities, including medical sheltering and medical equipment power shelters. All FY 2026-27 disaster readiness appropriations and any related funds must be deposited into the fund. Unexpended balances may be carried forward, and any reimbursements or cost recoveries must be returned to the fund for future disaster response needs. The House put $1 million in one-time money in their version of the budget; however, the Senate did not allocate money to this fund.
50.EL (CMRC: Open-ended Incentive Agreements) Prohibits SC Commerce from entering into open-ended incentive agreements or contracts during the current fiscal year. Every incentive agreement or contract must specify a maximum expenditure amount which serves as the ceiling on what SC Commerce may spend on any given project.
59.FDS (AG: Firearm Detection Software) Establishes a program at the Attorney General’s Office to provide grants to school districts and local and state government entities to purchase firearm detection software for use on public property.
61.14. (PCC: Public Defender Technology and Digital Storage) Directs the $691,000 appropriated to Public Defenders’ offices for technology and digital storage to be distributed to the judicial circuits in quarterly installments, with $45,000 per circuit and the remaining funds distributed based on population.
84.EDF (DOT: Economic Development Fund / Road Projects) Creates the Transportation Economic Development Fund within SCDOT to assist political subdivisions and state agencies with road projects that facilitate the expansion of development and industry.
84.BRR (DOT: Pilot Broadband Relocation Project) Creates a pilot broadband relocation reimbursement program to reimburse statutorily defined service providers for certain costs spent during relocations made at SCDOT’s request. The proviso also directs SCDOT to establish a process for receipt of applications for these funds by Jan. 31 of the fiscal year and for allocation of available funds among applicants.
108.14 (PEBA: PORS Return to Work) Deletes the earnings cap removal for critical needs law enforcement adopted by the House. Therefore, the proviso currently extends the suspension of the earnings cap to retired members of the South Carolina Retirement Systems and the Police Officers Retirement System who return to work after not having been engaged to perform services for a participating employer in the system in any capacity for at least 12 consecutive months after retirement.
113.SS (TREAS: Salary Supplements) Clarifies that salary supplements referenced in proviso 113.3 are not to be used to supplant salaries. SCAC staff will provide the full language for this proviso once it becomes available.
117.199 (GP: Hospital Emergency Bed Placement) The Senate Finance Committee amended this new proviso added by the House to allow a designated member of the emergency’s leadership team to determine when a hospital may place patient beds in hallways, corridors, or other outlets during emergencies. The House version of this proviso left this decision to an on-site emergency department physician. The Senate amendment also requires that the developed form be electronic and removes the requirement that LLR may issue regulations. There are also two bills (H. 5164 and S. 958) that would make this permanent law.
117.203 (GP: North Augusta Municipal Primaries) Allows use of accrued interest from Savannah River Site funds to pay for election primaries within the jurisdiction of the City of North Augusta with related compliance monitoring by the State Election Commission and the county board as appropriate. The proviso also allows the withholding of the city's portion of local government funds in the event of any violation.
117.SCR (GP: Scout Motors Site Cost Review) Directs the Legislative Audit Council, the Office of the Attorney General and the Office of the Inspector General to jointly review cost overruns at the Scout Motors manufacturing site in Blythewood for which SC Commerce has requested $150 million in additional funding. Nothing in this proviso authorizes the appropriation of the requested funds to SC Commerce or prevents work from continuing on the Scout Motors project site.
117.FMC (GP: Flood Mapping Coordination) Requires SCEMD, DNR and the Office of Resilience to coordinate all flood mapping and flood-related data efforts to avoid duplication and maximize efficiency. Before starting any new mapping or data collection project, the agencies must consult with each other and consolidate efforts where possible. The agencies also must establish a joint data-sharing protocol ensuring all flood-related data is accessible across agencies for long-term planning and emergency response. The proviso also establishes a reporting requirement.
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